Examining the Fate of iGaming in New York
In a significant development for New York's online gaming landscape, Senator Joseph Addabbo Jr.'s proposed iGaming bill was conspicuously absent from Governor Kathy Hochul's 2025 budget plan. This omission signals potential roadblocks ahead for the legislation that seeks to impose a 30.5% tax on revenues generated from online casinos.
The absence of the iGaming bill in the Governor's budget raises questions about its future during the 2024 legislative session. Despite Governor Hochul's current stance, proponents argue that legalizing iGaming could offer a substantial financial boon to the state by addressing budget deficits and boosting profits.
New York has previously shown openness to online betting, integrating online sports betting into the 2022 budget with a hefty 51% tax rate. This move underscores the state's recognition of the lucrative nature of the online betting industry. However, the reluctance to embrace iGaming could result in significant financial losses as potential revenue may flow to neighboring states or illegal operations.
Industry experts are weighing in on the issue, with lobbyists like Steve Brubaker expressing skepticism regarding the bill's passage. According to Brubaker, there is also the possibility that companies interested in entering the market might have to divest certain interests before applying for a license, should the bill be enacted.
There are concerns that last year's legal language might have been altered to favor specific industry players, highlighting the influence lobbyists often wield in shaping legislation to benefit particular companies. This maneuvering within the legislative framework points to the complex interplay between lawmakers, industry stakeholders, and lobbyists.
Lobbyists and Legislative Language
Brubaker's commentary sheds light on the intricacies of legislative lobbying, where bills are sometimes crafted to 'legislate market share,' ensuring advantages for certain companies over others. He notes, "You see bills ‘legislating market share’ all the time. It is the primary reason lobbyists exist."
Further, Brubaker hints at potential shifts in the legislative language that might have occurred since the previous year, which could have implications for companies such as Evolution and others involved in the casino industry. He suggests that last year's language drafted by Lewis and Wright (L&W) may have been replaced with terms more favorable to certain entities. "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," Brubaker remarks.
Despite his reservations about the bill's success, Brubaker acknowledges the dynamic nature of the legislative process, noting the potential for amendments that could alter the trajectory of the bill and affect the ongoing battle for control within the live dealer segment of the gaming industry.
Impact on New York's Economy and Gaming Industry
The stakes are high for New York's economy and the gaming industry as the outcome of the iGaming bill hangs in the balance. Legalizing online gambling could inject much-needed funds into state coffers, with supporters like Sen. Addabbo and Rep. Pretlow emphasizing the missed opportunities for revenue generation. They argue that without the legalization of iGaming, hundreds of millions of dollars could continue to be diverted either to other states or to disreputable companies operating outside the purview of state regulation.
"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," assert Sen. Addabbo and Rep. Pretlow.
The debate over iGaming in New York exemplifies the broader challenges faced by states navigating the complexities of regulating online gambling while attempting to capitalize on its financial benefits. As the 2024 legislative session approaches, all eyes will be on the unfolding developments, with the economic implications for New York hinging on the decisions made by its legislators.
Ultimately, the fate of online gambling in New York remains uncertain, but it is clear that the outcome will significantly shape the state's economy and its gaming industry for years to come.