New York Introduces Poker-Only Bill To State Assembly

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Friday, May 9th, 2014 | Written by Stephen Smith

In late March, Senator John Bonacic introduced internet poker bill S6913 to the New York Senate with the intention of defining poker as a game of skill and paving the way for a regulated state online poker industry. Now New York has seen near identical bill A09509 introduced by assemblyman J. Gary Pretlow (D-Mt. Vernon) to the state assembly, with the purpose of authorizing “the New York State Gaming Commission to license certain entities to offer for play to the public certain variants of internet poker which require a significant degree of skill, specifically ‘Omaha Hold’em’ and ‘Texas Hold’em.’”

Just poker and not casino games

Like Nevada, New York, too, is aiming to restrict itself to just online poker games, unlike the other regulated markets of New Jersey and Delaware which also offer other online casino games, such as blackjack and roulette.

Consequently, assemblyman Pretlow’s bill is seeking to amend the present Racing and Pari-Mutual laws to allow a limited number of poker games to be offered by the state. The new bill draws on a particular reference to the New York Federal Court case U.S.v. DiCristina case, in which it was found that ‘under federal law poker was predominantly a game of skill’, even though the finding was later overturned by the U.S. Second Circuit Court of Appeals.

Nevertheless, most players with an understanding of the game realize that while luck plays a significantly part in short-term results, by having a deep knowledge of probability, psychology, and game theory, poker players are able to ensure long term success over less knowledgeable players and so carve out a potential career for themselves.

Bad Actor clause

Another stipulation of bill A09509 is that a ‘bad actor’ clause is included which would effectively prevent any internet gambling company from obtaining a state license which flaunted the UIGEA after it passed in December 2006. Needless to say, while companies such as PartyPoker and 888 stand to gain from such a stance, online market leader PokerStars will once more find itself excluded from yet another potentially lucrative market. In this case New York state with its population of 8.337 million residents.

A foil to offshore operators

Despite just three states currently offering online gambling, US residents across the country continue to play on US-friendly sites which operate within the grey market. Consequently, while nearby New Jersey in March saw its online traffic fall 31% lower than its January 26th peak of 616 cash-game players, traffic across the top three unregulated US sites reached 2,161 over the same period, with Bodog’s traffic of 1,500 cash game players dwarfing that of Party Poker NJ of just 179 players.

As a result, online poker advocates now believe that as these sites cannot be blocked then the best way to protect consumer rights is to legalize and regulate the industry as a whole. As the bill states:

“Presently, numerous New York residents are participating in illegal, unregulated and unsafe gaming operations which offer games of chance over the Internet. This bill will allow the state to license operators that meet the high standards set by the state and offer limited games of poker which require a high level of skill. This bill will require such operators to take steps to protect consumers, combat compulsive gaming, and prevent minors from accessing online gaming sites.”

Other aspects to bill A09509

In addition, the bill envisages raising $100 million in license fees for New York by permitting up to 10 interactive gaming licenses each costing $10 million over a ten year period. The state would subsequently collect 15% tax on their “interactive gaming gross revenue.”

Provisions in bill A09509 would also allow New York to participate in liquidity sharing agreements with other US states, such as the one already agreed by Delaware and Nevada and expected to launch this summer.

Chances of bill’s success?

The bill submitted by assemblyman J. Gary Pretlow will first be debated in the Assembly Racing and Wagering Committee, which he chairs, before further progress is made. However, neither Pretlow’s bill, or State Senator John Bonacic similar gambling bill S6913 are expected to move much this year, especially as New York prepares to implement the sweeping expansion of its land-based casino industry, with another four casinos being built to complement the states number of existing tribal casinos and racinos.

Nevertheless, the online poker bills are designed to encourage meaningful discussion on the issue at a time when other US states such as Massachusetts, California, and Pennsylvania, are seriously considering legislation and regulation. As Senator Bonacic warned recently:

“New York needs to begin considering how to effectively regulate the burgeoning industry.”