Thursday came with some dour news regarding the immediate future of legal online casinos in New York. A day earlier, however, a panel of industry insiders agreed that it would not be long before the Empire State comes around and, indeed, offers iGaming.
Both New York and Maryland, two states that were considered next to legalize online casinos in 2024, were mentioned by panelists at the NEXT Summit New York conference in Manhattan on Wednesday.
Eventually, as it did with online sports betting, other states will legalize online casinos as they realize the potential tax revenue and funding for problem gambling treatment, among other reasons. And the next wave of legalization, these experts agreed, will include the passage of online casinos in New York.
“If you tell them we’re funding things by passing iGaming, or we can raise your taxes,” Shawn Fluharty, a West Virginia state delegate, said, “what do you think the answer is gong to be?”
‘They think we’re talking about video games’
For the past few years, Sen. Joseph Addabbo and Asm. Gary Pretlow have been at the forefront of potential legalization of online casinos in New York, as they were with the authorization of state-regulated NY sports betting.
Since launching in January 2022, online sports betting in New York has generated over $1.6 billion in state tax revenue for public education. It is believed that online casinos would create another $1 billion, minimum, in annual tax revenue. In addition, as Fluhart noted as an example, that money could also go toward funding college scholarships.
In nearby New Jersey, where iGaming has been operational since 2013, the state has realized over $1.1 billion in taxes, no doubt helped by New Yorkers making the quick trip across state lines.
Fluharty, whose home state of West Virginia boasts legal online casinos, as well as Brandt Iden, vice president of government affairs for Fanatics Betting and Gaming, agreed that the delay in legalization stems from lawmakers being unfamiliar with the online gambling industry. Currently, seven states have legalized online casinos, compared with 38 jurisdictions with sports betting.
“We talk about iGaming,” Iden said, “and they think we’re talking about video games.”
Adding a bit of snark, Fluharty added that some of his colleagues “struggle to silence their phones. And we’re going to tell them gambling can be done on their phones?”
‘Some of the dream is not quite fulfilled’
Of course, the main argument of late has surrounded the fear of online casinos cannibalizing brick-and-mortar facilities. That reason no doubt played a major role in Addabbo announcing at the NEXT Summit that the New York Senate would not include online casinos in its budget.
Many industry executives, proponents and experts have attempted to refute that argument, including Fluharty. The West Virginia delegate noted during the panel that Pennsylvania, which launched online casino gaming in 2019, saw four new land-based casinos open after iGaming went live. New York, of course, is in the midst of its own retail expansion as three new downstate licenses are up for grabs, potentially awarded by early 2025.
For what it’s worth, Maryland officials commissioned a study that showed online casinos would generate $900 million in revenue but that it would cost brick-and-mortars $200 million. Of course, these findings are not quite apples-to-apples, but it is worth bringing up in this conversation.
But it’s not really just about addressing cannibalization concerns. As the panel emphasized, any state considering legalization should take into account what it could achieve with the additional tax revenue. That includes problem gambling treatment, resources to promote responsible gambling and, as is the case in New York, funding public education.
“Some of the dream is not quite fulfilled,” said Rob Heller, CEO of Spectrum Gaming Capital, “which creates some opportunity.”
