New York Lawmakers Again Will Consider Online Casino Legalization in 2026
With two major steps occurring in New York State gambling news in December 2025 - the issuance of three New York City area casino licenses for $500 million apiece and the legislative banning of sweepstakes casino games - the time finally could be ripe for the Empire State to take a closer look at iGaming legalization this year.
At least, that's the hope of New York State Sen. Joseph Addabbo Jr., chairman of the Senate's Racing, Gaming, and Wagering Committee and the chief advocate in the Albany statehouse for passage of such a bill for the past several years.
"The state is now better positioned to hold serious discussions about regulating and potentially legalizing iGaming in the near future, possibly as part of the upcoming budget process," Addabbo said in a Dec. 8, 2025 statement. "My priority is to ensure safety; prevent problem gambling; generate much needed significant revenue; and keep New York competitive with surrounding states."
In the dozen years since regulators in neighboring New Jersey launched online casino gaming, annual tax revenues there have continued to grow substantially. In 2018, the state Treasury collected $44.9 million from a 15% tax on online casino operator gross revenues.
Two years later, that figure ballooned to $145.8 million - in large part because the COVID-19 pandemic closed Atlantic City casinos for several months and lured many of the state's gamblers into trying out the alternative of casino gambling online.
In 2022, even with all nine casinos reopened all year, the state's tax revenue from online casino gaming grew to $249.4 million. In 2024, the number was $358.3 million - and the year 2025 produced more than $500 million in online gaming tax revenue, thanks in part due to a mid-year boost in the tax rate from 15% to 19.75%.
How much annual tax revenue could iGaming produce in New York?
New York State has just over double the population of New Jersey, so even a simple doubling of the New Jersey annual tax revenue collection from iGaming leads to an initial $1 billion projection.
However, the information gained from New Jersey's gambling tax history suggests that there will be a "learning curve," as New York state residents gradually come to understand that they can play casino games online at a number of legal, authorized websites.
That could mean that the $1 billion figure might take up five years to come to fruition. However, Addabbo has proposed a tax rate from iGaming operator revenue of 30.5%. That is double the rate of what New Jersey online casino operators paid from 2013 until mid-2025, and the proposed New York rate would still be 1 1/2 times what many of the same operators will turn over to New Jersey in the years ahead.
Since various analyses of the gambling habits of Americans have demonstrated that residents of both New York and New Jersey gamble at a higher rate per capita than virtually all other states, that means that comparing the two states makes sense.
Based on all of this information, it seems reasonable to project that New York State would add well over $1 billion annually in iGaming taxes within just a few years of operations.
Why the reluctance of New York lawmakers to add iGaming?
The numbers look particularly enticing for a state that is projected to have a structural deficit of at least $10 billion annually over the next few years. If severe budget cuts are not on the table, then state lawmakers will need to look into tax increases.
The latter such changes tend to be wildly unpopular with voters, of course. But iGaming legalization would in effect be a "voluntary tax," in the sense that operators' profits that translate to new tax revenue would only be earned from those residents who elect to participate in that leisure activity.
That said, New Jersey's great financial success with iGaming since 2013 has not led to the sort of "Me, too" stampede that occurred in 2018 when the U.S. Supreme Court sided with New Jersey in voiding Nevada's virtual monopoly on sports betting.
Entering 2026, there are 39 U.S. states with legal, regulated sports betting - yet only seven have legal online casino gaming (plus Nevada, which only offers online poker).
Why the disconnect?
Lawmakers across the country have expressed concerns that ubiquitous legal iGaming could led to an epidemic of compulsive gamblers in their states.
In New York, Assemblywoman Carrie Woerner - chair of the state Assembly Racing and Wagering Committee - correctly predicted early in 2025 that iGaming legalization would not move forward. Woerner did promise to "take a hard look at" passage of an online casino bill in 2025, but so far there are no indications that the result will be any different in 2026.
Addabbo has attempted to counter the skepticism on two fronts. First, by supporting changes to dramatically increase the amount of resources by the state to try to help problem gamblers not descend into ruinous financial situations, and second, by growing an awareness in the legislature about how widespread illegal online casino gambling by New Yorkers already is taking place anyway.
Online casino legalization in NY only has a limited number of days to pass
The 2026 New York State legislative session began on Jan. 7 and runs until June 4 - but that five-month calendar does not leave a lot of room for all pending issues to be addressed.
That's because lawmakers only are scheduled to meet on 61 of those session days - with the first of the state's 10 four-day week sessions not occurring until late February.
The November 2025 election of New York City Mayor Zohran Mamdani - who ran on a very ambitious platform seeking massive changes in how the city is run - likely will mean, because the state's financial situation is so intertwined with the city's, that most of the focus by the legislature in the first few months of 2026 will be with Mahmdani's agenda at the forefront of discussions.
The best hope for Addabbo and other iGaming legalization supporters, then, would be to try to establish a link between new tax revenue that Mamdani would need to accomplish his agenda and the massive funds that could be added from having New York join New Jersey, Pennsylvania, and Michigan as iGaming states that bring in a large amount of new tax money for their states.
Read More
