NY Online Poker Bill: Passes Senate, But Is There a Catch?

Online poker made significant progress in New York yesterday after the Senate approved of S5302 by an overwhelming 53-5 vote. Despite the news, the odds of anything happening this year remain low. The Assembly still needs to vote on the bill and one lawmaker there said “it’s just not there” when asked if there was support in the Assembly. The odds grow even longer when we consider the state legislature adjourns for the year on Thursday.

This means that as of this writing, the bill has fewer than 24 hours to be taken up in the Assembly, receive a positive vote and then be signed into law by Governor Cuomo. With Assemblyman Gary Pretlow on the record saying that there are not enough votes in the Assembly to pass the measure, it seems unlikely that New Yorkers will be playing at legal online poker sites anytime soon.

However, the Coalition Against Gambling did raise concerns earlier this month that online poker legislation could be packed into an omnibus bill at the end of the legislative session. Last minute omnibus bills, also known as “the big ugly,” do sometimes mix unpopular measures in with popular measures that make it tough for lawmakers to oppose the legislation.

The bill in question seeks to legalize online poker by classifying games such as Texas Holdem and Omaha as contests of skill. Under the law, licenses to run online poker games will cost operators $10 million and be valid for 10 years. That licensing fee will also be used to offset the proposed 15% tax rate on revenue.

Even if the bill does fail in 2016, the fact that the bill has made it this far is good for poker players in New York. Yesterday’s successful vote shows favorable momentum and will give pro-poker lawmakers a positive start for next year’s legislative session. We have now seen that there is significant support for New York online poker among many of the states top lawmakers.

The bill also has the support of MGM Resort International. Shortly after the vote, the company issued a statement in support of the favorable vote.

“Creating a safe, regulated option for online poker players in New York would generate millions in new tax revenue that could be used for education and other critical investments. We applaud the Senate for passing this sensible legislation that will help protect New Yorkers who have for years played online poker on unprotected, offshore poker websites that today operate with no regulation, fraud controls or age restrictions.”

If and when the New York online poker bill is approved, it will make the Empire State the biggest market yet to legalize online poker. A success in New York would also be likely to motivate lawmakers in other states to follow suit. Additionally, the bill being discussed this week gives the New York State Gaming Commission the authority to enter player-sharing agreements with other states that have also legalized online poker.

The other states that have already legalized online poker include New Jersey, Nevada and Delaware. Player sharing agreements between New York and any of those other states would greatly increase liquidity for operators in both states. Players in New Jersey, for example, would find themselves seated at tables with both locals and New York residents. With federal legislation unlikely, player sharing agreements among regulated states are key to building a healthy poker economy for operators and players alike.