The Fate of iGaming Legislation in New York
As the New York State government contemplates its fiscal future, a significant piece of legislation hangs in the balance. Senator Joseph Addabbo Jr.'s proposed iGaming bill, which suggests a tax rate of 30.5% on online casino revenue, was notably absent from Governor Kathy Hochul's budget for 2025. This omission has sparked concerns about the state's stance on the expansion of online gambling and its potential impact on the economy.
Governor's Stance and Legislative Implications
There is growing speculation that Governor Hochul may not back the iGaming bill during the 2024 legislative session. This development follows the inclusion of online sports betting in the 2022 budget, which came with a substantial 51% tax rate. The reluctance to include iGaming in the budget reflects a cautious approach by the administration, despite arguments that legalizing online casinos could bolster state profits and help alleviate budget shortfalls.
Proponents of the bill argue that without the legalization of iGaming, New York risks losing valuable revenue to neighboring states where such activities are legal, or worse, to illegal operations. This financial leakage is a pressing concern, as funds that could be retained within the state are instead benefiting others.
Industry Perspectives and Lobbyist Influence
Not all industry experts are optimistic about the bill's prospects. Steve Brubaker, an industry lobbyist, expressed his doubts regarding the passage of the legislation. He also pointed out that companies might be required to divest certain interests before they can apply for a gaming license, should the bill become law. This stipulation could significantly alter the current dynamics of the gaming industry in New York.
Last year's legal verbiage surrounding the issue may have been modified to favor particular industry players, a common practice in legislative processes influenced by lobbyists. Brubaker suggests that the language potentially replaced could have been more favorable to Evolution Gaming (Evo) or to the casino operators that utilize their services.
"You see bills 'legislating market share' all the time. It is the primary reason lobbyists exist," Brubaker remarked, highlighting the role of lobbyists in shaping legislation to benefit specific companies. His comments underscore the intricate interplay between industry interests and legislative outcomes.
Impact on New York's Economy and Gaming Industry
The uncertainty surrounding the future of online gambling in New York has far-reaching implications. The outcome of the iGaming bill will have a considerable effect on the state's economy and the gaming industry at large. Stakeholders across the board are keeping a close eye on developments, understanding that the stakes are high.
Senator Addabbo and Representative Pretlow, staunch advocates of the bill, emphasize the critical need for New York to capitalize on this opportunity, particularly in light of the state's financial challenges. "At a time of fiscal distress for our state, we cannot continue to allow hundreds of millions of dollars to be funneled 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," they stated.
The legislators' statement reflects a broader sentiment that the potential revenue from iGaming could serve important public interests, such as education funding. However, the path forward is fraught with political and regulatory complexities.
Conclusion
While the debate over the iGaming bill continues, it is evident that any amendments or changes to the proposal will be closely scrutinized for their potential to shift the balance of power within the live dealer segment of the gaming industry. As Brubaker notes, "While I do not see this bill passing, it will be interesting to see amendments that may be added to change the direction or focus of what is a battle for control of live dealer."
The conversation around iGaming in New York is more than just a matter of legalizing a form of entertainment; it is a complex negotiation involving economic strategy, political will, and the interests of various stakeholders. As the 2024 legislative session approaches, all eyes will be on Albany to see how this pivotal issue unfolds.