Push Begins for Online Casino Legalization in New York

After establishing itself as the top online sports betting state in the U.S., New York through its legislators is ready to make another run at the legalization of online casino gambling. The prior online casino legislation failed due to a lack of legislative support and interference from upstate retail casino owners.

The Introduction of SB 4856

Sports Betting historians in New York will remember that it was Sen. Joe Addabbo who led the charge that brought online sports betting to the residents last year. Now Sen. Addabbo is back with SB 4856 to make a run at getting online casino legislation passed.

In an interview with PlayUSA, Addabbo stated: “We’ve got to get the governor and other legislators to have an appetite to do this. If online operators want this, I need them to weigh in through media outlets and really directly with the governor. I need them to say we want to do business in New York.”

In an effort to show the House's support of Addabbo's legislation, Asm. Gary Pretlow has said he will update his House legislation, AB 3634, to match the details put forth on the Senate side. Together, they are hopeful that the new language and terms of these bills will be enough to garner enough support among legislators.

With the state taking in 51% of the gross sports betting revenue as taxes, the incentive should be there to get something passed based on the state's online sports betting model.

The Details in SB 4856

The big push behind this new legislation centers on giving the state's online sports betting operators the ability to add online casino gambling to their New York platforms. Prior attempts at online casino legislation were largely focused on giving online casino licenses to the state’s seven retail casinos upstate and three Indian gaming tribes.

Assuming the details do look the same in the Senate and House bills, the details would look something like this:

• The applicable tax rate on gross revenue would be 30.5%, up from 25% in prior bills
  
• 10-year licenses would be granted for $2 million
  
• Up to 29 operator licenses would be granted
  
• Licensees would only get access to one (1) skin
  
• Live dealer jobs must be created
  
• $11 million of the tax revenue would be allocated to problem gambling initiatives
  

Online Sports Betting Operators Seeking Help

In recent weeks, leading representatives from DraftKings and Fanduel have been seeking help from the NY State Legislature. The issue at hand is the 51% tax rate on sports betting revenue. The operators are concerned their businesses will be crashed by the tax burden if they don't take drastic measures such as offering less attractive odds to NY sports bettors.

In the eyes of sports betting operators, opening the door to online casino gambling would bring in more revenue and ease the tax burden. At this point, the biggest hurdle would seem to be getting this legislation past Gov. Kathy Hochul.