Another major sweeps casino site leaving New York could help usher in more changes to one of the nation’s largest gaming markets.
- Chumba and Luckyland Slots' parent VGW is pulling out of New York amid increased scrutiny of sweeps casinos.
- New York may legalize real-money online casinos, but political and industry opposition remains strong.
- Downstate New York’s casino bids will impact future online casino legislation and license distribution.
VGW, parent company of high-profile sweeps casinos Chumba and Luckyland Slots, announced this week it would leave New York. The move comes amid increasing crack downs on sweepstakes casinos – and could indicate a massive shift in the state’s online gaming market overall.
New York has introduced several bills that would ban sites such as Chumba. Though they are still in the initial stages of the legislative process, these games are drawing increasing scrutiny in Albany and across the nation.
Instead of real money online slots or table games, sweeps casinos such as Chumba allow players to play for digital coins that have no direct monetary value. Players can also separately use real money to purchase sweeps coins, which in turn award players prizes.
Critics of these games consider them illegal digital gambling. Montana became the first state to ban these games earlier this month, with several others considering similar legislation.
By departing the state voluntarily, Chumba could better position itself for a legal iGaming license if New York takes the even more difficult political step of legalizing real-money online games.
Passing such a bill still faces long odds. None of the seven states with legal iGaming have allowed formerly unlicensed sweeps operators to pursue a real-money iCasino license.
Still, the potential for New York real money online gaming is tantalizing. And there are indicators what could be the nation’s highest-grossing iGaming market could become a reality.
New York online casino gaming future
New York is far and away the country’s most lucrative competitive online sports betting market, taking in more than $60 billion in legal mobile bets since 2022 and generating more than one third of all sportsbook tax dollars nationwide. Online casinos would be far more lucrative.
Digital slots and table games operate all day, every day while appealing to a broader audience than sportsbooks and generating higher profit margins for operators. Major online gaming operators agreed to a nation-leading 51% gross gaming revenue tax on sports betting, in part, over hopes it would position them for iCasino licenses.
Despite legislative pushes in recent legislative sessions, these bills have gained little traction. Online casino gaming opponents worry these games will “put a slot machine in every pocket,” spurring gambling addiction worries and other societal ills. Some brick-and-mortar casino operators have also pushed back against digital gaming, fearing it will hurt existing jobs at these facilities.
But proponents remain confident that iGaming legislation could pass, potentially as early as next year. Lawmakers have awaited online gaming moves in part because they don’t yet know the makeup of the state’s brick-and-mortar casinos.
Downstate New York casino bids capture industry
There are roughly 1,000 brick-and-mortar casinos in America. None have drawn attention like the three up for bid in Downstate New York.
America’s most populated region is expected to be awarded three casino licenses from state officials by year’s end. MGM’s Empire State Casino in Yonkers and Resorts World in Queens, which offer slots but no live dealers, are favorites to win two of the bids. Nearly every major gaming company had expressed interest in the third.
Caesars, Hard Rock, Wynn, and Las Vegas Sands are among the companies that have filed bids for a casino in or around New York City. That list of roughly a dozen suitors has narrowed down as economic and political realities have made some of the bids unrealistic.
That includes Wynn’s bid for a casino near the High Line in Manhattan and Sands’ bid for a casino in Queens. Along with local political opposition, Sands said it was withdrawing its bid in part over fears New York legal iGaming could hurt the casino’s revenues.
Wynn today released the latest video animation rendering of its proposed Hudson Yards New York City casino project; this is one of roughly a dozen proposals for a NYC downstate casino license; the project faces opposition from local leaders
— Ryan Butler (@ButlerBets) August 28, 2024
(video via Related Companies & Wynn) pic.twitter.com/7egBhnfmT5
The new casino will add a powerful local and national player to the U.S. gambling scene – Resorts World, despite its comparative lack of gaming offerings, is the nation’s most profitable casino, ahead of every casino in gaming centers including Las Vegas and Atlantic City.
This new brick-and-mortar casino will also shape the state’s online gaming future.
Should lawmakers generate enough support for legal online casinos, questions remain about license allocation. The nine licensed mobile sportsbooks would surely push for a model that grants them exclusivity. Brick-and-mortar stakeholders, which includes the three downstate casinos and several upstate commercial and tribal properties, will likely push for the same.
And major sweeps and social casinos will also seek market access, though it may prove even more politically difficult.
Still, the move by a major sweeps operator to leave a state with 20 million people could come as a precursor to much more significant moves both in-person and online.
