Online Poker Legalization Included In New York Senate Budget

March 23, 2016
Online Poker Legalization Included In New York Senate Budget

It looks like Pennsylvania and California might have some company on the online gaming front in 2016, as there is a renewed momentum for online poker legalization in New York. The push comes after the New York State Senate surprisingly included online poker legalization in its recently released budget proposal.

There is still a long way to go before online poker becomes a reality in the Empire State, but very quietly, New York has become a serious contender in the race to be the next state to legalize online gaming.

As Poker Players Alliance Executive Vice President John Pappas stated:

“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 a broader support for iPoker today than ever before from both the industry and politicians. As the budget unfolds we are encouraging New York poker players to do their part and contact lawmakers to express support.”

New York’s stealthy online poker progress  in 2016

This isn’t New York’s first go-round with online poker, but thus far the state has only flirted with online gaming expansion from across the room, never mustering up the courage to walk up and officially ask online poker out on a date.

Interestingly, the state’s first attempt at online poker legalization was also through the state’s budget, but the 2013 proposal fizzled out and was never seriously considered by the legislature. Since that time, New York has made more traditional attempts to pass an online poker bill, all of which have basically stalled after being introduced:

  • In March of 2014, Senator John Bonacic introduced the state’s first standalone online poker bill, S 6913.
  • In May of 2014 Assemblyman J. Gary Pretlow introduced a similar piece of legislation, A 09509.
  • In May of 2015 Bonacic reintroduced his online poker bill from 2014, with the new number designation of S 5302.

The measure being considered in the budget is Bonacic’s S 5302-B, mentioned above.

Bonacic’s bill sat untouched throughout the second half of 2015, but after being revived in January of 2016, the bill received a vote during a very brief hearing that went largely unnoticed in February of 2016. At the time Bonacic indicated the bill’s path forward, “took a necessary step forward today with its vote out of the Racing Committee.”

Bonacic went on to indicate the next step would be a stop at the Finance Committee, followed by his hope to have, “ongoing discussions with my colleagues in both Houses regarding this bill as session moves forward.”

However, after S 5302-B’s inclusion in the budget, online poker may be much further along than anyone realized (perhaps some behind-the-scenes discussions have taken place), and the previous committee vote may have been a stealthy way to make the measure available for the budget.

The New York budget

Like Pennsylvania, the New York budget is a contentious process, and there really is no way to forecast the chances of online poker being included in a final version of the $154 billion budget bill.

However, we will have answers relatively soon, as the budget is due in less than two weeks. And while online poker wouldn’t be up and running to see tax revenue flow into the state’s coffers, NY would be able to grab a significant chunk of money from the upfront licensing fees, which are currently set at $10 million each.

If the state attracts five to ten potential operators, the state could reap a $50 million to $100 million windfall from the licensing fees alone.

Four potential hurdles

As noted in the opening, the bill is a long way from passing, and there are at least four serious hurdles that could derail its progress:

  • First, the cloud of daily fantasy sports hangs over the state, and legalizing online poker without acting on DFS may give off the appearance that the legislature’s priorities are extremely out of whack, considering the polarizing nature of the ongoing court case between FanDuel and DraftKings and New York Attorney General Eric Schneiderman that many feel could best be resolved by legislation.
  • Second, Bonacic’s bill only legalizes online poker, which, based on the early returns in New Jersey, means they’re leaving 75% or more of potential online gaming revenue on the table by not legalizing online casino games.
  • Third, a number of New York lawmakers have indicated they want the land-based casinos the state recently licensed to be up and running before they look at other forms of expanded gaming.
  • Finally, the state hasn’t recently held the informational-type hearings that help lawmakers unfamiliar with the positives and negatives of online poker wrap their head around the issue. (The last one was sparsely attended.) Without these informational hearings, it’s easy for online gaming naysayers to find sympathetic ears for the yarns they so often spin.
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