Proposed NY mobile sports betting law would allow only two operators contracting directly with the state, with four skins apiece.

New York’s Mobile Sports Betting Proposal Is A Mess, But Leaves The Door Open For Online Poker

Yesterday, New York published its state budget bill including detailed language on legalizing mobile sports betting. Online Poker Report and others have argued that this brings the state closer to allowing online poker.

New York has a history of failure when it comes to regulating gambling. With its resources and progressive political disposition it could be leading by example. Instead, it is way behind the curve compared to its neighbors. For instance, it has authorized retail casinos, yet imposed a moratorium on physical table games downstate until 2023. That has left New York City residents traveling out of state to Atlantic City as the closest full-featured gambling destination.

Likewise, it has already passed one sports betting bill, but restricted the activity to retail properties. It is already regretting that decision, as other states have found that 80% or more of revenue comes from online channels. Meanwhile, online poker has been a success in neighboring New Jersey, yet faces an uphill battle in New York.

The new budget bill takes 13 pages to describe how the proposed mobile sports betting system will work, and it’s a mess. New York doesn’t seem to have learned anything from past experience.

Cutting out the casinos

Governor Cuomo originally wanted a monopoly with operators bidding for the exclusive rights to run sports betting on the state’s behalf. He has got most of what he wanted. If all goes according to his plans, mobile betting could start as early as this fall.

Certain aspects of the bill may provide clues on how online poker might come to New York. At the very least, the legislative infrastructure is likely to be similar.

Poker and sports betting appeal to a similar audience and there are few persuasive arguments to legalize one and not the other. New Yorkers’ experience of a safe, legal sports betting market may make online poker more palatable in future.

Key Points in Budget Bill

Bill A03009 section Y is a fairly complex piece of legislation, and not easy to read. The main features appear to be:

  • The New York Gaming Commission (NYGC) will choose which sportbooks to license.
  • The NYGC will select two platform providers, each of which will pay $25 million for the privilege. NYGC may authorize more platforms.
  • Platform providers will bid on the tax rate they’re willing to pay, starting at a 12% minimum. Both will pay the same rate, based on the highest bid.
  • Each platform provider will offer at least four skins.
  • Servers must be placed inside a licensed casino.
  • Hitting a $2,500 deposit cap triggers responsible gaming intervention.

On that last point, the text states:

“When an account holder’s lifetime deposits exceed two thousand five hundred dollars, the mobile sports wagering operator shall prevent any wagering until the patron immediately acknowledges that the account holder has met the deposit threshold and may elect to establish responsible gaming limits or close the account, and the account holder has received disclosures from the mobile sports wagering operator concerning problem gambling resources. Once a patron has reached their lifetime deposit, such patron shall annually make the acknowledgement required by this paragraph.”

Where does online poker fit in?

The bill text seems to contain some forward-looking provisions that could apply to online casinos or poker. It begins by explaining why mobile sports betting is legal within the current constitutional framework:

“Section 9 of Article 1 of the New York State Constitution was recently amended and provides ‘casino gambling at no more than seven facilities as authorized and prescribed by the legislature shall hereafter be authorized or allowed within this state.’ It is the sense of the legislature that this provision is not contravened by a statute that authorizes the acceptance of a wager by an individual who is betting by virtual or electronic means and the wager is accepted through equipment located within a licensed gaming facility.”

None of that is specific to sports betting. If the law goes unchallenged, then it should provide precedent for other forms of online gambling as well.

The other main objection to legalizing online poker in the state is its role in problem gambling. There isn’t much to that argument, however.

A problem gambling study published in January 2020, stated that:

“People who regularly played only online poker were at lower risk of problem gambling than people who did not play poker regularly, but played other games as well, which is in line with the results of other studies.”

In other words, the research does not suggest that online poker is more harmful than sports betting or other forms of legal gambling. If those other forms are legal, then there’s little reason not to include poker as well.

Online poker may follow the sports betting model

New York’s approval of online sports betting may have removed some of the arguments against online poker, but there is still a way to go.

The NY budget must go through the legislative approval process. That should bring out the opponents of online gambling, as well as its supporters. A head count might encourage New York’s online poker supporters to act sooner rather than later.

Assemblyman J Gary Pretlow, and State Senator Joseph Addabbo will seize the opportunity to propose legal online poker if they get the chance. Addabo’s S18A bill to legalize poker died in committee as did Pretlow’s A4924 bill.

Even if the two legislators revive their bills, they will probably have to adapt to follow the mobile sports betting framework. Deposit limits and high taxes are likely to be included. Restrictions on the number of platforms may also appear.

There is a precedent for New York’s two platform, eight skins strategy. Delaware selected 888 as its platform provider, with three casinos operating as skins. New Hampshire is also charting a similar path. These markets haven’t been huge successes, but that may be as much to do with their populations as with the model. As a much larger state, perhaps New York can make it work.

The big three names in US online poker are PokerStars, WSOP (powered by 888) and BetMGM/Partypoker. All three would want to offer their platforms in a market the size of New York, but restrictions like those on sports betting could mean one of them being locked out of the market. They will lobby hard to avoid such an outcome, which could hinder the overall chances of success.

- A former founder of Poker Industry Pro and Head of Content at PokerNews publisher iBus Media, Joss Wood is a graduate in English from the University of Birmingham. Joss also holds a master’s degree in Organisational Development from the University of Manchester. His career path has taken him from the British Army, through business and finance to seven years as a successful professional poker player.
Privacy Policy