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New York Online Poker: Sixth Bill Introduced

New York online poker enthusiasts are hoping the sixth time is a charm to get legalization over the hump in the Empire State.

New York state senator Joseph Addabbo (D-15) introduced Senate Bill 18 last week, marking the sixth time in the last six years that the state legislature has attempted to regulate online poker.

If passed, SB-18 would charge the New York State Gaming Commission with developing a regulatory framework wherein up to 11 licensed operators could legally offer online poker services:

“The commission shall, within one-hundred-eighty days of the date this article becomes law, promulgate regulations to implement interactive gaming in this state and shall authorize up to eleven licenses to operate interactive gaming involving authorized participants, subject to provisions of this article and other applicable provisions of law.”

Under the bill’s proposed terms, those 11 prospective operators would be limited to New York’s collection of more than two dozen commercial and tribal casino operators.

SB-18 also calls for a flat licensing fee of $10 million per operator, along with a 15 percent tax rate on gross gaming revenue.

As for players, New York online poker eligibility would be limited to adults over the age of 21 who are physically located within state borders.

But while neighboring New Jersey has successfully spread online poker since 2013, and states like Nevada and Delaware have done the same, New Yorkers shouldn’t get their hopes up quite yet.

New York Online Poker Bill is Entering Familiar Territory

Addabbo is picking up the New York online poker torch from his former colleague state senator John Bonacic (R-42), a veteran lawmaker who retired when the 2018 legislative session came to a close.

Bonacic previously served as the powerful chairman of the Senate Racing, Gaming and Wagering Committee, of which Addabbo is a member.

Bonacic was successful in shepherding his previous bills to overwhelming passage in the Senate, securing a 53-5 vote in favor in 2016 and a 54-8 vote the following year. In 2018, Bonacic’s final attempt to legalize online poker resulted in inclusion within the state budget.

Despite those achievements, however, Bonacic’s counterparts in the state Assembly never warmed to online poker, failing to even hold a floor vote on the matter.

Assemblyman J. Gary Pretlow (D-89) – who serves as chairman of the New York Assembly’s Committee on Racing and Wagering – did pen a letter to fellow legislators last year calling for a floor vote, but his request went unheeded.

In December of last year, Pretlow appeared to perform an about face on the issue, telling Online Poker Report that his iGaming focus has now shifted to sports betting regulation:

“I would give up online poker for sports betting.

If I had to make a choice, I would choose this over online poker just because the revenue stream is so much better doing this than online poker.”

PokerStars Seemingly Banished by “Bad Actor” Provisions

Buried within the dense legislative text of SB-18 are two provisions which likely target global industry leader PokerStars as unsuitable for licensure.

State gaming regulators are tasked with considering the suitability of potential operators, with two provisions standing out as specifically applicable to PokerStars:

“(Applicants which) knowingly and willfully accepted or made available wagers on interactive gaming (including poker) from persons located in the United States after December thirty-first, two thousand six.

“(Applicants which) knowingly facilitated or otherwise provided services with respect to interactive gaming (including poker) involving persons located in the United States.”

Congress authorized the Unlawful Internet Gambling Enforcement Act (UIGEA) in October of 2006, effectively banning companies from offering online poker.

While rival operators like PartyPoker chose to abide by the law and withdraw from the U.S. market, PokerStars elected to continue serving American players. This decision resulted in the Department of Justice (DOJ) issuing indictments and shuttering PokerStars’ U.S. platform in April of 2011 on the industry’s “Black Friday.”

So-called “bad actor” provisions like those included in SB-18 are designed to punish PokerStars for its actions, by disallowing the site from returning to markets where its post-2006 presence is said to have offered an undue competitive advantage over companies which complied with the UIGEA.