Sun Sets On New York Post-Budget Legislative Session. What’s Next For Gaming?

Written By Mike Mazzeo on June 3, 2022

New York’s post-budget legislative session came to an end on Thursday.

Months of bill proposals, committee meetings and deliberations now make way for some lawmaking downtime.

How have things shaken out in terms of legal gambling in New York? And what’s on the horizon for next year? PlayNY takes a look.

Downstate casino licenses in New York

The acceleration of three downstate NY casino licenses was included in the final state budget. The frontrunners are existing VLTs Resorts World NYC and MGM Empire City, mostly due to existing infrastructure and speed to market. Initial licensing fees will be at least $500 million each.

The New York State Gaming Commission has until Oct. 6 to select a gaming facility location board. The board will then issue a request for applications within 90 days of a majority of members being appointed. 

Real estate and casino powerbrokers will be jockeying for position. Manhattan is the glitziest location, but it may not be possible due to local political and community opposition. Meanwhile, Steve Cohen’s Citi Field casino — with Hard Rock as a potential partner — faces a tough road due to issues over the use of parkland. 

This will be a major storyline for the state in the upcoming weeks and months. 

Read More: Challenges Aplenty: Where Could Third Downstate New York Casino License Go?

Will New York online casino gaming get legalized?

The bill to include online casino gaming in New York — which is intended to include table games such as roulette, blackjack and online poker — didn’t gain any traction this past legislative session. But Sen. Joe Addabbo wasn’t surprised; he just wanted to get the conversation started. 

New York is projected to receive an estimated $475 million annually in tax revenue if it green-lights legal NY online casino gaming. But any further expansion of gaming in the state will face at least some opposition. 

New York passing online casino gaming — intended to be the featured item for next year’s budget — would be huge for the industry as a whole since NY has set new standards across the board. 

NY sports betting operator expansion, tax reduction 

Gov. Kathy Hochul just praised the Empire State for breaking the all-time tax revenue record from sports betting in any state in just over five months — $267 million total, with $263 million of that coming from online sports betting.

So yes, the launch of NY online sports betting has been a massive financial boon to the state — with 98% of all tax revenues going to educational funding. 

As a result, the state has no reason to change its controversial 51% tax rate. Sportsbooks, after all, had to know what they were getting into. And none of them said no to the market access. 

Still, sportsbook executives have made no secret of their overall disdain for the 51% tax rate. 

Assemb. Gary Pretlow had introduced legislation that would lower the 51% tax rate by bringing in additional operators. The bill called for the Empire State to go from nine NY sportsbooks to no fewer than 14 by Jan. 31, 2023 (which would lower the tax rate from 51% to 35%) and no fewer than 16 by Jan. 31, 2024 (which would lower the tax rate from 35% to 25%).

But the bill, which could’ve paved the way for the likes of Fanatics and Bet365 to get another chance at joining the Big Apple market, was rejected during budget negotiations. 

This storyline isn’t going away anytime soon. A deep-dive, roundtable-type discussion among multiple NY agencies could occur later in the fall. 

Expanding NY sports betting menu 

New York bettors have been frustrated that they can’t bet on individual player future awards like MVP, Cy Young and Heisman. They also can’t bet on in-state college teams and events like the NFL Draft. 

The intent of the legal betting market is to keep players away from unregulated offshore sportsbooks and independent bookies (which allow them to play on credit). 

Neighboring New Jersey and Pennsylvania also offer more markets, which could sway NY bettors to take their business over state lines. 

Addabbo and Pretlow have both said they are open to conversations about changes. 

Election year looms for major players for NY legal gambling

Gov. Hochul has been an advocate of gaming in the state; she will run for a full term. 

Similarly, Addabbo — who chairs the Senate’s Racing, Gaming and Wagering Committee — and counterpart Pretlow need to win reelection. 

Addabbo and Pretlow have advocated for online sports betting and the downstate casino acceleration.

Their potential replacements, of course, could also be pro-gaming, but that’s TBD — if it ends up mattering at all. It will be up to the voters whether they all continue. 

Among the items that will need to be hammered out is the Seneca Gaming Compact, which expires in December 2023. And after Seneca Nation president Matthew Pagels blasted Hochul and the state, fences will need to be mended. 

Remember, Hochul was able to obtain $564 million in outstanding casino revenue payments but controversially put the majority of it toward the new Buffalo Bills’ stadium. 

DFS in New York, other gaming issues 

Addabbo may have to separate a bill to add self-service kiosks to racetracks, stadiums and arenas from its other portion, which is intended to increase online sports betting options on the apps to include fixed-odds horse racing and NASCAR. 

Addabbo had also introduced legislation to increase the number of daily fantasy sports operators, so perhaps that’s something that can be revisited. 

DFS was ruled a game of skill rather than a game of chance by the New York Court of Appeals. 

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Mike Mazzeo

Mike Mazzeo is a contributing writer for PlayNY, reporting on legal sports betting in New York while covering the potential legalization of NY online casinos and poker. He previously wrote for ESPN, the New York Daily News and The Ringer, among others.

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