Online gambling or iGaming has been gaining popularity in the last decade. The global COVID-19 pandemic helped push the interest toward online gambling even further, yet, not many US states currently offer the activity. Keeping in mind the economic impact of the pandemic, New York enjoyed fresh tax proceeds after introducing mobile sports betting early in January last year. But lawmakers in the state identified the potential of online gambling activities as well and now different proposals are calling for the legalization of iGaming.
The chairman of the Senate Committee on Racing, Gaming and Wagering, Sen. Joe Addabbo, filed one such proposal last week. Senate Bill S4856 was filed Wednesday which calls for the introduction of online gambling by tribal operators, licensed casinos, as well as video lottery terminal operators via gambling compacts with the state. Besides those operators, under Addabbo’s proposal, sports betting companies will also be able to try and secure licenses for iGaming.
iGaming to Bring Benefits to New York
One major benefit of online gambling is the tax proceeds the activity is expected to bring. Under Sen. Addabbo’s proposal, online gambling gross gaming revenue would be subject to a 30.5% tax. The tax rate, although it is not as high as the 51% tax rate for online sports betting, is expected to deliver millions in fresh tax revenue to New York. Besides the tax revenue, the state is expected to benefit from an approximate figure of more than $100 million from licensing fees alone.
Sen. Addabbo predicts that the online gambling operations are expected to deliver some $475 million in annual tax revenue after the first year, based on “conservative” predictions. This number doesn’t sound unreasonable, considering the popularity of mobile sports betting in the state. In fact, New York’s mobile betting market broke multiple records and only recently, it hit $1.79 billion in betting handle for January. This was a new all-time-high record for the betting handle.
But Addabbo’s proposal for the legalization of iGaming isn’t the only one making its way in New York. Recently, Assemblyman Gary Pretlow also filed a bill that calls for the legalization of the activity. He supported Assembly Bill A3634. Pretlow and Addabbo’s bills are similar, but they offer different tax rates for online gambling.
The proposals come at a time when New York is considering the establishment of three new casinos. The gambling regulator in the state opened an application request for the development of three downstate locations.