After New Jersey became the first state to allow online casinos in 20123, state after state is following suit after seeing the benefits. One of the biggest benefits is of course the monthly tax revenues that are in the millions.
The New York State Gaming Commission approved online sports betting in January 2022. Despite the fact that in just 1 year, the sports betting market has flourished and is generating more than $700 million in taxes, other types of casino activities remain illegal.
However, with another proposed bill (S4856) having been presented recently, there’s a chance the New Yorkers will be able to enjoy gambling full on in the near future.
Areas Receiving Special Attention
With Senator Joe Addabbo (great name btw) at the helm, there are a few areas of the casino business that receive more attention than others. Besides the obvious new revenue stream for the state, some of the others are how to prevent people from playing on illegal sites or taking their gambling to other states and Responsible Gaming.
There’s no doubt that implementing extensive measures towards Responsible Gaming is important and it looks like the ones for New York will be tougher than in other states.
According to the new proposal, each operator that is looking to obtain a New York iGaming license has to implement as many as 13 steps towards Responsible Gaming.
Examples of these are:
- List information to customers who need assistance with “compulsive play”, including a toll-free number.
- Must allow players to set daily, weekly and monthly betting limits.
- When a player exceeds $2,500 in lifetime deposits, the individual will be presented with responsible gambling messaging.
- iGaming operators are required to create publicly accessible internet pages dedicated to responsible play.
- NY online casinos must submit annual responsible gaming plans to the New York State Gaming Commission (NYSGC) and problem gaming plans approved by the NYSGC in consultation with OASAS. The latter would include objectives of the plan and procedures for “identifying users with suspected or known problem gaming behavior.”
So what would it cost to obtain a license? Those interested would have to pay $2 million in licensing fees ($10 million for independent contractors using a brand from another licensee).
One of the biggest reasons for any government to allow online casinos to run a legal business is of course the revenue they can pull in taxes. The proposal for any online casino operator in New York is 30.5% on gross gaming revenue.
Considering most other states average 15% to 18% for their iGaming tax rates, this one is quite a bit higher. Then again, everything is more expensive in New York so I guess it was expected. Out of these taxes, as much as $11 million per year will be dedicated towards problem gambling education and treatment purposes.
More Than 20 Online Casinos
According to the new bill, it says that the state would “carve out one online skin per licensee”.
At the moment there are 9 existing sportsbooks in New York. They are obviously allowed to apply for a license and if they do, the overall number of potential operators could be more than 20.
Restrictions Regarding Live Dealers
With a license, each operator would be allowed to offer both slots and table games, including live casino.
Interestingly enough, the bill requires the live dealer studio to be located within the state of New York. However, this doesn’t mean it has to be within the actual gaming facilities.
Will They Beat the Clock?
If they want to pass the bill in 2023 the lawmakers will have to move quickly as there is a deadline for such legislation coming up on June 8th. They can of course continue a discussion even after the deadline has passed but that would mean any potential legislation would have to wait until 2024.
I get the feeling that it won’t happen this year and the fact that Governor Kathy Hochul has already excluded online casinos in her executive budget for 2024, doesn’t exactly help the situation.
Every Year Means Money Lost
Both New Jersey and Pennsylvania are reporting annual tax revenues of more than $1 billion. New York has already established itself as the top sports betting area in the US and it wouldn’t take long before they would rise to the top in casino gaming as well.
However, for every year that the legislation is postponed, all that extra money will go to neighboring states. Ouch!
In other words, stay tuned. I know I will.
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