New York’s Gambling Scene: How State Laws Shape the Possibility of Legal Online Casinos

As we speak, seven states currently support real money online casinos, with Rhode Island becoming the seventh and final state to do so earlier this year. However, with 2024 almost in the books, the prospect of New York legalizing online casinos continues to be the top topic of attention for sports and other gambling news. With so much promise to finally break through the logjam, this article takes a look at New York’s current gambling laws that helped shape the argument for the Empire State to finally legalize online casinos.

Even with a sprawling casino scene in the New York metropolitan area, it’s hard to believe that gambling was frowned upon in the Big Apple and the rest of the state at one point. Before the 19th century, most gambling in New York was kept underground and controlled by criminal syndicates like the Mafia and the Irish Mob.

Horse racing, however, helped break the gambling ice in New York State. By 1863, horse racing was legal in the Big Apple and throughout the state, with Saratoga Race Course, one of the oldest in the country, still accepting bets on horse races in upstate New York.

However, by the late 1960s, the climate toward gambling began to change with the introduction of the state lottery. Like other states, New York turned to its activated lottery system to help build revenues in 1967. New York is one of the largest mega-lottery states with a long history of producing millionaire winners. With this milestone, the public perception of organized gambling finally began to change.

With so much positive momentum behind New York’s lottery system and the rise of Atlantic City’s casinos, it was finally time to bring land-based casinos to New York State. After the Indian Gaming Regulatory Act was signed into law in 1988, many First Nation communities now had the legal right and ability to build casinos on their reservations and sovereign lands.

In 1993, the Oneida First Nation opened the first land-based casino in Verona, New York. With this roaring success, it wasn’t long before other nations such as the Seneca opened more First Nation casinos throughout New York.

With the rise of First Nation land-based casinos, gambling fever in New York reached new heights with the legalization and approval of Racinos throughout the state. In the early 2000s, legal horse racing tracks expanded to accept lottery tickets and eventually other soft forms of gambling.

In many ways, New York was forced to act by the rapid rise of legal real money online casinos in New Jersey and Delaware. In 2012, Delaware shocked the world by becoming the first state to legalize online casinos, and in 2013, New Jersey followed suit. With New Jersey setting records for iGaming, New York finally approved commercial casinos throughout the state, including the New York metropolitan area.

In 2013, in direct response to the legalization of online casinos in New Jersey, New York residents overwhelmingly approved the introduction of commercial casinos. By bringing brand names like Caesars Entertainment and MGM to more populated areas like New York City and Rochester, the New York casino industry took off and the first seeds of online casinos in The Empire State began to form.

Of course, the fierce anti-gambling advocates became more vocal during this time. Even with the huge success of elite land-based casinos like Rivers Casino and Resorts and Resorts World in the Catskills, there are still plenty of other top-tier casino projects, particularly in Manhattan, that have yet to get off the ground due to fierce local backlash.

While proponents of land-based casinos in New York rely on casinos to create large jobs that will stimulate the economy, including in the construction industry that has struggled in recent years, to build and launch more casinos in the Big Apple, fierce critics cite rising crime, human trafficking and gambling addiction as major reasons not to build them.

The sheer cost of building land-based casinos also provides another hotbed for anti-gambling advocates who would rather see those public funds used to repair public infrastructure and public education. To counter this argument, advocates and casino developers sweeten the pot by funding these public essentials to rally the public behind casino development.

Keeping pace with New Jersey and Delaware, which quickly legalized sports betting after the U.S. Supreme Court struck down the PAPSA ban, New York voted overwhelmingly to legalize sports betting. As of 2019, New York had allowed four casinos to accept in-person sports bets. However, the caveat is that sports bettors cannot bet on local college or professional teams.

When New York allowed online sports betting in 2021, senators like Joe Addabbo drafted legislation to legalize it. New York online casinosAfter the first bill failed to gain support, Senator Addabbo introduced an improved bill in early 2024 that would allow up to 20 online casino operators to operate, including on mobile apps.

Also included in these bills was an outline of how much of the online gambling tax revenue would be spent on funding public projects like education and critical infrastructure. There was even language in the bills to allow New York’s existing land-based casinos to operate online. Worried by anti-gambling advocates, Senator Addabbo’s bills also included responsible gambling measures to help overcome resistance.

The New York State Legislature was expected to hold a special session in the summer of 2024 on legalizing online casinos in New York to make up for the shortfall in combustion tax revenue. The combustion tax has been hit by setbacks, which would have required New Yorkers to pay taxes on the number of miles they drive. There is still hope that online casinos in New York could finally become a reality in 2024.

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