How Popular are Online Casinos in NY?
Outgoing Governor, Andrew Cuomo, is on the record touting New York as the biggest untapped online gambling market in the US. Yet, Cuomo never attempted to legalize online casinos since 2011—when the Department of Justice clarified states could legalize the industry.
Interestingly, it was New York and Illinois that requested the DOJ to clarify whether online casinos were banned under the Wire Act of 1961. The DOJ responded with a favorable answer. And by 2018, New Jersey, Pennsylvania, Delaware and West Virginia had permitted online casinos.
The Legality of Online Casinos in New York
Under Gov. Andrew Cuomo, New York lagged behind most states in legalizing online gambling. Instead, the state legalized in-person sports betting in 2019 with an option to sanction mobile betting afterwards.
The Empire State finally made mobile betting into law April this year. Under the law, the New York State Gaming Commission will license two sportsbooks after a series of competitive bidding and vetting.
The winning bids will be sportsbooks willing to pay the highest amount of tax to New York. Presently, the state expects a minimum of 12% in monthly tax and a $25 million license application fee, which must be renewed after ten years.
That said, New York is yet to legalize online casinos. It permits brick and mortar tribal casinos like Yellow Brick and Turning Stone Casinos. What’s more, it features commercial resorts like the Del Lago Resort but prohibits Internet-based casino sites, including poker platforms.
New Yorkers Spend Over $600M at New Jersey Casinos
As we stated earlier, online casinos are legal in New Jersey. And guess what? They welcome gamblers from all over the country. The only caveat: you need to travel to the Garden State to relish its gambling offerings.
New Yorkers make up over 20% of casino tourists in New Jersey. In 2019, gamblers from the Empire State spent $657 million at NJ casinos, which is testament New Yorkers are yearning for legal online gambling.
To expound more, New Yorkers have the opportunity to gamble online at illegal out of the country casino sites. Instead, they choose to visit NJ to gamble at legal casinos and sportsbooks.
FanDuel’s NJ website is a case in point. In 2019, the sportsbook gathered 25% of its revenues from New Yorkers. Its rival, DraftKings, generated 20% of its annual gaming income from Empire State customers.
NY Might Legalize Online Casinos
According to tax analysts, New York lost roughly $6.3 million in potential online gambling tax to New Jersey in 2019. In total, it lost $42.9 million in revenue, money which could have boosted the state’s economy through job opportunities.
With that in mind, all hope isn’t lost. New York might come to its senses and legalize online casinos once it understands the potential in the industry. The Empire State aims to tax online sportsbooks up to 20% of their revenues.
If its efforts lead to collecting dozens of millions per year, there will be nothing to stop New York from legalizing online gaming as well.