After introducing a bill last week that would add iGaming to online NY sports betting, Sen. Joe Addabbo is hopeful to have an open roundtable discussion on the topic in March.
Addabbo would like online casino gaming, which could enhance online New York sports betting, added to the Senate one-house budget.
The final NYS budget for fiscal year 2024 must be approved by April 1.
Daunting challenge to pass NY iGaming
However, it could help online NY sports betting operators reportedly struggling with paths to profitability.
“My plan is to have an open roundtable discussion in March about iGaming. Where we may hear further suggestions and ideas which may further alter or amend the bill. But nevertheless, it starts a conversation right before the Senate one-house,” Addabbo told LSR Thursday.
Addabbo: Need help to clear hurdles
Industry insiders say the bill’s introduction will kick off a significant lobbying campaign.
“There has to be appetite for it. I can’t be the only one who wants to push this,” Addabbo told LSR. “This has to be a collective agreement between the Senate, the Assembly and the Governor.”
Addabbo says there is no reason for legislators to allow significant revenue to leave the state every year, only to end up in the hands of neighboring states with iGaming like New Jersey and Pennsylvania, as well as illegal operators.
Under bill S4856, iGaming would feature a 30.5% tax rate, as opposed to the 51% tax rate imposed for online sports betting. It would bring slots, table games, poker and live dealer to online casino apps.
DraftKings CEO addresses NY iGaming
On a Friday earnings call, DraftKings CEO Jason Robins addressed the possibility of iGaming in New York. Robins advocated for legalized NY online casino gaming at a recent joint hearing.
He told investors:
Obviously, there’s a lot of moving parts. How big is the market? What’s the structure around the tax rate? Promotional deductions? Those sorts of things. I think in general what we’ve said in the past is we assume roughly 7-9% of the US population are new sports betting markets each year, and 3-4% for iGaming. So New York obviously would be on the upper end of that.
But overall those assumptions are baked into our 2024 guidance. I don’t think, even if New York did pass a bill this year, it’s unlikely that it would go live this year. Remember they passed a (mobile sports betting) bill the year before they went live, it was early the following year (Jan. 2022), but it took until the following year to go live for mobile sports betting.
So some states have been faster, but I think most have generally been the following calendar year. So I think we’re looking at 2024, and as I mentioned we’ve built in some assumption around that. But this would be a bigger iGaming market than we had assumed.
Robins also noted the “enormous” cross-sell opportunity in the NY market after acquiring hundreds of thousands of customers from sports betting.
Other NY sports betting issues
Addabbo and counterpart Assemblyman Gary Pretlow have both shown an appetite for expanding the sports betting menu.
“We are having legal counsel look at the constitutionality of the award-type bets, knowing that neighboring states do it. And at least some New Yorkers are doing it there or illegally, certainly,” Addabbo said. “So we are looking at the constitutionality of that.”
Adding NY sports betting kiosks
Addabbo and Pretlow reintroduced their kioss bills from last session. Granted, there does not appear to be much momentum on that front.
“Those that are interested in kiosks (stadiums, racetracks, arenas), they’re gonna have to weigh in with the Governor’s office and say please, please, please entertain this idea,” Addabbo said.
NY sports betting tax rate debate
Operators who negotiated and agreed to the 51% tax rate want a reduction. DraftKings’ Robins has claimed the company would be “forced” to offer worse odds and lesser promotions if there is no decrease.
“The operators have about five weeks to make a credible, fiscal argument that tinkering with the No. 1 product in the nation makes sense. I don’t think (that argument) exists, but I’ll leave it to the fiscal analysts to figure it out. Because none of us are going to go back to New Yorkers and say we reduced educational funding or revenue,” Addabbo said.