New York Senate Passes Online Poker Bill, But Will The Assembly Follow Along?

The New York Senate passed a bill that would legalize and regulate online poker for the second consecutive year.The bill, S 3898, passed by a vote of 54-8 on Tuesday.

The bill, sponsored by Sen. John Bonacic, seeks to legalize online poker on the grounds that it’s a game of skill.

The measure is now on its way to the Assembly, where its fate is something of a mystery.

Bonacic statement on NY online poker

Sen. Bonacic offered this statement after his bill passed on Tuesday:

Presently, numerous New York residents are participating in illegal, unregulated and unsafe gaming operations over the Internet. This bill will allow the state to license operators that meet the high standards set by the state while requiring such operators to protect consumers, combat compulsive gaming, and prevent minors from accessing online gaming sites.

“This bill serves two main purposes in allowing New Yorkers access to regulated online poker while providing critical consumer protections and increasing revenues to the state for education and taxes via operator licenses,” said Senator Bonacic. “I will continue to work with my colleagues in the Assembly to see that this bill passes both houses before the end of session.”

What will the Assembly do on NY online poker?

As we’ve catalogued numerous times over the past two years, if Assemblymember J. Gary Pretlow’s relationship with online poker was a Facebook status it would read, “it’s complicated.”

Any speculation on the bill’s fate in the Assembly would be just that, speculation.

Time is of the essence for online poker

If the Assembly is going to vote on Bonacic’s online poker bill it better get cracking.

The New York Assembly only has a handful of scheduled working days remaining on its legislative calendar.

What did the NY Senate just pass?

The basics of S 3898 are in line with online gambling bills we’ve seen in other states.

• Players must be at least 21 years of age and within New York’s borders.
• It would allow New York to enter into interstate agreements with other states.
• The bill tasks the state gaming commission with crafting regulations and oversight.
• It authorizes operators to contract with online gambling companies and use their online gaming software.

There are also some unique New York-centric elements to the bill.

The bill, would authorize the New York State Gaming Commission to award up to 11 online poker licenses.

Unlike other bills seeking to legalize online gambling, New York’s bill doesn’t limit licenses to in-state businesses.

Per the bill, applicants can be, “Current licensed operators of video lottery gaming in New York or from states with similar licensing requirements,” provided they are approved by the NYSGC.

The bill lists the following baseline requirements for licensing:

• Current licensed operators of video lottery gaming in New York or from states with similar licensing requirements with experience in interactive gaming, or guarantees acquisition of adequate business competence and experience in the operation of interactive gaming.
• Brick and mortar Class III gaming operators licensed by New York or in a state with comparable licensing requirements, or guarantees acquisition of adequate business competence and experience in the operation of interactive gaming.

New York would tax online poker operators at a rate of 15 percent of gross gaming revenue. The up-front licensing fee is a hefty $10 million. But the state softens the blow from the up-front fee, as it pays for future taxes owed.

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Bad actor language added at eleventh hour

A recent amendment inserted what has become known as bad actor and tainted asset language into the bill. This type of language targets online operators (read PokerStars) that didn’t leave the US market following the passage of UIGEA in late 2006.

The bad actor clauses force regulators to weigh the following acts when they’re considering licensing suitability:

(i) has at any time, either directly, or through another person whom it owned, in whole or in significant part, or controlled:

(A) knowingly and willfully accepted or made available wagers on interactive gaming (including poker) from persons located in the United States after December thirty-first, two thousand six, unless such wagers were affirmatively authorized by law of the United States or of each state in which persons making such wagers were located .

The language isn’t an outright ban (it calls on regulators to consider these actions). However, it would complicate things for PokerStars.