NY Online Gambling – 2017 Online Poker News and Updates for New York

The Empire State has a multi-year history of legalization efforts for online poker, and that winding journey may finally be culminating in success in 2017. The key lawmakers that have been the driving forces of legislative efforts that date back to 2014 have been Senator John Bonacic and Assemblyman Gary Pretlow, and accordingly, it is the former’s S3898 that is currently making serious inroads once again.

2013: Online Poker First Broached

Before focusing on current progress, a broad view of the totality of the efforts to legalize and regulate online poker in New York since 2013 is in order. Discussions about the issue were initiated in March 2013, when legalized online poker was included by the Senate in the initial version of the state budget ahead of the forthcoming fiscal year. However, that was more or less a Hail Mary attempt to almost reverse engineer a legalization bill that at that point in time did not yet exist. Predictably, the proposal did not gain enough support, but did serve its primary and most realistic purpose, which was to begin to lay the groundwork for future dialogue and official legislative proposals.

2014: Initial Proposed Legislation Introduced

The latter first came to fruition in 2014, with the introduction of S6913 by Senator Bonacic in March of that year. The bill set forth the following provisions:

It allowed for online poker exclusively, with both cash and tournament play allowed.
The bill authorized 10 online poker licenses that were valid for a 10-year period and carried a license fee of $10 million. The tax rate for operators was set at 15 percent of gross gaming revenue.
The bill included a so-called “Bad Actor Clause” to bar operators that had continued to take any wagers – including poker – from U.S.-based players after the Unlawful Internet Gambling Enforcement Act of 2006 from applying for a license.

Two other notable aspects of S6913 were that it enabled New York to enter into liquidity-sharing agreements with other states, and that it labeled poker as a contest of skill as opposed to chance.

Later that spring, Assemblyman Gary Pretlow, the chairman of the Assembly Committee on Racing and Wagering, presented lawmakers with what was essentially an Assembly replica of S6913, bill A09509. Both Bonacic’s and Pretlow’s bills also included clauses that required operators to “to take steps to protect consumers, combat compulsive gaming, and prevent minors from accessing online gaming sites.”

While both pieces of proposed legislation represented major steps forward in the sense that they pioneered tangible efforts to eventually legalize online poker in the state, neither moved the needle, stalling early on in both chambers.

2015: New Proposals, Same Stagnation

In 2015, Bonacic revived his online poker legalization efforts with the introduction of S5302, while Pretlow introduced the companion A09049 in the Assembly. The bills once again called for certain interactive poker games to be considered games of skill as opposed to chance. While the provisions in the respective pieces of proposed legislation largely mirrored the ones introduced the previous year, the one main difference was the removal of the aforementioned “Bad Actor” clause.

As was the case in 2014, neither bill gained enough traction to even pass through a committee in either chamber.

2016: A Notable Breakthrough

Undeterred, Bonacic introduced the next iteration of the bill, S5302B, in early 2016. S5302B once again set forth a regulatory scheme for online poker in the state and made it explicitly legal. It included the same provisions as the previous year’s proposed legislation, including:

  • Defines poker as a game of skill, not a game of chance, under state gaming law.
  • Authorizes basic variants of poker (including Omaha and Texas Hold ‘Em) while allowing the gaming commission to determine whether other versions are allowed.
  • Allows up to 10 licenses to operate online poker sites.
  • The license fee is $10 million, and is good for 10 years.
  • The tax rate is 15% of gross gaming revenue.
  • Entering into an agreement to share liquidity with other states — like the compact between Nevada and Delaware — is allowed.
  • The gaming commission is put in charge of consumer protection standards regarding age, geolocation, segregation of player funds, etc.

The bill gained some early momentum — including passing the full Senate by a 53-5 vote as S5302D and seeing its language receive inclusion in the state’s proposed budget plan for that fiscal year — before the issue of legalizing daily fantasy sports (DFS) in a stand-alone measure took precedence. Considerably aggressive lobbying by those representing the DFS industry, as well as a looming deadline between major DFS operators FanDuel and DraftKings and New York Attorney General Eric Schneiderman related to the latter’s litigation against the sites, pushed DFS squarely into the spotlight and up the priority list of both chambers. Ultimately, this conspired to leave online poker legalization on the outs in the 2016 legislative session.

Notably, in his chamber, Pretlow had also declared his companion bill, A9049B to be “dead” for that session on the same date that S5320D had passed the Senate. At the time, the Assemblyman declared that he had some concerns with the defining poker as a “game of skill,” an integral component of any online poker bill since legislative expansion of games of chance are prohibited by the state constitution.

2017: Light at the End of the Tunnel

Bonacic’s “never say die” approach to legalizing online poker could finally pay dividends this year. Matters are progressing at a brisk clip with the aforementioned S3898, which has already passed the Senate Racing, Wagering and Gaming Committee by unanimous vote. With New York facing a potential $3.5 billion budget deficit – which operator licensing fees and taxes on revenue could potentially alleviate — and the urgency to get DFS legislation passed no longer occupying lawmakers’ attention, Bonacic has expressed strong optimism that this could be the session that online poker finally becomes a reality in New York state.

S3898’s next stop is the Senate Finance Committee. If it obtains sufficient support, which is expected based on last year’s developments, it will once again will head to the full Senate for a vote.

As in years past, Pretlow has introduced an identical companion bill, A5250, in the Assembly.

As with previous proposals, the bill names the New York State Gaming Commission as the in-state regulatory body that will monitor the interactive provision of poker games. It also ups the number of available licenses to 11, as compared to 10 in previous bills. The fee of $10 million to obtain a ten-year license remains a part of S3898.

Dogged Persistence Potentially Paying Off

If S3898 does finally reach the finish line, it will certainly be in no small part due to Senator Bonacic’s unrelenting persistence on the issue. A detailed review of the history of online poker legalization efforts reveals the incremental progress that lobbying efforts and those of Bonacic and Pretlow have made in convincing lawmakers of the benefits of a regulated online poker industry: providing New York residents with a leisure activity that carries appropriate consumer protections, while also bringing some much-needed revenue into the state’s coffers.