When Will New York Legalize and Regulate Online Gambling?
Here’s online gambling in a nutshell: it has the potential to bring a great deal of tax revenue into a state’s coffers, but it must attempt an end run around archaic morality laws as well as modern, resource-rich casinos that don’t want gamblers to have access to internet gaming.
The Feds have left it up to each state to determine how each will handle the legality of online gambling and sports betting.
When will New York legalize online gambling? Let’s take a look.
The Impact of New York’s Physical Location
As to New York in particular, the fact that next door neighbor New Jersey offers sports betting and is a clear draw for New Yorkers to drive across state lines to place bets has put pressure on the current government to continue to justify its anti-online gaming stance.
According to the Wall Street Journal, bettors in New Jersey who went online to place a sports wager are introducing themselves to other online games such as blackjack and even roulette. These “virtual games” have netted nearly half a billion dollars for Atlantic City casinos.
A half a billion dollars of missed revenue is going to be a topic of conversation in political circles until legislation is passed to allow the state to benefit or else the denial of such legislation is strongly justified and supported by the public.
With New York State suffering from a multi-billion-dollar budget “gap” as it struggles to pay public education expenses and ever-growing Medicaid costs, as well as many other publicly-funded programs, turning down such a viable income stream is going to be harder and harder to justify with each passing year as this state lags behind its neighbors on gaming legislation.
Governor Cuomo’s Stance on Online Gambling in NY
New York’s Governor Cuomo has made no bones about being against online gambling in New York. His argument is that he is trying to help upstate New York casinos maintain market share.
As such, sports betting is now legal at those five upstate New York casinos. That’s the only place in New York expressly authorized to receive sports bets.
Unfortunately for most New Yorkers, they don’t have access to the upstate casinos on any regular basis, if at all. Thus, stepping into an actual casino to engage in the legal New York activity of placing a bet is prohibited them in actuality, if not by law.
Therefore, many New Yorkers go to New Jersey or gamble online at one of the many offshore online casinos that take bets from citizens of every state in the Union.
So far, Cuomo remains unmoved.
However, as online gambling grows into an undeniable force, the governor’s protective stance over New York’s casinos may do nothing but forestall the inevitable.
What Does the Law Say?
New York Penal Code §225.00 states that bookmaking and promoting gambling is illegal, but it makes no reference to the individual gambler and no reference to internet or online gaming.
A group of men who had been taking millions in bets and using them to bet offshore was arrested in late December, according to the Brooklyn District Attorney’s Office. However, it’s important to note that these men were not individual gamblers or bettors, but cogs in a gambling organization.
According to a LegalZoom article, it’s important to remember to only place online wagers with a non-US company. (This is because Federal Law—The Interstate Wire Act of 1961—states that no US bank or financial institution may accept wager payments. The law does not concern the gambler, just the money holder. Thus, companies outside of the US must be used to accept and disburse payments.)
The same article also states that there is “little chance of prosecution” for online gambling.
However, people want more confidence than just “little chance of prosecution,” and so we await the day that New York and other states explicitly allow for online gaming.
A Proponent of Online Gambling in NY
One vocal New York state senator, Joseph Addabbo Jr., is a strong proponent of legalizing online wagering. He points to the increased tax revenue available to the state—increased revenue that neighboring state New Jersey enjoys and that New York is missing out on.
Senator Addabbo points out that the New York budget is in deficit mode, and gambling revenue could quickly help to balance the books.
Senator Addabbo is chairman of a committee on racing, gaming, and wagering, and thus holds some sway when gaming legislation is voted upon by the state Senate.
Senator Addabbo’s focus is on sports betting, since he acknowledges that many New Yorkers drive to New Jersey to place sports bets, robbing New York of the chance to rectify its budget deficit.
The Committee on Racing, Gaming and Wagering is set to propose a bill, S17D, that “Provides for regulation of sports betting and mobile sports wagering…”
It seems reasonable to surmise that any bill that addresses mobile sports wagering will have some impact on online gambling in its entirety, at least as gateway legislation, if it doesn’t address the issue specifically.
Bill S17D should be heard in the first half of 2020.
Stay tuned for development in relation to NY gambling laws.
So, Can New Yorkers Gamble Online?
According to Senator Addabbo, millions of New Yorkers already gamble, online and elsewhere, regardless of what is in the law books.
Although not explicitly legalized, we have found no evidence that any gambler in New York has been penalized for gambling online. We are not referring to bookmakers and operators of gambling rings, but to individual bettors.
There are powerful New York voices both in favor of and against allowing online gambling.
However, given the building momentum of online wagering and the need for states to keep tax revenue at home, in addition to states’ desire to regulate gambling activity, we sense that there will be positive movement in New York toward explicitly legalizing online gambling, including online sports wagering.