Communicated Content – Hudson Valley and the wider New York state have never been major advocates of gambling, although they have, to some extent, tolerated it with a small number of brick-and-mortar casinos. Social casinos, a form of online casino in which there is no actual exchange of cash, are legal. Sports betting too, although citizens must go to a land-based casino to do this.
The governor of New York, Andrew Cuomo, is looking to create change and pave the way for three more upstate casinos. He is also making provisions for online gaming, so sports books have become legal.
Impact of gambling on New York State economy
Many New Yorkers enjoying betting on their favorite sports team, so legalizing online sports betting could give the state a big boost in revenue.
Right now, the state economy is in a bad way. Earlier this year, the governor announced his intention to push for the legalization of online sports betting to help rebuild the economy.
The plan, he explained, was to operate in a way that, like a lottery, more of the revenue went to the state than to the casinos. According to state comptroller Thomas di Napoli, online sports betting could generate as much as $493 million per year.
The success of online gaming for New Jersey has encouraged New York to pin some hopes on legalizing more gaming. An estimated 20% of New Jersey’s gaming revenue comes from New York players who cross bridges and tunnels to make bets.
Each year, New York spends over $270 million on promoting and marketing the lottery and virtual lottery terminals (VLTs). Last year, gaming activities in the state generated a turnover of $3.7 billion.
Compared to 2019, however, lottery revenues were down. Between January and September 2020, revenue fell by $132 million.
Changes in laws to benefit New York state
New York hasn’t been particularly receptive to online betting, but the problems the economy has had to contend with mean that the Governor has had to take action.
The approval of the Governor’s budget means that the state is to legalize online sports betting, including mobile sports betting.
The Cuomo administration’s figures leave it in no doubt that they expect sports betting to produce massive amounts of revenue. This year alone, online sports betting could bring in $99 million in tax revenue.
Of course, the legalization of sports betting is one of several measures. Possibly more controversial is the legalization of marijuana, which is expected to create around $20 million in tax revenue.
Further measures that will contribute to the budget include tax increases and federal aid.
What does all this mean for land-based casinos and operators?
Land-based casinos will face stiff competition from online casinos.
The legalization of online gaming will give any operator a potential edge over land-based casinos and sports betting establishments.
Currently, sports betting is legal in physical establishments. However, the availability of online sports betting and other forms of gaming will appeal to anyone who doesn’t feel like making a trek over the Hudson.
General variety and convenience like this could be a major worry for brick-and-mortar casino operators. Ninety per cent of all the bets that occur in New Jersey, for instance, do so online.
Online gambling services of any sort are relatively quick to set up. Those looking to play at a casino, often find it far more convenient to do so online, this is expected to give land-based operators serious competition.
Scrambling for the licenses
Now that sports betting has been passed into law, there is a scramble for licenses.
The State Gaming Commission will request bids from mobile betting platforms before allocating licenses to two of them.
The operators that receive the licenses will pay the commission a one-off fee of $25 million. They’ll then pay a further annual fee of $5 million to the casino they partner up with and will house its servers. The state is then to tax gross gaming revenue at no less than 12%, although they’ve yet to establish what the rate will be.
The hope is that the lawmakers will be able to award licenses by January 1st, 2022. This would give the successful bidders time to set up their services in time for the biggest event in the US sporting calendar: The Super Bowl.
The action taken by the state so far suggests that they may be feeling the pressure of the hole in state finances.
The legalization of sports betting is a small step that could pave the way for further online gaming in the state. Players who are heading out of state just so they can play in a casino may stay within New York to satisfy their gaming and leisure requirements.
Operators will be watching the developments very closely, as the situation could create exciting opportunities for them.
Meanwhile, additional governmental measures will not only seek to rebuild the economy, but also bring in money to tackle some of the social issues that citizens and the wider state may be facing.
These are all positive steps, and the future is looking bright for online gaming operators in New York.
