Uncertainty Surrounds iGaming Legislation in New York
The future of online gambling in New York hangs in the balance as legislative developments unfold. A significant piece of proposed legislation, Senator Joseph Addabbo Jr.'s iGaming bill, has notably been left out of Governor Kathy Hochul's 2025 budget plans. This exclusion casts doubt on whether the governor will back the bill during the 2024 legislative session, a move that could have profound implications for the state's economy and gaming industry.
Taxation and Revenue Prospects
The bill under consideration sets forth a 30.5% tax on online casino revenue, a potential source of substantial income for the state. In comparison, online sports betting, which was incorporated into the 2022 budget, carries a hefty 51% tax rate. Proponents of the iGaming bill argue that legalizing online casinos could provide a much-needed boost to state profits, helping to alleviate budget deficits.
Without the legalization of iGaming, New York runs the risk of losing valuable revenue streams to neighboring states where such activities are legal, or worse, to illegal operations. The urgency to capture this income is heightened by the fact that it could be channeled into funding public services, such as education.
Industry Perspectives and Lobbyist Insights
Despite the potential financial benefits, the bill's passage is far from certain. Industry lobbyist Steve Brubaker has expressed skepticism about the bill's prospects. He also pointed out that companies may be required to divest certain interests before they would be eligible to apply for a license, should the bill become law. This stipulation could reshape the competitive landscape within the industry.
Brubaker has also highlighted how last year's legal language might have been amended to favor particular players within the industry, suggesting that lobbyists often play a pivotal role in crafting legislation to benefit specific companies. The influence of these lobbyists is a common theme in legislative processes, particularly when market shares and control over lucrative sectors like live dealer games are at stake.
Legislative Influence and Market Dynamics
Comments from Brubaker underscore the complex dynamics at play as he mentioned, "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." This indicates potential adjustments in the legislative language that could tilt the scales in favor of certain entities, underscoring the strategic maneuvering that can occur behind the scenes.
He further elucidated the nature of such legislative efforts by stating, "You see bills ‘legislating market share’ all the time. It is the primary reason lobbyists exist." These remarks reveal a candid view of how lobbyists may shape policy to secure advantages for their clients.
With an eye towards the ongoing debates, Brubaker added, "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." His commentary suggests that even if the current form of the bill does not succeed, there could be significant alterations that shift the legislative conversation and potentially open new avenues for compromise or contention.
Political Will and Economic Impact
The political will to push through the iGaming bill remains uncertain, but the economic stakes are clear. As voiced 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 funneiled 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."
This statement encapsulates the argument for proponents of the bill: the potential revenue from iGaming is too valuable to ignore, especially when considering the beneficial uses for such funds. As the debate continues, all eyes will be on the New York legislature to see if they will seize the opportunity to capitalize on iGaming or if hesitation will prevail, leaving the state's gaming industry in limbo and its potential revenues untapped.
As the 2024 legislative session unfolds, the decisions made regarding the iGaming bill will undoubtedly have lasting effects on New York's economic landscape and the future of online gambling within the state.