New York is one of several states to have considered online poker legislation since 2011. The state legislature has tried each year since 2013 to legalize the game in one form or another but have yet to be successful.
The first attempt to regulate iPoker came in March 2013 when the state Senate included online poker regulation as part of the annual budget. Language was included in the budget that would legalize online poker as a game of skill. Unfortunately, the measure failed to earn support and was ultimately dropped from the budget.
Assemblyman Gary Pretlow and state Senator John Bonacic tried legalize online poker in 2014. They filed companion bills A9509 and S6913 as to legalize online poker. The online poker bill also would make poker a skill game rather than a game of chance. Operators would have had to pay 15% taxes on gross revenues in addition to a $10 million licensing fee.
Both measures also contained a bad actor clause that would have banned PokerStars from operating in New York. Both bills died at the end of the 2014 legislative session as lawmakers turned a deaf ear to the issue.
Senator Bonacic tried once again in 2015, filing S5302. This time around the iPoker bill included language to allow New York to enter into interstate compacts for online poker. Also, the bill dropped the bad actor clause language, which was likely a result of the 2014 sale of PokerStars to Amaya and changing attitudes across the country on bad actors.
While S5302 was an important step forward in the regulation process, it was filed too late in the year to garner any attention from lawmakers and died at the end of the 2015 legislative session. Now lawmakers must try again in 2016.
Current Status of Online Poker in NY
Online poker is presently illegal in the state of New York. While gambling laws are always subject to interpretation, online poker is still classified as illegal gambling. This means that online poker operators are subject to penalties such as those levied against Full Tilt Poker, Absolute Poker and PokerStars following the events of April 11, 2011, also known as Black Friday.
In addition to New York state law, many online poker sites are in violation of the Unlawful Internet Gambling Enforcement Act (UIGEA) that was passed in 2006. This law states that U.S. banks are not permitted to process online gambling transactions of any type. This has caused problems for some sites and players trying to get funds on and off sites.
Prior to December 2011, many lawmakers also believed that online poker fell under the umbrella of the federal Wire Act that prohibits transmissions of bets across state lines. In late December 2011, the Department of Justice issued a groundbreaking opinion that the Wire Act only applied to sports betting and no other forms of gambling.
This opinion opened the door for some states to examine the issue of online poker and presently online poker is legal and regulated in three states. Other states such as California, Pennsylvania, Iowa, Washington State, Mississippi and now New York have all examined the issue.
While online poker operators cannot offer poker legally in New York, players do not face penalties for playing online poker. With that said, players are always taking a risk with their money when they gamble on unregulated sites. Players on sites such as UB.com, Absolute Poker, Full Tilt Poker and most recently Lock Poker have lost millions when the companies either folded or closed up shop and absconded with player funds.
Online poker regulation has been discussed multiple times in the New York legislature with the most recent bill filed in 2015. The most current bill was filed with only a month left in the legislative year and failed to move.
Will Online Poker be Legal in 2016?
New York online poker players are eagerly awaiting word as to when they can expect online poker to become legal statewide. While anything can happen, we presently put the odds of online poker becoming legal in 2016 at around 50%.
While this is not the most optimistic view of when online poker will become legal, it is a prediction based on the recent history of regulation in the state and the progress of the same in other states.
You may also notice that our estimate is higher than other analyst estimates of 2 to 4 years or more. The reason is due to recent positive developments surrounding regulation. State Senator John Bonacic has announced that online poker will receive a hearing sometime in September. Bonacic is the chairman of the NY Senate Racing, Gaming and Wagering Committee. He is also the champion of the most recent legislation submitted to the Senate.
This hearing will allow us to get a better idea of the pulse of online poker regulation in New York and how willing lawmakers are to move forward with the issue. A positive outcome for this hearing could lead to major advances in the regulation process in 2016.
We also believe that a positive hearing will lead to a faster submission of an online poker bill in 2016. This year’s bill was submitted late due to the lack of support shown by the legislature. Positive feedback from the upcoming hearing could help to fast track regulation.
It is also important that lawmakers sort out certain stakeholder issues sooner rather than later. The two major issues that could arise in New York are similar to those in California. Some Indian tribes in New York have spoken out against online poker but not with the ferocity that the Pechanga coalition has in California.
Also, there is the matter of a bad actor clause. If lawmakers are willing to forego a bad actor clause, they could allow PokerStars to file for a license in the state. This would help to boost the iPoker economy from the initial day of launch.
If these issues are addressed swiftly, New York may avoid the problems facing California and could have a real shot at passing legislation in 2016. Next year promises to be a banner year for iPoker regulation across the country. Will New York join the party or will they sit back and continue to wait?