New York Online Poker Bill in Budget Proposals

New YorkNew York could be the next US state to regulate online poker if a Senate resolution remains unchanged in the Empire State´s budget proposals.

Just when you thought there was no prospect of any state regulating online poker in 2016, a resolution has been included in New York´s 2016/17 budget proposals that advances the language to authorize and regulate online poker.

Although advancing the language does not imply the passage of legislation will happen any time soon, it is certainly a step forward compared to the ongoing infighting between stakeholders taking place in California and the dust gathering on Pennsylvania´s online gambling bill.

The timing of the resolution is also significant. It comes at a time when two Daily Fantasy Sports sites – FanDuel and DraftKings – have agreed to cease operations in the Empire State until September in order to allow time for the legislature to pass laws that would legalize Daily Fantasy Sports contests.

Budget Proposals Similar to Bonacic´s Bill

The proposals for regulating online poker in New York that appear in Senate Bill S6409B (the Budget) are very similar to those introduce in John Bonacic´s Senate Bill S5302 “to allow certain interactive poker games”. Bonacic´s bill mirrored the online poker proposals [geolink href=””]introduced into the Assembly[/geolink] by Gary Pretlow – chairman of the Assembly Committee on Racing and Wagering.

If passed – either as part of the budget or as a standalone bill – up to ten operators would be allowed to provide online poker for residents of New York State after they ponied up $10 million each for a ten-year license. The operators would be taxed at 15% of their Gross Gaming Revenue, but would be able to write down their tax liabilities for the first thirty-six months against the licensing fee.

Although these proposals have been around for a while in various forms, there is yet to be a serious discussion on them. John Bonacic was the only member of the Senate Standing Committee on Racing, Gambling and Wagering in attendance for most of last September´s public hearing to discuss The Future of Online Poker in New York State and his S5302 was [geolink href=””]rushed through the committee stage[/geolink] last month without any comment being made about it at all.

A Cause for Optimism, or More False Hope?

The reaction to the inclusion of online poker in New York´s budget proposals has been strangely muted. Advocates of regulated online poker – who are usually keen to recognize any movement towards regulation as the dawning of a new age – have refrained from their usual exuberance; and John Pappas, Chief Executive of the Poker Players Association, told OnlinePokerReport:

The budget in New York is not an easy process to handicap. It’s encouraging to see iPoker included, but we’ve been in this position before and came up short.

There is also the question of who would want to be an operator in New York in a poker-only environment. New York´s population of 8.4 million is less than that of New Jersey, where poker revenues have failed to meet expectations. The recent launch of PokerStars in New Jersey has done little to drive players to the virtual felt, but – with no bad actor clause in the online poker proposals – PokerStars would be the dominant force in a regulated New York marketplace assuming an equal start.

As has been seen in European ring-fenced markets where one operator – such as PokerStars – has such a dominant market position, poker alone is not a financially viable proposition for any other operator. Consequently, PokerStars is likely to be the only site lobbying for online poker in New York – and likely to face opposition from brick-and-mortar casinos concerned about cannibalization.

There is still a lot of ground to go over before online poker in New York becomes a reality, but at least the Senate is talking about it.

Jacqueline Packett
Jacqueline Packett