As New York Ponders Legalizing iGaming, Leaders Worry About Addiction

Studies indicate online casino games have greater addiction potential than sports betting
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Last week, while reporting from the SBC North America Summit in New Jersey, I noticed an icon pop into my DraftKings account that I hadn’t seen before.

It was a little ace-and-king graphic in the lower right-hand corner, and it represented an invitation to play a little blackjack. New Jersey, see, is one of six U.S. states that allow mobile operators to offer online table games and slots, commonly referred to in the industry as iGaming or iCasino. (For the purposes of this article, we’ll use the term “iGaming” to refer to mobile casino games.)

The next day, while perusing that day’s baseball action, I noticed the icon again. When you click it, it takes you directly to a digital blackjack table, prompting you to set your betting value and let the computer deal. During a midday lull, I sat down in a comfortable chair on the trade show floor and decided to give it a whirl.

Thirty minutes later, I had lost all the money I had so painstakingly accrued during four months of sports betting.

For a sports betting reporter, the experience drove home the trouble iGaming can get people into if they have a tendency toward compulsive behavior. It also brought into focus the issue New York leaders are wrestling with as they seek to expand mobile gambling in the Empire State.

Leaders pump the brakes over addiction concerns

As New Jersey has shown, the revenue New York could generate from iGaming is likely to dwarf the astronomical numbers mobile sports betting already has produced off the more than $8.8 billion in bets placed in a little over six months. But at what cost in terms of an uptick in problem gambling?

It’s at the heart of the discussion as pro-gaming state legislators finetune the next attempt at a bill to legalize iGaming in New York, a process that could begin as soon as in January.

“When I look at iGaming, I’m more cautious, because I think the population for iGaming is far greater than mobile sports gambling,” said state Sen. Joe Addabbo, one of the architects of New York’s mobile sports betting structure and the sponsor of the first Senate iGaming bill that failed to gain approval this year. “Given that larger population and given that New York is perceived as a gaming state now with the [Gov. Kathy] Hochul administration being open to these kinds of discussions, I just feel that we really now have to emphasize problem gaming, addiction, and having regular conversations with OASAS.”

In New York, OASAS stands for the Office of Addiction Services and Supports. Addabbo said part of his work in drafting new legislation to introduce iGaming next January to the 2023 executive budget will be to carefully craft the language on problem gambling. The launch of mobile sports betting brought with it 12 safeguards against problem gambling, including the monitoring of accounts, self-exclusion mechanisms, and the ability to freeze accounts in some cases.

Getting even stronger mechanisms in place to address online gambling problems is at the heart of the issue, Addabbo said. He is considering limiting the hours bettors can access online casino games, among other measures.

“I knew it wasn’t going forward much this year, but it basically put the issue out there. I would like to see New Yorkers interested in doing iGaming somewhere down the line and to get the language right,” Addabbo said. “Let us see what the pitfalls are, let us see what the industry feels New York would do.”

Massive tax potential of iGaming

Addabbo points out that many New Yorkers are playing online table games and slots illegally or are traveling to New Jersey or Pennsylvania, sending the taxes on any of their losses to those states rather than New York. In New Jersey, gross gaming revenue from online casino tends to be more than double what sports betting produces. In May of 2021, for example, sports betting brought $61.5 million to the New Jersey operators while iGaming netted them $136 million.

“It is a revenue generator. It is a generator for significant educational funds and for problem gambling and addiction funding as well,” Addabbo said.

A 2015 study conducted by the National Institutes of Health, which looked at European betting patterns (online betting wasn’t yet legal in the U.S.) cited surveys showing that 19%-28% of online gamblers find it easier to spend money online than in person, while 15% consider iGaming more addictive than land-based gambling. The 24/7 availability of action gives it additional potential to draw people in.

“Internet gambling differs from land-based gambling primarily in terms of its constant availability, easy access and ability to bet for uninterrupted periods in private, facilitated by the interactive and immersive Internet environment,” the study found.

While iGaming has the potential to bring new forms of action to New York bettors and to fill the coffers of the state government with new tax dollars, it also brings new worries — meaning the slow-and-steady approach to introducing it may be the way to go.

Photo: Shutterstock

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