Sen. Addabbo tells NY to ‘face the facts’ after igaming shunned in ’24 budget

New York Capitol - Sen. Addabbo on igaming
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Sen. Joe Addabbo has expressed his disappointment that the New York state executive budget for FY24 made no provisions for igaming introduction, telling the government to ‘face the facts’ about consumer habits. 

The senator, who has long been an advocate for gambling expansion in the Empire State, told reporters that Gov. Kathy Hochul’s budget was not a surprise, but that there are clear concerns about untreated problem gambling and loss of state revenue. 

Sen. Addabbo raises concerns over problem gambling

Addabbo is concerned that players are either fleeing to the black market or over state lines to play online casino games and are potentially left suffering from problem gambling which is going undetected or untreated. 

Reacting to the publication of Gov. Hochul’s budget, Addabo said: “It doesn’t mean the end for the igaming push. It’s not a good sign. But if we choose not to do it this year, and every year we don’t do it, let’s face the facts.

“Between the money lost to the illegal market; between the money lost to New Jersey, Pennsylvania and Connecticut because you know New Yorkers are participating in igaming; you can’t help them addiction-wise.”

It has long been an argument that regulation means deterring players from the black market and that player protection is an essential part of regulations and a large part of getting legislation over the line. However, recent developments have put this notion into doubt. 

Will regulations help tackle problem gambling?

This week the National Council on Problem Gambling published a report that claimed the seven regulated igaming states do not go far enough in terms of player protection, and labelled legislation there as ‘insufficient’ in tackling problem gambling. 

In particular, Delaware, Nevada, Michigan and West Virginia were called out by NCPG as not meeting the necessary standards that it expects in terms of providing players with sufficient RG protections. 

A spokesperson for NCPG stated: “Igaming regulations in Delaware, Michigan, Nevada and West Virginia do not mandate operators provide players with sufficient responsible gambling protections. Regulations from Connecticut, New Jersey and Pennsylvania met a majority of the standards outlined in the IRGS, but still fall short of meeting the full list.” 

Nevertheless, as New York has not devised any igaming regulations, Addabbo’s point on player protection still rings true; currently, the only igaming options for New Yorkers are the black market or travelling over state borders. 

In his viewpoint, protecting players is a key part of any igaming regulations, as well as taking up the opportunity to capitalize from ‘billions’ in tax revenue. 

New York’s sports betting market set records for handle and taxes gained in 2022 – its first full year of online sports betting. 

With igaming margins notoriously more favourable for operators, there is ample potential for extra taxes for the New York State. 

Addabbo added in his statement: “If you don’t regulate it, you don’t know who they (the players) are. And if you take into account the revenue we would’ve made, which covers around $2bn in the first year, then we’re looking at roughly $3bn a year lost every year we don’t do igaming, plus not helping with addiction. 

“If that’s what we want to give up, because you don’t want to do igaming this year, so that it starts this year or the following year, then so be it.” 

Gambling expansion in NY

As previously mentioned, Addabbo has long been an advocate for gambling expansion in New York and has recently filed legislation to expand the Empire State. 

He filed S2343, which would allow sports betting terminals for fixed-odds horse betting at a variety of locations including pro sports stadia, off-track race venues and automobile racing arenas.

He has also expressed support for HB1380, which would legalize online poker in the Empire State, whilst also sponsoring S1962, increasing the number of online sportsbook operators in the market, and reducing the state’s online sports betting tax rate as a result.
This final point would be particularly pertinent given the recent developments in the NY sports betting market when DraftKings and FanDuel appealed to legislators to reduce the tax rate imposed on AGR, currently set at 51%.