With various states racing to capitalize on gambling revenue, New York has adjusted its stance to align with this trend. However, when it comes to online casinos, it’s making slow progress compared to neighboring states.

It’s not across the board though as sports betting was legalized in 2019 and other online gambling platforms followed in 2021. The state has since taken in significant tax revenues as a result. Despite this, New York is still missing out on potentially billions more without online casinos, one of the chief reasons many locals are calling for regulatory reforms.

For now, the demand for faster gaming coupled with New York’s lack of legalized digital casino options has led to many players looking offshore for online casinos offering fast payouts. According to gambling expert Aneeca Younas, these platforms operate in a legal gray zone since state law doesn’t apply to them. They also offer a range of perks like discreet registrations, instant withdrawals, great bonuses, and a massive gaming library compared to traditional online casinos.

As with most states, New York has gaming compacts in place. These are with the state’s three main tribes, Seneca Nation of Indians, the Oneida Indian Nation, and the St Regis Mohawks, and the compacts effectively restricting other, non-tribal companies from providing casino gaming in New York.

However, pushing players toward playing in offshore casino sites is causing the state to forgo a huge amount of potential tax revenue and the economic growth a local iGaming sector could bring. This is evident in Pennsylvania, which serves as an excellent example of what can be achieved by legalizing online casinos. Pennsylvania’s gambling industry made over $2.54 billion in gambling tax revenue, a figure boosted massively by the state’s progressive iGaming laws​.

However, for New York, what the state currently lacks in iGaming, it makes up for with sports betting. We saw this in August when the state’s sports betting handle grew by 28.8% from last year, reaching a staggering total of $1.44 billion. These figures have resulted in New York becoming the largest sports betting market in the US in next to no time.

Yet, even with these impressive figures, the state’s total gambling tax revenue still falls short of Pennsylvania’s. In August, we saw this with PA recording over $215 million in taxes, whereas New York made just over $61 million.

This is even while the state imposes the joint highest tax rate on sports betting, currently at 51%, to make up for what it’s losing by not legalizing online casinos. However, experts have suggested that should the state embrace online casinos, it would likely surpass Pennsylvania’s numbers within its first year of legal iGaming.

When it comes to physical casinos, these are allowed in New York, with such establishments playing important roles in its gambling economy. However, all the stats from other states that offer legal iGaming point to New York sitting on a potential goldmine of tax revenue should it finally legalize online casinos.

Many local gambling enthusiasts hope that the success sports betting has enjoyed will inspire lawmakers to fast-track this process. However, the state’s slow legislative processes, quagmire of competing interests, and bureaucratic processes don’t seem likely to budge on the issue anytime soon.