January 8, 2024, marked the second year of legalized online sports betting for the market in New York. The activity broke all records for that period, with billions of wagers and significant proceeds to the state and the operators who hold a license. While sports betting surpassed even the brightest predictions, online gambling may not see the light of day, at least this year.

On Tuesday, Gov. Kathy Hochul announced the state’s FY 2025 Budget. Surprisingly, the $233 billion budget did not mention online gambling, a move that may doom the legalization of the activity this year. Upon releasing the budget, the Governor explained: “This budget makes it clear that fiscal discipline can co-exist with progressive, people-driven policies.”

Moreover, Hochul said: “I am committed to fight the right fights on behalf of New Yorkers, and to pursue the common good with common sense – by seeking common ground.” Interestingly enough, iGaming didn’t get much traction during 2023 and it wasn’t included in the 2024 state budget as well.

Now, despite the predictions that the state can benefit from tax revenue by legalizing online gambling, the activity isn’t included in the recently released budget. Still, this doesn’t guarantee that iGaming won’t be up for debate or lawmakers won’t consider it.

Proposal Calls for the Legalization of iLottery, iGaming

The FY 2025 Budget was announced days after Sen. Joseph Addabbo, a supporter of the legalization of iGaming activities, officially filed an online gambling and lottery bill in New York. Continuing his efforts toward legalizing iGaming, the Senator introduced Senate Bill 8185. The proposal called for the legalization of online lottery and iGaming activities across the state.

Senate Bill 8185 follows another proposal introduced by Sen. Addabbo last year, S4856. Yet, a significant difference between the two bills is that the new one includes online lotteries. While S4856 never really lifted off, Senate Bill 8185 reaffirms the Senator’s dedication toward the legalization of the activity.

The proposal calls for the implementation of a 30.5% tax on gross gaming revenue, applicable to online gambling operators. This high tax rate reminds of online sports wagering in the state, which is subject to a 51% tax.

Not unexpectedly, under the new proposal, players need to be age 21 or older to engage in online gambling activities. To secure a license in the state, independent contractors would be subject to a $10 million one-time licensee fee. On the other hand, existing operators would pay a one-time $2 million fee to secure a license.

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A new study by Paysafe has revealed that consumers, although tightening their purses otherwise, are looking to continue spending on online sports wagers and in-game purchases.

This means that gaming companies that have digital exposure may not feel the pinch of an immediate economic downturn as online spending and experiences would continue to remain a preferred option for consumers.

There is also sufficient data to rebut doomsayers who expect inflation to bite into casino resorts’ purses may be blowing the issue out of proportion.

Consumers Prioritize Experiences and Stay-at-Home Entertainment

Streaming services and stay-at-home entertainment are beginning to gather momentum, Paysafe notes, considering the previous years that were marked by the onset of the COVID-19 pandemic, and the subsequent recovery from it.

Although gambling operators have turned mostly a profit, and many states around the United States have posted record-breaking revenue across sports gambling and online gambling, the land-based sector is still flagging. This though has enabled consumers to sustain their online spending habits driving sports betting up, and not all brick-and-mortar venues are affected equally.

Not all is bleak in the land-based sector, and Paysafe estimates that businesses which offer strong experiences over physical goods would do well. This is to say gaming companies should in theory perform better even in the land-based sector, as they create multi-tiered experiences that are not directly tied only to their gaming floors.

Land-Based Venues More Resilient Than the Economy Suggests

Places such as Las Vegas and Atlantic City are built around a 360-degree experience, which means that these brick-and-mortar properties are well-equipped to satisfy demand even if in-person entertainment’s prospects seem to be dimming on paper, edged sideways by home entertainment.

Some 51% of consumers prefer experiences, the report said. In other words, gaming may be a hook, but casino companies pull in a lot of revenue from lodging, food, and beverage, and not least the customary performances by world-known artists. When it comes to sports gambling, though, it is evident that consumers are not going to budge and would instead stick to their spending habits despite increasing costs of living.

The survey’s findings are reflected in the estimates of several analysts who have remained bullish on the stocks of popular gaming and entertainment companies, including Las Vegas Sands, MGM Resorts International, Caesars Entertainment, and Penn Entertainment.

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Bills are making their way through House committees and support for expanded gambling venues and sports betting in Texas is at an all-time high. However, Lt. Gov. Dan Patrick is the president of the Senate and he has no appetite for legalized gambling in the state – unless it is a Republican idea with broad GOP support in the Senate.

The Texas House State Affairs Committee recently approved two bills to be sent to the floor of the House for a vote, opening a path for them to be acted on by the Senate and potentially signed into law by the Governor. Governor Abbot has had a sort of fluid response to the issue of expanded gambling – once “wholeheartedly” opposed to it, then open to letting voters decide, and now seemingly leaning more toward sportsbetting but not too excited about casinos.

Charlie Geren (R-Fort Worth) saw his House Joint Resolution (HJR) 155 approved first and then Rep. John Kuempel’s (R-Seguin) saw his House Bill (HB) 2843 make it through the committee as supporting legislation. The companion bills would authorize destination casino resorts in limited numbers and at specific locations based on the population if Texas voters approve of the idea.

Bills Would Allow Voters to Decide

The bills lay out important frameworks for liberalized gambling in the state which is currently illegal and only allowed grudgingly on Native lands that the state has no control over. The legislation would simply allow voters in Texas to approve a constitutional amendment in November that would allow commercial gambling.

The current bills would allow for two casinos in the Dallas and Fort Worth area along with six others elsewhere in the state.

Some reports indicate that at least 75% of Texans favor being given the choice to decide for themselves. That doesn’t mean that three-quarters of all voting residents favor casino gambling or sports betting, only that they want to decide the issue for themselves.

Rep. Jeff Leach (R-Plano) got his mobile sports betting bill through the committee as well as a separate piece of legislation. This law would set a licensing fee of half a million dollars for mobile sportsbetting sites and levy a 10% tax on revenues.

In a March hearing on the Leach bill, the lawmaker said it would advance “freedom and liberty” in the state and empower tax collectors to make money for the state on an activity that already goes on anyway.

“There are hundreds of our constituents — citizens of all ages, including minors — who right now, especially with March Madness, are placing unsafe, <sic> unsecure, illegal, criminal bets very easily,” Leach said.

Multiple local media outlets reported earlier this week that Texas Lt. Governor Dan Patrick was making the rounds on state broadcasting networks to make the case against any gambling bills lawmakers might be entertaining. According to his own words, it’s not so much a matter of whether or not Texans want to choose, but which side of the aisle the bills originate from or at least who supports them.

Lt. Gov Claims There is No Support for Voter Choice in Senate

According to Texomashomepage.com, the Senate president took a swipe at the House efforts saying there was “zero support” for the idea in the Senate even though one of his top allies in the Senate, a Republican, is sponsoring Senate Joint Resolution 39 – a constitutional amendment to allow sports betting if voters were to approve it during the next election.

“Our members have been clear: they’re not in support today. We don’t have any votes in the Senate,” Patrick said. “Couldn’t find one Senator who supported it.”

Playing partisan hardball, Patrick reportedly said: “Unless I have 15 to 16 Republicans, meaning it’s a Republican-driven bill because we’re a Republican-driven state, I’m not bringing a bill to the floor,” he said. “I need Republican consensus otherwise, it’s a Democrat bill.”

The Lt. Governor’s political posturing has not slowed down the push to let the people decide and it hasn’t dampened the drive to get the business taken care of. The Texas Destination Resort Alliance issued a statement in support of the bills making it through committee.

Matt Hirsch, a spokesperson for the Alliance said: “The efforts to bring destination resorts to Texas made significant progress with today’s vote. Texans have made it clear that they want destination resorts in Texas, and we are now one step closer to ultimately allowing them to decide on this issue.”

Dallas Mavericks owner, Mark Cuban has indicated he’d be open to moving his team to a new home when his current long-term lease comes to an end. A casino resort in Dallas would be an ideal location for the NBA franchise.

There are two very small slots/bingo casinos in the state including Naskila Casino near Livingston. The largest casino is also a native operation near the Mexican border at Eagle’s Pass. Legislation has been written to protect Kickapoo Lucky Eagle Casino from too much competition all at once by authorizing the tribe to operate any type of game or gambling a commercial operation is allowed to offer.

It’s estimated that Texans leave over $5 billion a year in out-of-state casinos and tribal gambling venues. Millions of visitor trips a year are logged to Oklahoma and other neighboring states with more liberal gambling laws.

Source: Texas House State Affairs Committee passes two bills on resort casinos and mobile sportsbetting, G3 NewsWire, April 5, 2023

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