New York mulls igaming regulation after blockbuster betting debut
Empire State legislators introduce bill to license operators with 25% GGR tax rate
New York legislators, buoyed by the explosive start of sports betting, have introduced a bill to legalize and regulate online gambling in the Empire State for the first time.
Senate bill 8412, introduced by New York State Senator Joseph P Addabbo Jr, looks to amend current racing, pari-mutuel betting, and breeding law to include regulation of the vertical.
The bill allows commercial operators and New York’s tribal casino operators to operate regulated igaming, with each participating entity doing so paying a $2m one-off licensing fee to the state.
Licensed operators can partner with a maximum of two ‘skins’ with online operator partners, with those operator partners paying a one-time fee of $10m per brand used.
Licenses would remain in effect for a period of 10 years, with the New York State Gaming Commission (NYSGC) tasked with establishing and implementing a renewal process.
Online gambling operators would be taxed at a rate of 25% of gross gambling revenue (GGR), with all taxation monies separately maintained and sent to New York’s education-led state lottery fund.
As a requirement for licensing, operators would be obligated to maintain servers in the Empire State, with all players limited to one account per operator.
SB8412 also imposes responsible gambling requirements, the ability of New York players to self-exclude from igaming sites, as well as an obligation to prevent minors from gambling online.
The NYSGC is also required to provide a report on state-wide gambling-related harm, with all preparatory and administration costs derived from its compilation borne by licensees.
“This year, in its first month of operation, New York quickly became the leading mobile sports betting market in the nation, generating nearly $70m in tax revenue in a single month,” Addabbo Jr wrote in his preamble justifying the bill.
“Similarly, if authorized, New York would quickly become the national leader in online casino gaming, generating hundreds of millions of dollars in tax revenue annually for the state as it continues to recover from the economic downturn caused by the Covid-19 pandemic,” he added.
According to fiscal estimates provided as part of the SB8412, the Empire State could make as much as $475m annually in taxation revenue from licensed operators, with the state in line for $150m in licensing fees.
The introduced legislation passes for a review by the New York Committee on Racing Gaming and Wagering, a committee headed up by the bills proponent, Senator Addabbo Jr.
New York’s sportsbooks have enjoyed a blockbuster start to operation in the Empire State, smashing the $2bn barrier in January, with February also set to break the $1bn barrier.
During the first 20 days of February, bettors’ appetites remained undiminished, with Super Bowl LVI and the recent NBA All-Star games leading to increased betting throughout the month.