New York Legislature Might Approve Online Poker by the Summer of 2016
New York state lawmakers included online poker as a line-item in a budget proposal, indicating a willingness to legalize online poker later this year. In fact, the spending bill seems to assume online poker as a part of New York’s budget for fiscal year 2017.
New York’s legislators are trying to find new revenue streams for the $150 billion budget. Online poker would be a small source of revenue compared against the massive state GDP of New York, but it might be worth several hundred million dollars of revenue without raising taxes by that amount.
Senate Bill S5302B
The senate bill named “S5302B” made progress in February 2016. The proposed legislation, which was introduced by State Sen. John Bonacic. S5302B passed in the Senate Racing, Gaming, and Wagering Committee, which happens to be chaired by John Bonacic.
Since then, the bill has made no progress in the senate, though, and seemed to have been forgotten by other lawmakers. That followed a pattern of the last few years. Several online gambling bills have been introduced since 2012, but none of them received a vote on the Senate floor.
Finance Committee to Vote on Bill
The bill is set to proceed to the Senate Finance Committee, which has given advocates optimism that the legislation is going to receive more serious consideration this time around. Pundits believe online poker might be passed this time, because of several factors. Those making such predictions believe the summer of 2016 is a likely time for approval.
Several factors favor online poker. First, there’s the budget shortfall. One gaming analysts believes online poker might be worth $120 million in its first year of operations, with a steady increase in revenue after that, as poker networks and databases of customers are built.
North Jersey Casinos
Second, a vote this November by the state of New Jersey on two proposed North Jersey casinos might spur action. The two casinos are expected to be in the vicinity of New York City — perhaps in East Rutherford and Jersey City — and thus would draw significant revenue from the gamblers of New York.
Online poker could be introduced to counteract the flow of gambling dollars out of the state. It is estimated that about $1 billion in gaming revenue leaves the state each year, because gamblers go out-of-state to other casino destinations and racetracks.
Licensing Provisions
This might be seen as bad news for the land-based casinos which are still being built. If New York state approves online poker, it would likely follow the same model as the other three US states which have online gaming. In New Jersey, Delaware, and Nevada, licensed brick-and-mortar casino operators would be allowed to open poker portals online — but no one else. In other states, online poker operators have made partnerships to support the land-based casinos’ sites.
Three, state legislators want to pass a daily fantasy sports bill, which would legalize and regulate the DFS industry. Lawmakers want to include both provisions in the same bill, because many consider daily fantasy sports a form of gambling. Under that scenario, both DFS and online poker would be included in an omnibus bill.
No Online Casinos
Like similar bills proposed in Pennsylvania and California, S5302B only legalizes online poker. Internet casinos would not be allowed to operate in New York state. This is a stipulation which seems important to many land-based operators, who fear gamblers would not go to casinos and racetracks, if they could stay home to play the same games.
In most locations, online casinos gaming produces a much larger revenue stream than iPoker. Online casinos offer blackjack, craps, roulette, slots, and other games. Slot machines alone make more money in a brick-and-mortar casino than poker, despite the huge popularity of Texas Hold’em tournaments on television.
No Federal Ban
Proponents of online gambling are going to applaud any legalization effort. After the US Justice Department stated the UIGEA did not apply to online casinos and card rooms in 2011, it was thought many states would approve Internet gaming sites.
When revenue figures did not match projections and it appeared as if a federal ban on online gambling — Restore America’s Wire Act — was being discussed in the United States Congress, it did not make sense to legalize such gaming. But RAWA appears to be dead in the water in the US Congress, and states like New York continue to need new revenue streams.
