State-Level Online Gambling Legalization Efforts Provide An Optimism Boost To Industry Supporters

Can Regulated Online Gambling’s Current Momentum Translate To Critical Mass?

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Palpable, that’s the way veteran gaming analyst Chris Krafcik of Gambling Compliance described the current flurry of activity around online gambling legislation we are seeing at the state level.

Krafcik’s sentiment comes on the heels of the New York Senate Finance Committee passing Senator John Bonacic’s online poker bill by a vote of 20-8, a vote that sends it to the Senate floor for consideration.

Recently I wrote about the late pushes that were already taking place in Michigan, California, and Pennsylvania, and after last Thursday’s developments we can now add New York to that list.

New York sending an online poker bill to the Senate floor is a development no one expected. But as the saying goes, things can change in a New York minute.

Unified support

Beyond the momentum in state legislatures, there also appears to be a united front, and a more centralized message from the supporters and stakeholders for these legalization efforts.  What’s missing from the conversation in 2016 are the intermittent calls for patience and further discussion from certain pockets of the industry.

For instance, MGM, which doesn’t have a casino presence in New York (this doesn’t necessarily preclude the company from partnering with an existing operator for online gaming), but is in favor of continued online gaming legalization in the U.S. and has been active on this issue in New York in the past, said of Thursday’s vote:

“This legislation recognizes that millions of New Yorkers play online poker on unregulated and unprotected off-shore poker websites that operate with no oversight, fraud controls, or age restrictions.

“We applaud the Senate Finance Committee’s vote to create a safe, legal environment for online poker through legislation that will generate tens of millions of dollars in revenue for taxpayers, and create open and fair opportunities for all providers of online poker.”

MGM’s press release went on to hammer home, with specific data and facts, the new argument for legalization and regulation: consumer protections. This is a new line supporters of online gaming have coalesced around.

Why it’s different this time

I have to agree with Krafcik. The general sense is that there is something afoot. Whether it will result in a bill being passed is unknown, but the efforts currently taking place in several states don’t feel like the dog and pony shows from years past.

I may not have his 10 years of experience covering the industry, but there hasn’t been this much energy and excitement, mixed with a healthy amount of optimistic uncertainty since the launch of New Jersey’s online gaming industry in November of 2013. And this momentum and optimism are not just in New York; I’m getting the same sense from Pennsylvania and Michigan.

It’s as if everyone is suddenly waking up to the fact that the future of online gaming in the United States could very well be on the line.

As I said in my post-iGNA analysis:

“Three consecutive years with close to zero progress will test anyone’s patience, but for an industry that evolves at warp speed, the current stasis in the online gaming world has many people growing frustrated and stakeholders becoming increasingly alarmed.

“We haven’t reached the lashing out point (yet)… if something doesn’t change soon (in the next year or so), the lashing out point will be reached.”

DFS for online poker?

New York didn’t come out of nowhere.

The state was seen as a leading candidate to pass an online gambling bill heading into the aforementioned iGaming North America conference in early April, but those hopes were dashed when New York Assemblyman Gary Pretlow addressed the conference via Skype.

During his comments, Pretlow said the chances an online poker bill would even be considered for a vote this year were about 100-to-1. Pretlow was still sour on online poker’s chances as late as last week.

Pretlow’s pessimism made the timing of last week’s vote on Senator Bonacic’s online poker bill conspicuous.

First, the bill was a very late addition to the hearing. And with the legislative session set to end in a couple weeks, it seems unlikely Thursday’s vote on Bonacic’s online poker bill was a mere coincidence.

There would be little reason for the Finance Committee to add the measure to the docket and then easily pass it when it is trying to tie up 100 loose ends at the end of a legislative session if the committee didn’t anticipate future action.

With daily fantasy sports legalization also being considered by the New York Legislature, and with the state’s casinos and racinos demanding to be part of the DFS action, these interests could very well be taking a tit-for-tat approach to the two issues at hand. In other words, they could be arguing that if action is taken on DFS, it has to be tied to the legalization of online poker.

The sudden resurrection of online poker could be the proverbial bone the legislature is throwing to the state’s land-based gaming industry in exchange for it backing off its demands that DFS be run through the New York’s casinos and racinos.

We’ll give you online poker, but not DFS.

- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.
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