Who knows?
To be or not to be? That is the opening of Hamlet’s famous soliloquy in William Shakespeare’s play of the same name, but it might be something Senator Joseph Addabbo must be asking himself about online casino gambling in the state. On January 7th, as chair of the Senate Racing, Gaming, and Wagering Committee, the Senator reintroduced Senate Bill 2614, which would authorize and regulate online casinos and online lottery sales.
In addition, Assembly Bill A05922 has been introduced by Carrie Woerner in the Assembly, ensuring parallel consideration in both chambers. Woerner introduced Assembly Bill A06030, which relates to online poker and could serve as a fallback for limited online gaming should the broader iGaming legislation fail.
Perceptions versus reality
Residents of upstate New York in the Finger Lakes region know that there is so much more to New York than the city of the same name. However, for many outsiders, New York is New York City, and tourists flock to that beacon of entertainment to soak up the unique culture, theatre shows, gigs, art, and general “New Yorkness”. The city has an unrivaled concentration of iconic landmarks and diverse energy from Broadway to MoMA to the Empire State Building and the Brooklyn Bridge. In the place where anything goes, it can come as a shock to discover that iGaming is off the agenda.
The hit musical Guys and Dolls is famously set in the city during the 1950’s and focuses on the hustle and bustle of Manhattan’s gambling scene. The movie features scenes in Times Square and the sewers of New York and is deeply rooted in the underworld of the city. While land-based casinos are now legal throughout the state, iGaming still operates in the shadows.
All change?
However, all of that is hopefully about to change. Well, that is what Senator Addabbo and the gambling fans will be hoping for. It is not the first time that he has attempted to get online casino in US legalized in the state, but this time he is hoping Lady Luck will be on his side. The pro-gambling lobby argues that New York is missing out not just on fun and entertainment but also on substantial revenue. Neighboring New Jersey’s gambling boom is being fueled by online casino gambling, with double-digit growth in the sector last year. In fact, for the first time, iGaming revenues exceeded those of land-based casinos. With a 19.5% tax rate, New Jersey’s coffers are heaving under the weight of iGaming revenue.
What are the concerns
While the anti-online casino lobby has cited concerns about consumer protection and expanded gambling access, the biggest concern has almost certainly been financial. Some lawmakers object on economic grounds, concerned that online casinos could cannibalize revenue from the land-based venues. They cite concerns about potential job losses in the bricks-and-mortar sector and about volatility in tax revenue.
Protecting jobs
Senator Addabbo has included dedicated funding streams in his bill to protect land-based casino jobs. The latest incarnation (supported by Asm Pretlow) includes a $25 million annual “Responsible Gaming and Workforce Fund,” created to neutralize opposition from the Hotel and Gaming Trades Council. The fund would offer retraining to casino workers, support job transitions, fund upskilling for digital gaming roles, and offset employment impact on physical casinos.
Partnerships
In addition, the bill limits the number of iGaming licenses and restricts licenses to existing casinos rather than open-market licensing. This will ensure there are no new digital-only competitors that can undercut the physical casinos. Instead, land-based casinos will partner with an online platform. This is similar to the model employed in New Jersey, Pennsylvania, and Michigan, where cannibalization is not a problem.
There has been considerable thought given to revenue-sharing and tax rates to support the physical casinos, ensuring income flows back to the state and host communities. Those in favor of the legislation are keen to point out that New Yorkers already play at online casinos, but for now, all the revenue flows offshore, with no benefit to the state.
They claim that iGaming will complement, not replace, physical casinos, with the bill mandating branding alignment so that the online casino must use the land-based casino’s brand. In addition, it encourages cross-promotion with loyalty programs and rewards to drive physical footfall and vice versa. The aim is for a symbiotic ecosystem rather than a competitive one.
The lawmakers have also added workforce protections and promised that there would be no layoffs. In fact, they have been keen to point out that new jobs should be created in new tech, compliance, and customer service. Evidence from other states shows that iGaming grows the overall market rather than taking market share from other verticals.
Will it be enough?
Will these changes be sufficient? It is hard to tell because there remain concerns around problem gambling and 24/7 access. Even with responsible gaming funds, a mandatory tool, and cross-state (and country) evidence, some legislators remain very wary. The objection is ideological, which means finding a technical solution is difficult. While all the evidence from other jurisdictions points to a regulated market reducing gambling harms, some lawmakers are not listening to it. In addition, some lawmakers conflate regulated iGaming with offshore and sweepstakes casinos, which further muddies the waters.
Hard to predict
Another factor that will come into play is the rise of prediction market platforms. While prediction markets appear to be gambling, they are, in fact, regulated as financial derivatives at the federal level. As many state regulators are discovering, it is hard to stop the likes of Kalshi from setting up shop in their jurisdiction. Rather than a sportsbook setting the odds, traders buy and sell options on the outcomes of real-world events. This means that gambling-like products are available nationwide. Easy access to these platforms undermines that argument that legalizing iGaming would grant players 24/7 access to iGaming platforms is a bad thing, as they already have similar access right now.
A game of wait and see
Governor Hochul has not come out in favor of or against, leaving no clear direction of travel. Despite the best efforts of the pro-iGaming group, the bill’s success remains in the balance. If you had to take a bet on the outcome, it would be hard to know which way the dice will land. However, HTC union opposition is the most powerful barrier and is likely to be the most difficult to overcome.
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