If New York Is Going To Make Progress On Online Poker, Something Needs To Change

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New York State Senator John Bonacic recently held a committee hearing on the subject of online poker regulation, which was lightly attended by his fellow lawmakers.

Bonacic has twice introduced bills trying to legalize online poker in the state, and neither time has the legislation gained much traction.

Last week’s hearing was only informational in nature — there was no associated bill. The committee hearing was billed: “To Discuss the Future of Online Poker in New York State.”

Clearly, Bonacic would like to introduce a bill again in the future, based on his calling of this hearing. But, New York appears to be spinning its wheels on the subject.

What has to change in order for New York to make some progress on the online poker front? Or what variables could contribute to a more friendly environment for online gambling legislation?

What Bonacic wants to see change

Bonacic talked with Gambling Compliance (paywall) about possible changes to the bill.

Specifically, he mentioned the possibility of changing the licensing fee — currently standing at $10 million per license — as well as whether licensees would be required to partner with an established gaming interest in the state.

Bonacic also offered this statement to Online Poker Report:

“The hearing brought forth a large amount of good information on the subject of online poker – one point that I specifically thought was interesting was that 85% of those who engaged in online gaming in New Jersey had never set foot in a casino prior to gaming online.  I expect that as I work with my colleagues in the Senate, as well as the Governor’s office and the Assembly, there will be significant discussions on a myriad of issues regarding the bill.”

So, it’s obvious Bonacic is willing to change the bill to garner support. But more than those tweaks might need to happen to see momentum for the legislation.

Get the NYGA on board

The biggest deterrent to progress so far has been the people who can make online poker happen in the state. Clearly, Bonacic wants online poker, as do casinos. For example, here is written testimony from MGM (of note, MGM does not have a brick-and-mortar interest in the state):

MGM Resorts International supports legislation that would allow adults to play safe, fair, and regulated online poker and prevent minors from accessing the sites. Such legislation would also reduce the millions of dollars New Yorkers spend every year on illegal foreign poker websites, keeping that revenue in the state.

James Featherstonhaugh, the President of the New York Gaming Association, does not appear to be helping the situation, however. At last week’s hearing, he brought up the myth of online casinos cannibalizing brick-and-mortar ones, while also urging the state to wait and move slowly on online poker. Other witnesses debunked the cannibalization idea.

The NYGA represents the gaming interests of the nine racetrack gaming facilities in the state. If Featherstonhaugh and the NYGA are sending a different message than brick-and-mortar casino interests, it muddies the waters, and simply makes it less conducive to passing legislation.

If the NYGA isn’t going to be all-in on poker, it’s not the end of the world. But having him support the effort can’t hurt. The casinos might want to educate him better, and emphasize exactly how much they want online gaming.

Get more lawmakers on board

The hearing was meant to educate the stakeholders, but unfortunately, few senators attended the recent hearing; in fact, Bonacic was the only lawmaker present at one point.

Assemblyman Gary Pretlow, Bonacic’s counterpart who chairs the Assembly Committee on Racing and Wagering, seems to be lukewarm at best on online poker.

Pretlow has said in the past that he doesn’t believe the technology behind age and identity verification is good enough.That sentiment simply been proven untrue, especially in New Jersey, where those processes and geolocation have had a nearly spotless record so far. Pretlow has also noted that he’s been unimpressed with what New Jersey has done, so far.

The hearing apparently didn’t have the intended effect of making unconvinced stakeholders believe that online poker is a good move for New York. So, it might be time to look at other tacks.

It’s not clear how much behind-the-scenes lobbying is being done, but it appears that more could and should be done. The “Let NY Play” campaign could get ramped up again. The NYGA and lawmakers could take a field trip to New Jersey, to see how it’s being done there.

The point is, this hearing didn’t seem to get the job done. If the stakeholders who want online poker want to move forward, they obviously need to change the gameplan.

Scrap the poker-only model

Part of the reason why it’s likely difficult to get a lot of the shareholders really excited about the prospects of online poker? The ceiling for revenue is pretty low. Here is a projection from Gambling Compliance:

NY Poker Revenue

The online casino market has proven to be far more lucrative in the early stages of regulated online gambling in the U.S., and it doesn’t bring with it the need for lots of users to breed liquidity. New York has likely looked at its neighbor on this front; while New Jersey online poker has underwhelmed, New Jersey online casinos have fared much better.

It seems fair to assume casinos would push even harder for progress if they believed there was an appetite for legislation that also allowed other forms of online gambling.

It would also seem to be an easier sell for legislators, if they could see meaningful revenue coming into the state coffers, beyond the initial licensing fees.

More states getting into online gambling

Right now, there are still just three states that have legalized online poker and gambling — New Jersey, Nevada and Delaware.

New York, for a variety of reasons, has obviously been tepid on online gambling. Seeing other states possibly getting into the market — including its neighbor, Pennyslvania — could help the Empire State jump into the pool.

Right now, there are few likely candidates to do so, however. After building momentum in Pennsylvania earlier in the year, online gambling has not been a big part of the discussion in the ongoing budget impasse in the state.

Photo by Adrian Scottow used under license CC BY-SA 2.0

- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner. He has played poker recreationally for his entire adult life and has written about poker since 2008.
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