DFS Bills Garner Attention In New York; Online Poker Bills In State Have Languished

Could Wave Of New York Interest In Daily Fantasy Sports Help Online Poker’s Prospects In State?

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New York is one of the epicenters for state activity in the daily fantasy sports industry in recent months. The New York attorney general’s office has targeted top operators DraftKings and FanDuel, and there are apparently going to be up to four bills floating around the legislature that would create wildly different outcomes.

New York is also one of the few states that has also considered online poker and gambling regulation, although previous efforts haven’t gotten very far. New York in many ways, could be the best example of the possibility if you’re doing “x” with DFS, why would you not do “x” for online poker, as well?

First, the possibilities for DFS in New York

Right now, New York is the state that is most in flux for DFS in the U.S. Several operators, including FanDuel, have pulled out of the state during the ongoing court case, started when NY AG Eric Schneiderman issued cease-and-desist orders to DraftKings and FanDuel in November.

That case, which could see a verdict as early as this week, could mean that DraftKings and all other operators may have to leave New York for the time being, if the operators come out on the losing end. At the same time, the court battle could be in the courts for awhile when it is likely appealed by the losing side.

A negative outcome for DFS could spur the legislature to quicker action, with the possibility of passing a law saying New Yorkers could play DFS legally in attempt to render current law and the AG’s actions moot. Legislatures almost never move fast on anything, however, and there’s been minimal temperature-taking on DFS in the legislature as a whole, other than a few lawmakers who have openly attacked the AG’s assault on DFS and the two gaming committee chairs.

There are at least two different approaches to DFS right now in the New York legislature: A bill that would put DFS under the purview of the state gaming commission, and another that would exempt DFS from state gaming law and delineate it as a game of skill. That’s in addition to two pieces of planned legislation from Assemblymember Dean Murray. How popular any of these approaches might be is unknown, and neither includes regulatory language that has cropped up in several other states’ bills.

A hearing on Tuesday in the Assembly racing and wagering committee could give us a better look into what lawmakers are thinking about the future of DFS in the state.

There’s also the wild card of the reported investigation by the Southern District of New York, whose possible targets and aim are unknown.

Where the gaming chairs sit in New York on DFS and poker

The people who matter most in any DFS legislation efforts, and in online poker regulation, are the two chambers’ committee chairs for gaming.

The Senate’s Bonacic

Online poker bills introduced by New York State Senator John Bonacic — the chair of the Senate gaming committee — in recent years have gone pretty much nowhere. (The bills have not allowed for other online casino games.)

Bonacic talked about the prospects for DFS in the legislature, according to Capital New York:

“With the explosive growth of Daily Fantasy Sports in the United States, questions have arisen about their operations,” Bonacic stated. “I personally believe that it is a game of skill, and not a game of chance. Daily Fantasy has operated legally for years in NY and is very popular, however it can be highly addictive. As such, consumer protections may be in order. I expect to have discussions with my colleagues on Daily Fantasy Sports when the legislative session convenes in January.”

Bonacic clearly does not need to be convinced that New York should have DFS or online poker available to the state’s residents, but it’s unclear if he would use a possible groundswell of support for DFS legislation to advance poker legislation.

The Assembly’s Pretlow

Gary Pretlow is Bonacic’s counterpart who chairs the Assembly Committee on Racing and Wagering. He has been lukewarm at best on online poker, and seems to be take a similar approach to DFS, from his public comments so far.

His comments to NY State of Politics:

“People have found a loophole in gambling and it’s called fantasy. We’d like to take a closer look and see what regulations, if any, are needed.”

And according to BloodHorse.com, talking about his committee’s upcoming hearing:

“I’m hoping to get some insight into the whole working of fantasy sports in general. The attorney general has said it’s gambling, and whether or not it is I do believe there needs to be some strong regulations to protect consumers.”

He also appeared to be in no rush to quickly move any legislation through his committee, in his comments in that story.

On the online poker front, Pretlow has previously said that he doesn’t believe the technology behind age and identity verification is good enough, an issue that has also attracted attention in the DFS industry. (Of course, those concerns appear to be generally unfounded, with regulated gaming in New Jersey being an example of success in both areas.)

Pretlow has also noted in the past that he’s been unimpressed with what New Jersey has done, so far, with regulated online poker, in terms of revenue. Regulated DFS might similarly disappoint, from that angle.

Equating online poker with DFS?

The New York DFS battle could provide a rallying point for those wishing to see online poker come to the Empire State.

It’s certainly no secret that poker players and the online poker industry would like to piggyback on the “game of skill” argument that daily fantasy sports is using (at least if that’s a gambit that works in pushing through positive legislation). It’s an argument that online poker has generally not come out on the winning end of in the past in trying to be treated differently than other forms of gambling.

The idea of conflating DFS and online poker is a strategy that could gain traction, and there was some evidence of that when Poker Players Alliance Executive Director John Pappas testified in front of a Pennsylvania gaming committee on the subject of DFS. From the PPA’s presser on Pappas’ appearance:

Citing the results of a PPA survey, Pappas began his testimony by noting that 60 percent of PPA’s Pennsylvania members also play daily fantasy sports, a link which may not be so surprising given both poker and DFS are interactive games with a high degree of skill, which fosters critical thinking. … Pappas then explained that the same technologies that are used to ensure the consumer safety of Internet poker players can be adapted to safeguard daily fantasy sports players.

At the very least, New York appears to be somewhat different from jurisdictions that have considered or regulated online poker while wanting to also consider DFS now:

For the legislators who are actively calling for New Yorkers to left alone, to be allowed to play daily fantasy sports if they want to, could that argument be used as impetus for regulated online poker in New York? The argument will likely be trotted out; its potential success is an open question.

- 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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