Gov. Kathy Hochul knows New Yorkers have a problem.
Last week, her State of the State proposals included measures to “strengthen prevention, treatment, and harm reduction around problem gambling.”
These include forcing health insurers to cover addiction treatment and installing “gambling recovery services,” including jobs for “peer advocates,” in 16 community centers across the state.
It’s a tacit admission of the harms that have accompanied the state’s legalization of casinos in 2013 and sports betting in 2022.
Gambling addiction has spread nationwide — particularly among young men — and in New York, too.
As my colleague Charles Lehman notes, legalizing betting measurably worsens the harms of addiction.
One recent study found that once a state legalizes online sports betting, irresponsible gambling increases by 372%, and gambling helplines experience a 75% surge in calls.
Since 2020, calls to New York’s crisis support hotline have spiked 30.7%, to 3,064 in 2024.
In neighboring New Jersey, nearly one in five adults ages 18 to 24 is at high risk for problem gambling, and a third in that group gamble exclusively online, Rutgers University researchers found.
For many, the dopamine rush ends in depression, anxiety, crippling debt, and broken homes.
New York has vaulted to the top of the nation’s sports betting activity.
In 2024, New Yorkers placed $22.9 billion in mobile sports bets alone, generating $2.06 billion worth of gross gaming revenue and about $1 billion in net revenue to operators.
Sure, the state raked in $1 billion in taxes just from this sports-betting haul — but at what cost?
The money lost on bad bets is cash not spent on restaurants, concerts and other local entertainment.
Research has even shown that sports gamblers bet money they otherwise would invest or save — particularly those in poorer households.
For every dollar a sampled household bet, it put $2 fewer into investment accounts.
At least brick-and-mortar casinos can claim to create jobs and spur regional growth, and usually offer entertainment other than gambling.
The problem is, New York’s upstate casinos have been a bust.
In 2022, only one of the four met its projected local gaming tax revenue; the others generated less than 60% of what had been forecast.
The Resorts World Catskills Casino in Sullivan County, for example, has repeatedly underperformed expectations since it opened nearly eight years ago.
Its consistent losses led the county to step in this September to plan a high-yield municipal bond issuance of up to $585 million to acquire the struggling facility’s nongaming assets.
With the rise of online sports betting and new casinos planned for the city, upstate gambling halls face ever greater cannibalization.
Despite these downsides, the state is growing dependent on gaming taxes.
The recent deal to approve three Vegas-style casinos in New York City requires operators to pay the MTA $500 million apiece, which has already yielded $1 billion as upfront license fees.
As the Manhattan Institute’s Nicole Gelinas has long pointed out, casinos are no way to build a durable tax base or a prosperous local economy.
If casinos brought lasting affluence, Atlantic City would still be booming.
Today, even Las Vegas, America’s gambling mecca, is slumping, with tourism figures down to two-decade lows.
Doing business and earning profits are generally good. But not every dollar is created equal.
The most valuable businesses thrive when clustered together because one firm’s success doesn’t come at another’s expense.
That’s why the largest banks concentrate on Wall Street, white-shoe firms in Midtown, and tech giants in Silicon Valley.
They employ creative workers who produce goods and services that enable others to be more productive.
Imagine what the economy would look like without bank credit or digital services.
Artificial intelligence is transforming practically every industry — but no one can make the same claim about slot machines or long-shot sports bets.
High-wage tech, finance and professional services jobs can sustain a durable and growing tax base.
Casino jobs, by contrast, tend to be relatively low-paid service positions — which is one reason why local taxes and economic growth haven’t materialized in the way proponents had hoped.
Instead of legalizing sports betting and opening new casinos in Gotham, state leaders should have focused on making the city more attractive to innovative and growing industries.
But now, irresponsible gambling has become a big enough problem to warrant the governor’s new measures.
Many gamblers will never utilize Hochul’s programs — and many more will learn about them only after it’s too late.
With Albany hooked on gaming taxes, don’t expect New York to kick the habit anytime soon.
John Ketcham is director of cities and a legal policy fellow at the Manhattan Institute.
This story originally appeared on NYPost
