Online casinos back on the agenda in New York

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2025/06/13: New York Senate passes online sweepstakes casino ban 2025/01/24: New York senator introduces third online casino bill in three years 2025/06/09: New York Attorney General halts 26 sweepstakes operations in the state 2025/05/15: Lori Kalani outlines ambitious responsible gambling agenda for DraftKings and beyond

The Backstory

Why the online casino push returned

New York’s latest effort to legalize internet casino gambling sits atop years of incremental moves and stalled tries. State Sen. Joseph Addabbo Jr. has now filed his third online casino bill in as many years, a proposal that would authorize slots, table games, poker and live dealer products under a 30.5% tax on gross gaming revenue. The renewed campaign, detailed in our coverage of how the senator introduced a third online casino bill, is designed to tether licenses to existing operators — commercial and tribal casinos, video lottery terminal venues and mobile sportsbooks — and to expand the lottery to online tickets. Addabbo’s measure, Senate bill S2614, mirrors earlier frameworks that projected as much as $1.5 billion a year in tax revenue once the market matures.

The Assembly is again part of the equation, this time with a companion approach akin to Assembly bill A6027. The strategy signals a coordinated bid to move an igaming package after two prior sessions ended without a floor vote. While New York opened one of the nation’s largest mobile sports betting markets at a 51% tax rate, legislative backers now argue an online casino launch at 30.5% would capture dollars escaping to offshore or gray-market sites, while still producing a substantial and steadier tax stream.

The broader architecture reflects lessons from earlier debates: tighter eligibility, high license fees for platforms and operators, and earmarks for addiction services and economic development. The politics remain delicate. Labor groups and some local officials have warned about cannibalization of on-site casino jobs. The bill’s supporters counter that a legal channel is the only practical way to police activity already happening online.

The sweepstakes crackdown changed the stakes

Momentum for a regulated market accelerated as Albany moved to shut down social casino sites that operate outside the state’s licensing system. In June, the Senate voted 57-2 to pass a ban on dual-currency sweepstakes casinos, as reported in our story on how the Senate approved the sweepstakes ban. That bill, S5935A, would levy fines of $10,000 to $100,000 on operators and direct proceeds to problem gambling programs. The House companion has remained in committee, underscoring an uneven appetite for near-term enforcement, but the upper chamber’s vote put illegal and quasi-legal platforms in the crosshairs.

Attorney General Letitia James added legal muscle, announcing cease-and-desist letters to 26 online sweepstakes casinos that allow players to buy virtual coins for a chance at cash prizes. Our report on how the attorney general halted 26 sweepstakes operations captured the state’s view that these sites are unlicensed gambling under New York law. The attorney general’s office framed the action as a consumer protection case — with risks of fraud, unpaid winnings and addiction — and as part of a broader public-health agenda. Her formal statement is posted by the state at the attorney general’s press page.

The twin track — enforcement against sweepstakes and legislation for a regulated market — has shaped the current push. Addabbo, who is also the sponsor of the sweepstakes ban, has argued that until real-money igaming is legal, unchecked gray-market growth will continue to target minors and people with gambling problems. Senate leaders cemented that posture by advancing S5935A on the floor, as reflected in the June 11 session agenda posted to the Senate calendar.

Budget math and policy trade-offs

Fiscal questions are central. Backers tout the 30.5% tax and license fees as a durable revenue source that can diversify the state’s gambling take beyond the seasonal swings of sports betting. The 2024 attempt, S8185, used the same rate. Analysts cited by lawmakers have said igaming could yield around $1.5 billion a year after ramp-up, according to our earlier piece on the third Addabbo bill. The current proposal also carves out funds for responsible gambling programs, worker training and health initiatives, aiming to blunt criticism that online expansion would heighten social costs.

But the governor has been cautious. Gov. Kathy Hochul did not include igaming in the 2026 executive budget, a signal that any legalization will likely have to move as standalone policy rather than as a revenue plug. Without executive sponsorship, legislative leaders must assemble votes while addressing labor’s concern that digital play could siphon visits from physical casinos, video lottery terminal facilities and their unionized workforces.

Proponents counter that online casino legalization can be structured to protect retail venues by limiting skins, channeling marketing, and investing in on-site expansions and jobs. They also argue that regulated online products can displace illegal operators that pay no taxes and offer no consumer safeguards. That balance — revenue versus potential cannibalization — is the crux of negotiations now underway.

Responsible gambling is now a competitive battleground

Industry positioning has shifted, with operators emphasizing harm minimization and shared guardrails. DraftKings Chief Responsible Gaming Officer Lori Kalani outlined a company-wide push to normalize safer gambling tools and expand data-driven interventions. In our report on how Kalani is pushing an ambitious responsible gaming agenda, she described work on features like a “My Stat Sheet” usage dashboard and a cross-operator self-exclusion database via the Responsible Online Gaming Association. Her message to policymakers is direct: enforcement against illegal sites must run alongside operator standards to make any regulatory regime effective.

That pitch dovetails with the state’s recent enforcement stance and with lawmakers’ aim to earmark new funding for treatment and education. It also anticipates the scrutiny any New York igaming market will face, given the scale of the player base and the state’s history of setting high bars for compliance and taxes in mobile sports betting. How convincingly operators can demonstrate prevention, intervention and data sharing may influence whether on-the-fence lawmakers swing behind legalization.

Regional moves add urgency

New Jersey is moving to tighten its own online ecosystem by targeting sweepstakes casinos. Lawmakers advanced a bill, A5447, to ban social casinos that use virtual coins for cash prizes and to give state agencies clearer enforcement power. Our coverage of how New Jersey came closer to banning sweepstakes casinos noted that officials there cast the model as an end run around licensing, regulation and taxation. Connecticut has eyed similar action, while Florida recently balked. The regional divergence matters to New York’s calculus: stricter rules in neighboring states could push gray-market operators toward softer targets, and a legal New York igaming market could blunt that migration by pulling play into regulated channels.

What happens next in Albany will hinge on two tracks: whether the Assembly moves the sweepstakes ban to the floor, and whether leadership decides to advance online casino legalization before the next budget cycle. The bills are written to operate in tandem — squeezing the illegal market while standing up a licensed one — but they can also move separately. For now, the enforcement drumbeat, the industry’s responsible gambling posture and pressure from neighboring states are all shaping a debate New York has tried to settle for three years running.