Exclusive Q&A: Senator Joseph Addabbo on New York iGaming

You recently introduced SB 8185 to legalize online casinos in New York. This proposal is very similar to SB 8412, which you introduced a couple of years ago, but it didn’t move forward. Why did you re-introduce this legislation? Why did you think the outcome might be different?

Number one, it is a little different in the sense that it’s iGaming and iLottery, which is basically an $11m funding for problem gaming programs. It’s a $25m fund to protect the workforce at our brick and mortars because we do not intend for iGaming to cannibalize any brick-and-mortar jobs. So, there are different elements to it. The timing of it is such because we have a fiscal situation. According to our state comptroller and even our Governor, the deficits for next year and the following years only get bigger. I believe next year’s number is $9bn at this point. So, if we were to do iGaming this year out of necessity we won’t realize revenue until next year anyway.

So, the idea here was to do it this year legislatively, set up the parameters and the platform, then hopefully realize the benefits. The fact is we understand New Yorkers are already doing iGaming in New York. The problem is they’re doing it illegally and they’re going to other states. So, if you really want to help, aside from the fiscal situation of our state, a New Yorker who has a mental issue or a problem gaming issue, you want to do this. Again, all of this is out of necessity. So, when you’re regulating in New York you have the opportunity to help a New Yorker who is already participating in iGaming.

Who did you work with in drafting this bill? 

As with mobile sports betting, we incorporate the input of many – advocates, operators, other electeds, my legal team. We try to get as much input as possible. Also, when we put out a bill, it’s a starting point. The idea is it’s a starting point for conversation and negotiations. Hopefully through the months of January, February and March, our budget negotiation periods leading up to an April 1 budget, all that input to the Governor’s office and our leadership will result in a final product we all can be proud of.

Now you had said earlier that the intention of this bill was not to cannibalize existing operators. So, does that mean entirely digital operators would not be able to enter the New York market?

Well, speaking of the New York market in terms of actual casino gaming there’s only seven licenses – four currently and we’re deciding on three right now. So there really are only seven maximum gaming licenses for brick and mortar. Of those current four and the future three, our intent was never to cannibalize any of these jobs. My constituents work at Resorts World. Why would I want to cannibalize and have my constituents in jeopardy of losing their jobs? That was never the intent of iGaming. Online casino actually improves the foundation on which brick and mortars exist.

We’ve seen that in New Jersey over the years iGaming has increased as well as the brick-and-mortar business. So, there is a co-existence, but just to show a willingness to understand the issue we put in a fund of $25m every year to protect brick-and-mortar jobs. Then we grow the jobs in the industry – their union jobs – by creating the live dealer and studio hands in New York State. The bill says a live dealer studio has to be in New York, so New Yorkers can have jobs as live dealers and those live dealer jobs are union jobs.

Now, you mentioned there are some fiscal considerations that were part of this bill. Can you talk about the kind of revenue this bill would generate and how much you project it will help the state of New York?

I always shy away from those questions because I don’t want to overestimate. If we just look at mobile sports betting numbers, we are doing phenomenally well. That is a strong foundation to build upon because you know the iGaming participants outnumber the sports betting participants just by sheer number. If you’re doing $2bn in revenue in two years with mobile sports betting, you can only figure that number grows exponentially with iGaming. Certainly, the potential exists. Analysts have said to me that, between iGaming and iLottery, together it will be about a billion-dollar-a-year industry. Some say more. I just look at what is a fact, and the fact is we have done phenomenally well with mobile sports betting, which shows New Yorkers have an appetite to game on a laptop or mobile device.

Given that appetite, we can grow and build upon that. I like our potential in terms of significant revenue and we’re not just looking at the first year. This is sustainable, significant revenue that we certainly need going forward. This is revenue we can use in a variety of ways. Traditionally, gaming revenue goes to education, but we can certainly shift that to healthcare, transportation, veterans or whatever the need might be in New York. Again, the iGaming issue is not a question of ‘Oh we want to do this.’ You might not want to do iGaming in New York, but the necessity is you may need to do iGaming in New York based on the fiscal situation. Not necessarily this year but the growing fiscal situation next year and the following years. 

That makes a lot of sense. Now, I’ve heard that an Assembly version of this bill might be introduced. Is that correct?  

Yes, I spoke to my good friend Gary Pretlow, Chair of the Racing and Wagering Committee in the Assembly and it’s imminent that they’re going to introduce this bill as well. Gary and I both know this is a starting point. When we introduced our mobile sports betting bill, the final product only included maybe 65% of our language.

Mobile sports betting in New York was fashioned after New Hampshire. It’s a different structure than we envisioned and it’s a successful product so I’m not going to question it, but the idea is it was a combination. Mobile sports betting was a negotiated product, which I’m hoping we can replicate with the Governor, the union and other advocates when we do iGaming. So, our bill is just a starting point but other input is going to be very important to the final product. 

What sense, if at all, have you gotten of the Governor’s feelings on all of this? 

I wish I could answer that. That’s an answer for the Governor. I can only be optimistic and point out the facts. All I can do is try to convince the Governor to work with the union, address their concerns and move forward – maybe not out of want, but out of necessity. If you’re a governor of any state, you want to protect your residents. You don’t want to have revenue leave your state. Every year, we lose about a billion dollars. So, every year we don’t do iGaming means we lose about a billion dollars to New Jersey, Pennsylvania, Connecticut and the illegal market.

That’s another year we can’t help our own people with a mental health issue or a problem gaming issue. I’m optimistic and I can only present the facts. We’re not getting help from the Federal Government anymore, so we need to find our own revenue. We have a big deficit this year and we want to help our residents. In the end, you’re right: it’s the Governor’s decision. I hate to be the one to remind people that every year we don’t legalize iGaming is another year we lose money. That’s another year we didn’t help our own people. To me, that is an issue we can easily address. 

You’ve mentioned several times in this conversation mobile sports betting in New York. As the Chairman of the Senate Committee on Racing, Gaming and Wagering you played a big role in that legislation. How do you think it’s gone so far? 

I’d say rather well. I always knew New York had this potential. We’re looked at globally as maybe the sports capital of the world sometimes. We have headquarters in New York of the major leagues. That first weekend in January 2022 starts off but we only have four operators. Just four. Out of the gate we broke national records for the first weekend. Then over the next two years we started breaking more national records for monthly handling amounts. I appreciate the work of the gaming commission and the operators. We offer a top-shelf product to New Yorkers but here’s what I’m really fascinated by: New Yorkers were already doing mobile sports betting before we regulated it.

They were going to Jersey, and they were going up to Connecticut. New Yorkers are smart. They’re so savvy that if we didn’t have a great product they would go back to the illegal route or other states in a millisecond. However, we have retained these New Yorkers in a safe environment. I’m proud of the product and it is successful. A total of $2bn in revenue for education is great. I love the fact that it’s so successful because we have changed a person’s pattern. They were doing it other ways, but now we have got them to stay with us. That shows the true success of our product, in my opinion. New Yorkers are savvy; they know their sports; they know their players. I do believe it’s helped the sport, and more people are in tune with player stats. I’m proud of the product, I really am. 

That’s awesome. Before we go, what else do you have planned legislatively for New York’s gambling sector in 2024? 

Great question. As legislators, we never sit back and say, ‘Oh, we did mobile sports betting. It’s one of the number one product in the country. We’re done.’ No. This is one of the most competitive markets. We need to figure out how to make mobile sports betting even better for New Yorkers. One thing I’d like to propose is proposition betting. Right now, in New York, you can’t bet on who’s going to be rookie of the year or who’s going to be the most valuable player.

 I want to incorporate that. I want to figure out a way to make horseracing seamless into the mobile sports betting arena. I think that we can do that better. So, there are other ways of improving mobile sports betting. Even though we have a successful product, there are ways to improve it for New Yorkers. That’s something I’d like to bring up during the budget process as well. 

I wish one of the New York teams had a good rookie you guys could wager on this year. 

[Laughs] As a Mets fan I am always optimistic around March or April. Then by September I’m kind of in the dumps but hope springs eternal. You never know. Maybe one day. Again, to give New Yorkers the opportunity to make that bet, where other states are already doing it, provides New Yorkers with a better product.

Sarah Chen

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