New York Online Casino Debate Reopens

New York lawmakers reopened the debate over legalizing online casino games this week, introducing parallel bills that would authorize and regulate the industry as part of a broader reshaping of the NY iGaming landscape.

The proposals, filed Wednesday by Sen. Joseph Addabbo Jr. and Assemblywoman Carrie Woerner, were referred to their respective Racing, Gaming and Wagering Committees. It marks the fourth consecutive year Addabbo has advanced iGaming legislation, though the surrounding policy environment has shifted materially since earlier attempts stalled.

Scope Of Proposed NY Online Casino Market

The legislation would permit online casino gaming statewide, allowing digital versions of slots, table games, live dealer products and poker tournaments.

Eligibility would extend to commercial casinos, video lottery terminal facilities, tribal operators through compact agreements, and existing mobile sports betting licensees.

Unlike some multi-skin iGaming markets, the New York proposal would limit each eligible operator to a single branded online casino. Interactive gaming servers would be required to be housed at licensed gaming facilities within the state.

The bills would also legalize online lottery sales, further expanding New York’s digital gaming footprint.

Tax Rate And Licensing Costs

The proposals set the online casino tax rate at 30.5% of gross gaming revenue, well below the 51% NY sports betting tax, but among the highest contemplated for iGaming nationally. Promotional credits and bonuses would not be deductible from taxable revenue.

That rate is still better than the 54% tax rate paid for online slots in neighboring Pennsylvania. Online table games are taxed at 16% in PA.

Licensing fees would be set at $2 million per eligible operator. Companies seeking to act as independent platform contractors or host branded online casino products would face a separate $10 million licensing requirement.

Labor Provisions And Political Context

The latest legislation attempts to account for the labor concerns that derailed previous iGaming efforts in Albany.

Applicants would be required to demonstrate labor peace agreements as part of the licensing process. The bills also establish a dedicated funding mechanism for workforce development, responsible gaming education, health initiatives and employee training, with annual funding required to reach at least $25 million statewide.

The renewed push comes after several politically sensitive gaming issues were resolved late last year. In December, New York enacted a ban on sweepstakes-style casino platforms using dual-currency models. Around the same time, the state completed its long-running downstate casino licensing process, awarding licenses to three projects backed by major gaming developers.

Those developments removed two obstacles lawmakers had previously cited when declining to advance online casino legislation, but resistance is still there. The Hotel and Gaming Trades Council has consistently warned that online casino expansion could divert revenue and jobs from brick-and-mortar properties.

Narrower Online Poker Option

Woerner also introduced separate legislation that would classify certain online poker games as games of skill, creating a more limited regulatory option if broader iGaming legalization fails to gain traction.

Even if enacted, online casino gaming would not launch quickly. New York’s mobile sports betting market, legalized in 2021, did not go live until early 2022 following extensive rulemaking. Any iGaming rollout would likely follow a similar timeline.

Photo by AP Photo/Seth Wenig