Centre of (almost) everything
The Big Apple has always pitched itself as the home of entertainment and the epicenter of everything cool, forward-thinking, and edgy. From the top Broadway shows to iconic museums and galleries and awe-inspiring buildings, New York is the go-to place for an action-packed, fun-filled adventure. While New York has some truly impressive brick-and-mortar casinos and has recently legalized online sports betting, online casino gambling remains prohibited despite attempts to update iGaming legislation.
Third time lucky
In January, New York Senator Joseph Addabbo Junior introduced a new bill to allow online lottery and casino gaming in the state. Under the proposal, iGaming licenses would be available for online casinos, video lottery terminals, Indian tribes, and sports betting operators. It proposed amendments to existing gaming and tax laws, as well as the introduction of responsible gambling initiatives and funding for problem gambling treatment and education programs.
The proposal was that authorized operators would pay a one-time fee of $2 million, and independent contractors providing iGaming platforms would be required to pay a one-time approval fee of $10 million. In addition, iGaming would be taxed at a rate of 30.5% of the license holder’s gross gaming revenue. This is the third time he has introduced a bill to legalize iGaming, but he has previously faced fierce opposition from organizations like the Hotel and Trades Council.
Resistance is protection
Resistance is primarily due to the fear of lost income among existing operators. The Union is concerned that legalizing online casino gambling would have a negative impact on land-based venues. There have recently been talks about a new casino being built in New York, and it is feared that iGaming would jeopardize brick-and-mortar businesses and jobs.
Addabbo’s bill is mindful of this opposition and is trying to find ways to bring the industry onto his side. After all, other states and countries manage to run the sectors in parallel without one cannibalizing the other. The new scheme, if passed, would ensure funds were available for employee training to ease the transition of staff from one gambling vertical to another. It also wants to create a framework for responsible gambling education and training.
One has to wonder whether it will change in the future. Addabbo’s attempt earlier this year to bring some of the best-rated casino sites in the US to New York’s residents and visitors was his third venture to do so. Many are hoping that it will be third-time lucky for the New York Senator, who believes a regulated market is a safer market.
Finding a way to play
Those in favor of legalization cite the fact that people play at offshore real money and sweepstake casinos anyway. They argue that people are much safer if they play in a safe and regulated market. This was the stance taken by Ontario when the Canadian province decided to create a legalized commercial market a couple of years ago.
Addabbo says,
“At a time when illegal gambling, underage participation, and identity theft are soaring, it is deeply concerning that prohibited, unregulated, and unenforceable gambling entities are providing easy access to illegal gaming sites and obtaining personal information of unsuspecting New Yorkers,”
Cracking down on sweepstakes casinos
New York legislators seem to be particularly opposed to sweepstakes casinos. However, rather than creating regulated, legal ones, it has taken the position that the operators should be banned from the state. There is a belief that poorly run sweepstakes casinos could be a gateway to problem gambling. However, it could be argued that the problem is that there are no online, real-money, legal alternatives.
Addabbo is among regulators who hope that the prohibition of sweepstake casinos will be a step in the right direction for creating the regulated market that he advocates for. In a recent NY government press release, he said,
“These so-called sweepstakes casinos not only put individuals at risk of fraud and financial exploitation, but they also create dangerous pathways for gambling addiction, especially among minors. This is not about taking away anyone’s livelihood; it’s about protecting New Yorkers and working toward a safer, regulated online gaming environment for age-appropriate individuals. I commend Attorney General James and her office for their dedication towards protecting our residents and for recognizing the urgent risks posed by these illegal platforms.”
Cease and desist
New York’s position is pretty clear. On June 6th, New York’s Attorney General announced that sweepstakes casinos would be prevented from operating in the state. Sweepstakes casinos have been operating widely across the country. Different laws govern them than their real money counterparts, as participants are not betting directly on the outcome of an event. Rather than paying to enter, they used the no purchase necessary route that has allowed promotional activity to run on major brands.
However, New York sent cease-and-desist letters to platform operators, claiming that state law prohibits online casinos from offering gambling that involves risking something of value. They argue that the gold coins used to gamble in sweepstakes casinos are of value because they can be exchanged for prizes or cash. The AG’s office contends that, as online sweepstakes casinos are not subject to regulatory oversight or audits, they could be rigged, which means New Yorkers could be put at risk.
Online sweepstakes casinos are illegal, dangerous, and can seriously ruin people’s finances,” said Attorney General James. “I thank the New York State Gaming Commission and Senator Addabbo for partnering with my office on this issue to protect New Yorkers.”
Can the genie go back in the bottle?
Resistance to changing online casino legislation to allow online gambling seems to fall into two broad camps: protecting existing businesses and protecting New Yorkers. However, many people think that in attempting to protect existing businesses, New Yorkers are being put at risk regardless. We live in a connected internet world. The more things get pushed underground, the more alluring they can appear.
Whether legal or not, those who love playing online slots or other casino games will find their way to unregulated sites and play without any guardrails. The genie is well and truly out of the bottle; it will be difficult to get it back in.
