Empire State Considers iGaming Regulation
New York is considering introducing igaming regulations after the incredible success of New York sports betting sites. A 25% gross gaming tax on operators would apply in the Empire State if introduced.
New York Considering Online Gambling © Pixabay.
Thanks to the incredible success of sports betting, residents of New York could soon see online gambling permitted in the state as legislators have introduced a bill to legalise and regulate igaming.
New York State Senator Joseph P Addabbo Jr has introduced Senate bill 8412 (SB8412), which would amend existing racing, breeding law, and pari-mutuel betting rules to include regulation of igaming.
The bill would allow commercial and New York tribal casino operators to operate licenced igaming. However, the licence wouldn’t come cheap, with each operator required to pay a one-off licencing fee of $2m (£1.5m), which will be paid to state coffers.
Additionally, operators can team up with a maximum of two ‘skins’with online operator partners. In this scenario, operators will be required to pay an additional one-time fee of $10m per brand used, which is equivalent to £7.5m.
Licences would be granted on a fixed-term basis, with operators given ten years. The New York State Gaming Commission (NYSGC) would be responsible for renewing the licences.
Those operators who successfully obtain a licence to offer igaming products would be taxed at a rate of 25% of gross gambling revenue (GGR). In addition, all money raised by offering gambling products would be ringfenced and sent to New York’s education-led state lottery fund.
The taxation rate of 25% is likely to be attractive for operators as it is more than 50% lower than the sports betting tax rate of 51%.
As part of the licencing conditions, operators who successfully obtain a licence will be obliged to house their servers within the Empire state. There will also be a restriction of one account per customer.
As is the case with existing sports betting accounts, operators must give customers the ability to self-exclude from all gambling products (sports betting and igaming). Operators will also have a legal obligation to prevent underage gambling online.
The New York State Gaming Commission will be required to provide a report on state-wide gambling-related harm with all costs involved in this process being borne by the licensees.
Addabbo Jr wrote: “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,”
“Similarly, if authorised, 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,” Addabbo Jr added.
According to estimates submitted by the New York State Senator, regulation in the igaming space would generate as much as $475m annually in taxation revenue. Additional calculations show that a further $150m will be raised in licensing fees.
The New York Committee on Racing Gaming and Wagering will review the introduced legislation. A committee headed up by Senator Addabbo Jr.
Senator Addabbo will be looking to replicate the incredible success that sports betting in the state have enjoyed. Sports betting debuted in January this year and smashed the $2bn barrier. Despite having three days less trading, February is on track to also break the $1bn mark.
