Can New York Legalize Online Casinos In 2023?

This week, a long-awaited bill to legalize was introduced. 

State Sen. Joseph Addabbo sponsored the bill, which would create a robust online gambling industry in the state.

The outlook is bleak in 2023, but the introduction of legislation is an important step forward in the typical multi-year process of legalizing online casinos. 

Under the Hood of SB 4856

Under the bill, SB 4856, licenses would be reserved for:

• Commercial casinos (four upstate and three downstate)
• Tribal casinos (three tribes: Seneca, Oneida, Mohawk)
• Racetracks (two: Empire City and Resorts World)
• Licensed sports betting operators (nine: FanDuel, DraftKings, Caesars, BetMGM, BetRivers, PointsBet, BallyBet, WynnBet, and Resorts World Bet)
• Three additional licenses would be made available through a competitive bidding process.

That creates up to 24 licenses. However, the number will be lower, as there is some overlap between casino operators and licensed sportsbooks, and both racinos are in the running for a downstate casino license.

The bill has a multi-level licensing fee ($2 million or $10 million) depending on the branding structure and would tax operators at a 30.5% rate. 

One of the more interesting components is an accelerated launch timeline, including immediate licensing. That’s not surprising, considering all of the licenses (sans the three competitive bidding licenses) are already licensed in the state. 

The bill also calls for a launch date of 120 days after regulations are published. That rush (New Jersey is the fastest state to launch an online casino industry at nine months from legalization to launch) indicates New York regulators would rely heavily on existing approval in other jurisdictions for game and system testing. 

On the responsible gambling front, the bill:

• Requires $11 million of annual tax revenue to be set aside for problem gambling.
• Has a responsible gambling messaging trigger after $2,500 in lifetime deposits.
• Institutes a $2,500 annual cap on deposits by credit card.

Addabbo also included a unique policy that requires all live dealer games to be union jobs. 

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Will This Time Be Different?

New York’s latest incursion into the legal online casino conversation has a Lucy with a football feel to it. New York has been down this road many times, and always ends with heartbreak. 

On the other hand, the Empire State has made significant strides in recent years. First, legalizing daily fantasy sports at the eleventh hour in 2016. In 2019, New York followed through on a preexisting retail sports betting law. And in 2021, the state legalized . 

The one area that has eluded the Empire State is online gambling – casinos, and poker. 

New York took numerous bites at the online poker apple in the mid-2010s. Under Sen. John Bonacic’s (retired in 2018) leadership in the Senate Racing, Gaming and Wagering Committee, the Senate passed multiple online poker bills.

• In 2016, the NY Senate passed S 5302 by a 53-5 vote
• In 2017, the NY Senate passed S 3898 by a 58-9 vote

It was a different story with his counterpart on the Assembly Racing, Gaming and Wagering Committee, Gary Pretlow. The committee was an impenetrable forcefield for online poker, with Pretlow shifting from optimistic to pessimistic on a whim. Pretlow relished in his gatekeeping role, citing numerous reasons for inaction ranging from geolocation to cheating to the skillfulness of poker to the gambling views of female lawmakers.  

Pretlow’s reasons read more like excuses and even drew the ire of Sen. Bonacic, who told PokerNews that Pretlow’s comments about skillfulness didn’t make sense and was news to him. “When I asked him if he was going to move the bill, he said he didn’t know. He never said to me what he told you.”

For Addabbo’s online casino legislation to pass, he must do what Bonacic couldn’t and bring Pretlow on board. He will also need to convince Gov. Kathy Hochul to support his proposal – Hochul’s budget didn’t include any revenue from online casinos.