Online Gaming Legislation Faces Uncertainty in New York
In a move that has raised eyebrows across the state's gaming industry, Senator Joseph Addabbo Jr.'s iGaming bill was conspicuously absent from Governor Kathy Hochul's 2025 budget proposal. This omission signals potential challenges ahead for the legislation, which seeks to introduce a 30.5% tax rate on revenues generated from online casino operations.
The absence of the bill from the governor's budget has sparked speculation about its viability during the 2024 legislative session. With Governor Hochul seemingly disinclined to support the measure, proponents of legal online gambling face an uphill battle. The stakes are high, as the inclusion of online sports betting in the 2022 budget, taxed at an impressive 51%, demonstrated the lucrative potential of regulated online gambling markets.
Economic Implications
Advocates for the legalization of iGaming argue that it could serve as a financial boon for New York by addressing current budget shortfalls. Without the legalization of online gaming, they contend, New York stands to lose substantial revenue streams to neighboring states where such activities are legal, or worse, to illegal gambling operations that offer no consumer protections or tax benefits.
The potential economic impact of the iGaming bill is significant. It promises to bolster state coffers with much-needed funds that could be channeled into public services, including education. As stated by Sen. Addabbo and Rep. Pretlow, "At a time of fiscal distress for our state, we cannot continue to allow hundreds of millions of dollars to be funneled into neighboring states or into the pockets of disreputable companies—particularly when those funds could be used to further bolster funding for public schools or other worthy services."
Lobbyist Influence and Industry Dynamics
Concerns have been raised regarding the role of lobbyists in shaping the bill's language to potentially favor certain companies. Steve Brubaker, an industry lobbyist, expressed skepticism over the bill's passage and hinted at last year's legal language being altered to benefit specific players, stating, "Seems like a very light touch for Evolution. Has me thinking that last year’s L&W language was replaced with more favorable language by Evo or by the casino companies who use them."
Brubaker's comments shed light on a common practice within legislative processes, where lobbyists work to secure advantages for their clients. "You see bills ‘legislating market share’ all the time. It is the primary reason lobbyists exist," he remarked, highlighting the often unseen influence these individuals have on the laws that govern industries.
Moreover, if the iGaming bill were to pass, companies interested in entering the market might be required to divest certain interests before applying for a license. This provision aims to ensure a level playing field and prevent conflicts of interest within the burgeoning industry.
The Battle for Control
The ongoing debate surrounding the iGaming bill also touches on the control of live dealer games—a hotly contested segment of the online gaming market. Brubaker noted the contentious nature of this aspect, saying, "While I do not see this bill passing, it will be interesting to see amendments that may be added to change the direction or focus of what is a battle for control of live dealer."
The outcome of this legislative effort holds considerable implications for New York's economy and the future of its gaming industry. As it stands, the path forward for online gambling in the Empire State remains shrouded in uncertainty. Stakeholders from various sectors are keenly observing developments, aware that the decisions made now will shape the landscape of gaming in New York for years to come.
As the conversation continues, both inside and outside legislative chambers, the question of how New York will navigate the complex issue of online gambling looms large. Will the state embrace the potential financial windfall that iGaming could bring, or will it forego the opportunity, leaving money on the table and allowing other states to capitalize on the growing trend? Only time will tell, but one thing is certain: the debate over the iGaming bill is far from over, and its repercussions will be felt throughout the state's economy and beyond.