For five years, New York has watched neighboring states launch and benefit from the popularity and big business of online casino gaming. It’s one of the biggest reasons lawmakers have pushed for the legalization of online casinos in NY.
At the Global Gaming Expo in Las Vegas last week, Howard Glaser reiterated those points but framed it in a different way.
In July 2023, the head of government affairs and legislative counsel for Light & Wonder said, online casinos in six states generated $500 million – the same as sports betting in 36 states. That same month, every commercial casino in the US reported $1 billion in slot revenue.
“It’s taken 30 years for casinos to build that business and, really, 10 seconds on the evolutionary scale of gaming to have iGaming GGR of half of that,” Glaser said.
“That gives you a sense of what the power is in terms of the performance of iGaming.”
Online casinos ‘most productive revenue generator’
Over the past six months, Glaser detailed, legal online casinos in six states (Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, West Virginia) totaled $5.7 billion in revenue, leading to $1.5 billion in state taxes.
“IGaming,” he said, “has been the most productive revenue generator of any gaming launch in history.”
Howard and two other panelists agreed that online casino legalization in other states is inevitable. Similar to how regulated sports betting spread across the country.
And New York, where tax revenue could exceed $1 billion relatively quickly, should be part of the next wave, notably as we continue to climb out of the pandemic depths.
“If you want to know which states are going to be next, tell me which states are going to run out of revenue in terms of their annual budgets,” Glaser said. “A big piece of what has been a drag on iGaming adoption is the $293 billion that the federal government made in direct payments to states because of COVID. That money made states flush, but that money is starting to run out this coming fiscal year.
“States that have been cash positive are starting to go cash negative and it gets worse in 2025. Legislators are uncomfortable when they suddenly need to fund a budget hole and then they’ll pull iGaming off the shelf.”
Sports betting big, but NY online casinos would be bigger
A leading advocate for online gambling expansion in New York, Sen. Joe Addabbo knows full well what the Empire State could accomplish with legal online casinos.
During a Senate committee meeting in early 2023, the senator highlighted what was financially at stake: “Every year we don’t do iGaming in New York, (the state) is losing roughly $4 billion.”
At the same meeting, Glaser pointed out that if New York performed on average with the six other states featuring online casinos, it would earn $425 million in tax revenue within the first year. By the fifth year, that total could reach $720 million.
With online sports betting in NY generating $1.3 billion in state tax revenue over the first 20 months, Addabbo, who again plans to introduce legislation to legalize online casinos in NY, is eager for the Empire State to capitalize.
“We should continue to build upon these solid revenue generating opportunities in order to make many additional improvements to our state’s gaming ventures and addiction services. I look forward to greater results with the future eventual arrival of iGaming and iLottery in New York.”
Anika Howard, president and CEO for Wondr Nation who also appeared on the G2E panel, noted that having the ability to gamble online “is an expectation” from players. Because of all the things individuals can do on their phones now, she said, that many don’t understand why online casinos aren’t legal.
“What they see,” Howard added, “is that they can buy coffee from Starbucks on their cell phone and check all their really important financial transactions, from investments to banking, online. So why not iGaming?”
Responsible gambling safeguards remains key
Lawmakers are cautious. After all, Howard said, legalizing online casinos needs to be done responsibly and with player protections. As Addabbo has pointed out to PlayNY before, addressing the risk of problem gaming and gambling addiction remains the biggest challenge facing the legalization of NY online casinos.
“What state wouldn’t want more revenue and more educational funding — especially when they see some of that iGaming money leaving New York is either going to another state or doing it illegally?” Addabbo said in summer 2022.
“So you want to secure that, regulate it and make it safer. … I think it’s trickier, and therefore we’ll look to do more funds and more in-tune with OASAS (Office of Addiction Services and Supports) on how we address addiction even further.”
Justin Cosnett, chief product officer for Continent 8 Technologies who appeared on the G2E panel, emphasized the need for regulators to implement safeguards to protect players.
“If you want player protection, you need regulations or you’ll have even more potential for harm, potential for risk,” he said. “Because you’re basically establishing an even better open market, so that responsible gaming goes hand in hand with regulation that you set up. And then it’s how that jurisdiction wants to police its operators and make sure that they do and don’t operate in certain ways tied to that kind of prevention.”