New York Edging Closer to a Legalized Poker Industry

Legislation, US
New York

New York, the Empire State, gave no indication that it would be legalizing poker in 2019. Now, a pre-filed draft promises to change this.

New York Poker Bill Finds New Backer

New York was at the helm when the state challenged the Wire Act interpretation which led to the day in the U.S. poker industry fitting known as the Black Friday. The Empire State petitioned the Supreme Court whether the Wire Act applied to just sports betting or it reach was broader. The court then produced a ruling, arguing that the Wire Act would only be applied to sports betting.

Not much has happened on the poker landscape since for the state, despite the daring-do of lawmakers from before. Today, however, things could be about to change. Former Republican State Senator John Bonacic is now out and his successor, Democrat Senator Joseph Addabbo seems to be in a turn of mind for a game.

Democrat Senator Joseph Addabbo has filed a bill by the name of S.00018, seeking to legalize online poker in New York. The document has outlined the legal framework and parameters of a would-be legal activity. Click To Tweet

It was Mr. Addabbo who pre-filed a bill that appeared on the New York State Assembly website on Monday, January 7. The bill, known by its legal name as S.00018 will be arriving to the Racing, Gaming and Wagering Committee later this week to take a chance at wrestling with big lawmakers.

S.00018 seems to be the big go-ahead gambling, and poker for that matter, have always needed in New York, with one of the provisions of the bill reading as such:

Licensed interactive gaming activities under section fifteen hundred two of the racing, pari-mutuel wagering and breeding law shall not be a gambling offense under this article.

The document also seeks to settle a long-drawn conflict that often cites the nature of poker as a game. At the very top, the document reads:

Allows certain interactive poker games be considered games of skill rather than games of luck; includes definitions, authorization, required safeguards and minimum standards, the scope of licensing review and state tax implications; makes corresponding penal law amendments.

The bill is cleverly-designed to draw on the existing victories achieved by the states after New York’s efforts to legalize sports betting and poker have been defeated at least twice in the Assembly. As per the now filed bill, poker has already been determined a “game of skill” and therefore should be excluded from all deliberations of regulation (or legalizing for that matter) the gambling industry.

Another highlight of the bill explains online poker is an established phenomenon and a form of entertainment so popular that any efforts to create a legal framework shouldn’t focus on the “legality” of the activity, but rather seek to establish the laws that would guarantee safeguarding participants.

If the bill is passed successfully, it would take it 180 days to become a law, although once the bill is cleared in the Assembly, support from Mr. Addabbo will be immediate, speed-tracking the legislation. At this point, any operator that wants to offer “legal” poker in New York would be able to do so upon purchasing a license for $10 million. As per the current specifics, operators will have to pay 15% of their gross gaming revenue back to the state. The market will not be unlimited, though, with 11 licenses up for grabs should all the legal hurdles be cleared.

Specifically, the bill outlines the following conditions for the passage of the legalized poker industry:

  • All participants must be of the legal gaming age, i.e. 21 years old
  • Licenses would cost $10 million and there will be a grace period during which operators wouldn’t pay any taxes as the license fee would be applied to the first 60 days of operations
  • Operators will be taxed 15% of their GGR
  • An overall of 11 licenses would be available
  • Both tribal and commercial operators based in New York would be able to apply

It all sounds upbeat and having found a new sponsor, poker in New York definitely seems to be developing faster than anyone could expect. However, there are more challenges to consider down the road, including clear the biggest pitfalls of all – the Assembly.

Assembly Woes – Dealing with Poker Trouble on a Legislative Level

Senate bills have been an easy sell in the higher legislative body, but the Assembly has turned out to be the origin of much contention and problems. Assemblyman Clyde Vanel and J. Gary Pretlow teamed up in 2018 to see a bill pushed through the body, but it all came utterly short.  It was Pretlow who didn’t muster any votes to back the bill.

Pretlow explained his reluctance on backing the poker bill in full by pointing to the benefits of running with sports betting, which was legalized in May, 2018, turning a new page in the history of the United States.

Still, Vanel remains a supporter of legalizing poker, which can translate into a fresh opportunity for the industry. Senator Addabbo will almost certainly garner the support that he is hoping for, leading to a decisive push in the Assembly where Addabbo will have to learn from the mistakes of his predecessors.

The Other Legal Trouble in 2019

The entire gambling industry seems to be expanding at a satisfactory pace. Poker is still lagging behind sports betting, but that’s understandable, as the most earth-shattering move so far has been the defeat of PASPA, and the unexpected results from the move.

Several Senators attempted to bring up a bill with the Department of Justice (DOJ), trying to introduce more government control into the segment, a notion that has so far not seen the light of day, although it’s far too early into the year to be sure.

Back to S.00018, the legislation comes with a “bad actor” clause, which essentially means that companies that were offering poker products to New York customers after 2006 could be denied entry in the newly-regulated industry.

Something similar is happening across the Atlantic in Europe where the Dutch Gaming Regulator (KSA) has been preparing to launch its own legalized iGaming industry (although plans have halted), shaking finger at those “bad actors”.

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