In many ways, the creation of a regulated iGaming market remains something of a Holy Grail for casino brands, as it’s estimated that the Big Apple will generate more than $1 billion in tax revenues.
Of course, NY has already dipped its toes in the world of remote wagering, having legalized sports betting back in January 2022. In the first month of legal sports wagering alone, New York saw an incredible $1.67 billion staked in bets, with this setting a record for any US state (even beating New Jersey).
With these things in mind, it would appear to be a matter of time before New York becomes the sixth US state to legalize online casino gameplay. However, this has proven challenging so far, so will we see the state join the iGaming revolution in the near term?
New York and Online Casinos – A Brief History
Let’s start by recognizing the broad differences between remote betting and iGaming, especially from a legislative perspective. After all, some 36 US states have now legalized online or mobile sports betting to one degree or another, while just six have looked to regulate and tax the iGaming vertical.
What’s more, New York has flirted with legalizing online gambling for more than five years now, while it has simultaneously watched several states create incredibly complex and generative regulatory frameworks.
However, while the state finally forced through sports betting legislation and launched this vertical in January 2022, online casino gameplay seems to pose a much greater challenge.
Of course, NY has also seen several bills and attempts to legalize casino gameplay previously fail, so while there remains a strong will to achieve this objective in some quarters, stringent opposition remains in others.
The Economic Case for Legalizing iGaming
While sportsbooks have delivered significant tax revenues already to the NY state authorities, these returns would be dwarfed by a legalized iGaming space. This economic argument is arguably the most compelling, with the legislative counsel head Light & Wonder revealing some startling statistics that highlight the immense potential of online casino gambling.
More specifically, online casinos in six US states generate some $500 million on average, which is the same amount as sports betting handles in 36 states. During the same reporting period, commercial casino slot revenue in the US averaged a staggering $1 billion per month.
Online casinos are undoubtedly the most generative online gambling vertical, with the last six months’ figures revealing that Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia (the six states that have legalized the iGaming vertical) generated $5.7 billion in cumulative revenue.
This generated a staggering $1.5 billion in state taxes, while these numbers are only likely to increase incrementally over time.
Given the populous nature of New York, the demand for sports betting, and the popularity of franchises such as the New York Giants, it’s little wonder that New York would dwarf some of these figures. Tax revenue would certainly exceed $1 billion a year in the Big Apple, and this is an incredible amount for a state that has huge infrastructure needs.
Will New York Take the iGaming Plunge?
This economic argument is not only compelling from a theoretical perspective, but it also reflects the financial issues facing New York and similar states in the US.
Fiscal reality has certainly caught up with the Big Apple of late, with recent spending cuts coming after it was revealed that New York had a $7 billion budget deficit to fulfill in the year 2024.
This trend is reflected across the whole of the US, as even states that have previously been cash-positive are starting to enter the red and endure seismic (and fast-growing) budget deficits.
This state of affairs may worsen in 2025, with several jurisdictions turning towards iGaming (and remote betting) as a way of boosting their coffers and easily generating huge and reliable tax revenues each month.
Currently, NY legislations are also watching as a raft of other states move forward with their attempts to legalize casino gameplay. They’re also observing significant technological and industry trends that change the nature of iGaming. We’ve seen operators using methods such as a no deposit sweepstakes casino. It means they have a generous approach, but is also quite a new introduction to the space and is slightly harder to categorize.
This also adds a thrilling dimension to the iGaming marketplace and one that will potentially boost earnings and revenues across the board.
Several NY senators have certainly looked to leverage FOMO when pushing through legislation, with one suggesting that the state was losing approximately $4 billion for every year that it didn’t legalize online casino gameplay.
It has also been noted that if New York performed on par with the average across the six other iGaming states, it would earn $425 million in tax revenue during the first year. This is a conservative estimate too, while it’s hard to imagine such stark financial data and circumstances being ignored for much longer!