How The MTA Could’ve Received More Money Faster From The Governor’s Executive Budget

With the New York State fiscal year 2024 budget now set in stone, the Metropolitan Transportation Authority (MTA) will receive desperately needed money from the three downstate casino licenses. But there’s an alternate route lawmakers could have taken to secure more money faster for the MTA.

The steep decline in MTA ridership since the COVID-19 pandemic serves as the biggest reason for its funding needs. If not for Gov. Kathy Hochul’s executive budget rescue package, danger loomed for subway, bus and commuter railroad services.

But that won’t be necessary thanks to the three available New York casino licenses currently up for grabs.

That said, an alternative solution could have produced even more funding for the MTA.

Downstate casino licensing to bail out the MTA

There’s no timetable in place for when the three winning downstate casino bids will be declared by the New York State Gaming Commission (NYSGC). But once that happens, the groups backing the successful proposals will pay $500 million in licensing fees.

All $1.5 billion paid to the NYSGC will go toward helping revive the MTA. Additionally, a share of an estimated $231 million to $413 million in incremental tax revenue will also be steered to the MTA.

There’s only one issue: That funding won’t come until 2026. The NYSGC has a significant decision to make regarding which casino proposals will get licensing, and the process is certain to be long and drawn out.

NY online casinos offer more funding sooner

Left out of the state’s FY2024 budget was online casino legalization. Had it been included, New Yorkers still wouldn’t have been able to access the game type until next year. But it still followed a quicker timeline than what the downstate casino licenses offer.

Plus, the NY gaming industry directs much of its tax revenue to fund public education. In a past interview with playin-ny, before the state budget was finalized, Sen. Joe Addabbo showed his displeasure with moving gaming money away from education in favor of the MTA.

“Every year the gaming industry gives about $4 billion to education,” Addabbo said. “I can’t go back to my district and say, ‘We took money out of education to give to the MTA through downstate licenses.’ That’s a hard sell. I don’t feel comfortable doing it.”

Online casinos also provide an entirely new form of revenue that wouldn’t call for money to be taken from education.

“We can give (Gov. Hochul) more significant money in a quicker timeframe than 2026, and it’s unspoken for money because it’s a new product, and that’s iGaming,” Addabbo said. “So we’re not shifting it from education. In the bill it says education, but it’s a placeholder. This is new revenues. So you want to use it for healthcare, you want to use it for social services, you want to use part of it for the MTA? Here it is.”

Online casinos could become NY’s largest gaming revenue stream

Legal sportsbooks in New York have raked in tons of tax revenue for the Empire State. Since launching in January 2022, the state has collected over $1 billion.

But when online casinos eventually receive passage, they’ll produce even more money than mobile sports betting.

At a Senate Standing Committee on Racing, Gaming and Wagering meeting earlier this year, Light & Wonder global head of affairs Howard Glaser projected that in year one, NY online casinos would bring in $425 million in tax revenue. By year five, Glaser sees that number skyrocketing to $720 million annually.

“The states with iGaming,” Glaser said, “have found that sports betting is the appetizer but iGaming is the main course, as far as revenue generation is concerned.”

At the same committee hearing, Addabbo said New York loses “roughly $4 billion” each year online casinos go unregulated. Some of that money goes to neighboring states that offer it, and some goes to illegal offshore sportsbooks.