Legal Online Poker Initiatives Progress in New York, California and Michigan

The fight for legal online poker in the United States continues. We’re back today with updates on pro-poker initiatives in three states. Lawmakers in New York, California and Michigan are considering and debating three different bills that seek to bring legal online poker back to residents in each state.

New York and California are particularly important states for online poker owing to their large populations. If one or both states pass an online poker bill and then go on to form interstate agreements with other regulated states (such as Nevada), it will bring many more players to the table and make the games better for everyone. Meanwhile, progress in Michigan suddenly jumped forward after months of inaction.

New York Poker Bill Advances

A poker bill seeking to legalize and regulate online poker was passed by the Senate Finance Committee earlier this month by a 20-8 vote. S.3502 next faces a vote in the full Senate. A positive vote there will send the bill to Governor Cuomo for his final approval.

But before we get too excited, it must be noted that the legislature adjourns on June 16th. The bill still needs to be presented to the senate, discussed and receive a favorable vote before it can be sent to the governor. There are no guarantees the senate will even view the bill as favorably as the two committees that have so far voted in favor of the bill. Needless to say, that leaves a lot to be accomplished with little time remaining.

The bill seems unlikely to make it into law this year. Even so, the fact that the bill has made it this far is great news for poker players in New York. The progress made this year will, at the very least, leave the bill in a strong position for the next legislative year.

S.3502 specifically names Texas Holdem and Omaha as games of skill under New York law. It also paves the way for “any other poker game that the commission determines is the material equivalent of either of those, whether in a cash game or tournament.”

Under the law, the New York State Gaming Commission will oversee the operation of online poker within the state, determine the suitability of license applicants and collect fees and taxes from licensed operators. Speaking of which, the bill seeks a one-time licensing fee of $10 million from approved licensees. That fee will be paid in 36 monthly installments, and each installment may be used to offset the proposed 15% tax on gross gaming revenue.

Poker Players Alliance executive director John Pappas praised the bill’s progress in a press release.

“Numerous discussions and hearings in the Assembly and the Senate have provided convincing evidence that licensing and regulating Internet poker in the state is in the best interest of consumers, and would also generate significant revenue and jobs in New York. The New York legislature should move quickly to pass online poker legislation with strong consumer protections into law this year.”

The Poker Players alliance has also set up a page here that poker players may use to contact influential state lawmakers and urge them to act on the bill.

California Online Poker Bill Amended

Debates between California tribes, racetracks and lawmakers have made for horrifically slow progress on the legalized online poker front in California. One of the main points of contention up to this point has come from the tribes opposing language in any bill that would allow online poker sites that previously accepted customers from the United States after the passage of the UIGEA in 2006 to apply for licenses in California.

Tribes argue that poker sites such as PokerStars gained an unfair advantage by continuing to operate after 2006. Local tribes had no chance to compete given their land-based casino interests on US soil during that time. Allowing those same operators who violated US law to simply return to California, they argue, would give those operators the advantage of name recognition and customer databases that the tribes never had a chance to develop.

Although progress has been slow, a proposed amendment to Assemblyman Adam Gray’s legislation (AB 2863) may help everyone come to a compromise. The proposal was posted by California gaming attorney David Fried and it addresses the concerns of tribes while still allowing major poker sites such as PokerStars to enter California if legislation is ever passed.

Most notably, the proposal seeks to move the cutoff date which would activate the bad actor clause up from 2006 to a new date of 2011. This date is significant for two reasons. First, it coincides with the date in which the Department of Justice issued an opinion that the Federal Wire Act only applies to online sports betting. Second and most importantly, the new date would allow sites such as PokerStars the opportunity to apply for licenses. PokerStars and other sites continued to operate in the US after the UIGEA was passed in 2006, but left voluntarily after the Black Friday indictments of 2011.

The proposal also addresses tribes’ concerns regarding customer databases. Approved operators would be unable to “use any list of customers or database containing customer information that was accrued or created prior to the effective date of legislation” until January 1, 2019. In other words, everyone would have to start customer acquisition efforts from scratch on a level playing field.

This little bit of progress in California may pale in comparison to efforts in other states where bills are actually being voted on and making their way through the legislative process, but it is an important step nonetheless. If the various factions can come together to draft a solution acceptable to everyone, they will form a powerful coalition for getting the bill through California’s legislature.

Gambling Bill Passes a Vote in Michigan

Just yesterday, the Senate Regulatory Reform Committee voted 8-1 in favor of a bill seeking to regulate online casino games and poker in Michigan. The bill in question (SB 889) would legalize online gambling and poker, create a division of internet gaming and then institute regulations and taxes on the industry.

One of the bright points found in the bill’s text includes a clause that would allow Michigan to enter compacts with other states and foreign jurisdictions in which online gambling is legal and regulated. What that would mean for players is the potential to find themselves playing online poker with players located in other states and possibly even other countries.

On a down side, the bill would only allow licensed land-based casino operators and federally recognized Michigan Indian tribes to apply for internet gaming licenses. The bill also sets an upper limit of 8 licenses to be issued in total.

But before we get bogged down to deep into the details, we should note that the bill still has a long way to go and is subject to further amendments. Michigan’s legislature adjourns at the end of this month and the bill would still need to undergo a vote before the full Senate. But before that can happen, a companion bill in the House is most likely needed for any progress. That leaves little time for the bill to make much progress before Michigan’s legislative season draws to an end.

 

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