
New York Senator Joseph Addabbo believes it is a matter of when and not if online casinos will be legalized in the Empire State. Addabbo is leading a group of legislators pushing for the authorization of online casinos in NY by the end of this year.
Although the senator has been receiving some opposition from brick-and-mortar casino workers, he believes the legalization of iGaming in New York is inevitable.
Tens of thousands of people gamble online through offshore casinos in NY. Legislators believe they can deal a blow to black-market casinos by legalizing the sector. More importantly, they’re confident iGaming could add an annual revenue worth $1 billion to the state.
The Current State of Online Casinos
Presently, online casinos exist in a legal grey area. State laws don’t prohibit New Yorkers from gambling online. But they also don’t allow investors to start an online casino business in the state.
As a result, New Yorkers can play online slots and card games at offshore casinos without worrying about breaking the law. The most popular NY online casino sites are based in the Caribbean—Panama, Costa Rica, and Curacao.
These casinos have licenses that prove their legitimacy. They secure their websites with SSL and offer games from recognized software providers. However, they don’t pay taxes to New York. And that is why legislators are deliberating on legalizing the industry.
Examining the Latest Online Casino Bill in New York
Sen. Addabbo first attempted to legalize online casinos in the Empire State in 2022. He failed. He worked on his bill again; this time, he’s confident it will succeed. His latest bill, S8185, features the following proposals:
Casino Licenses to Different Groups
The state senator and his compatriots plan to give out licenses to three downstate and three upstate casinos. VLT parlors like Empire City and Resorts World will also qualify for permits, and so will sports betting operators and tribal casinos.
Additionally, New York will give out three licenses to investors not affiliated with any casino or sportsbook. In 2022, the legislator proposed to prioritize companies partially owned by minorities. But he has since changed the wording of his bill.
Instead, the new bill encourages applicants to include minorities when providing employment opportunities. However, it doesn’t mandate them to give up ownership shares.
Taxation and Licensing Fees
Under the new bill, online gambling businesses will pay 30.5% of their gross income as tax to New York. Additionally, each applicant will need to part with $2 million for a license fee. And if the brand is located out of state and just need a license to promote its brand in NY, the fee will be $10 million.
For comparison, New Jersey taxes online casinos 13% of their income as tax. Sports betting companies pay 8.5%. New York has always favored high taxes for the gambling industry.
A case in point is sports betting. Sportsbooks in the Empire State pay 51% of their income as tax to the state. Most states charge half that amount. While it’s a high rate, sports gambling companies have been generating hundreds of millions of revenues every month since NY authorized the industry.
Fully Fledged Online Casinos
The new bill aims to legalize fully-fledged online casinos. This means operators will have the leeway to offer both slots and table games. Most states that have legal Internet betting provide all sorts of games.
Nevada is the only exemption. In the Desert State, operators can offer online poker and sports betting. But they can’t offer games of chance like slots, roulette and craps.
While Nevada made the law to prevent unfair competition to land-based casinos, studies in New Jersey show online casinos don’t cannibalize retail operators. In fact, casinos in Atlantic City have been attracting more revelers ever since iGaming became legal.
Marketing and Advertising Rules
Because Addabbo’s bill is yet to pass, it doesn’t include marketing guidelines for online casinos. However, operators should expect new guidelines on how to market their brands soon.
In most states, online casinos can’t advertise on TV during the day. They’re limited to graveyard advertising slots. They can advertise online by partnering with influencers.
However, social media companies and search engines like Google tend to restrict gambling adverts tremendously. As a result, most casinos advertise through celebrities and affiliate marketing.
Gambling businesses must be careful not to target underage players while marketing. They also must be clear with their terms and conditions. Any language that might mislead or coerce vulnerable groups into gambling can attract a penalty from regulators.
Problem Gambling Awareness
Senator Addabbo is aware that iGaming can have negative effects on players. To help minimize addiction in NY, he’s suggesting that 0.025% of the tax income generated from iGaming should go towards gambling awareness efforts.
For more context, the bill says the money set aside for problem-gambling education must be $25 million yearly. Another proposal in the senator’s bill is to notify players every time they deposit a certain threshold of money.
The senator’s effort to ensure problem gambling is addressed shows he’s aware of the potential downside of iGaming. And he’s willing to provide a solution should addiction become a major problem in the state.
Banking and Withdrawal Policies
Online casinos located in New York will most probably work with American payment methods. In that case, players won’t have issues finding proper payment providers for deposits and withdrawals.
As to how much you will need to gamble in New York, that remains to be determined. Most casinos in New Jersey have a minimum deposit of $10, meaning the rate will be similar in the Empire State.
The maximum you can deposit depends on your preferred payment method. However, casinos also dictate limits. Some allow you to deposit up to $10,000. Others are willing to take bets worth $100,000 or more.
When it comes to cashing out your profits, most casinos have limits. It ranges from $10,000 to $20,000 per month. Operators also dictate the cashout speed and the available withdrawal options.