N.Y. Folds on Internet Poker

A bill to legalize online poker in the Empire State easily passed the Senate, but died in the Assembly without coming to a vote. It’s the second consecutive year the lower house failed to join the Senate in endorsing regulation, and the reasons why are no clearer than they were in 2016. Sponsor J. Gary Pretlow (l.) says wait ‘til next year.

For the second year in a row the New York legislature has adjourned without passing a bill to legalize online poker.

As was the case in 2016, Senator John Bonacic’s legalization bill sailed through the upper house by a vote of 54-8 (it passed 53-5 last year) only to die in the Assembly without so much as a debate.

“There was some opposition; we’ll pick it up next year more than likely,” the bill’s Assembly sponsor, J. Gary Pretlow told the New York Daily News as the legislative session wound to a close last week.

It’s possible lawmakers could return to Albany over the summer, with mayoral control over New York City’s schools at the top of the list of unfinished business, but the chance that poker could make it onto the agenda is at best highly unlikely.

This year’s failure was particularly difficult pill for supporters to swallow because the bill passed by a 10-1 vote in the Assembly Racing, Wagering and Gaming Committee, which Pretlow chairs. But then, as it became obvious as the weeks went by, the measure was quickly running out of steam.

The reasons vary. The opening in the last seven months of three of four new commercial casinos may have altered the political landscape, leading some Assembly members to conclude that New York already has too much gaming. It is known that the state’s Indian tribes oppose the expansion of gaming onto the Internet in the face of the increasing competitive pressure they’re facing on the land-based side.

It’s known also that Assembly Speaker Carl Heastie, who was believed to be non-committal, had in fact come down on the opposition side.

Others point to concerns that the bill lacks sufficient consumer protections against cheating and collusion and question the efficacy of technologies to combat underage gambling.

Others blame a lack of common ground on whether poker is a game of skill or an expansion onto the Internet of another game of chance that may require an amendment to the state Constitution.

Similar disagreements are muddying the “bad actor” issue―that is, whether to ban offshore operators that marketed to American players in violation of the Unlawful Internet Gaming and Enforcement Act passed by Congress in 2006.

“I’ve heard they have some constitutional issues and disagreements over the penalties,” Pretlow said of his Assembly colleagues. “Some people say we don’t have strong enough penalties for bad actor, while some people say the penalties are too strong.”

Then there’s Gov. Andrew Cuomo, who hasn’t taken a public stance on web poker to date, but that hasn’t alleviated a feeling rumbling through the halls of the statehouse that he was leaning toward a veto.

This became more apparent last month in the wake of a federal complaint charging former Amaya CEO David Baazov with trying to hide an illegal contribution to Cuomo’s 2014 re-election campaign. Amaya is the parent company of Poker Stars, which was indicted by the U.S. Justice Department in 2011 for UIGEA violations and forced to close down its U.S. operations and accept a steep fine.

Baazov is no longer with the company, but as one of the world’s dominant web poker players, Poker Stars has emerged in the U.S. as the most prominent of the reputed “bad actors” whose presence fuels heated debate in states considering legalization, with some, like New Jersey, welcoming the company, while others, like California, remaining steadfastly opposed.

Coincidentally, or not, a year after Baazov’s alleged illegal contribution was made, Bonacic cut from his bill a UIGEA-related “bad actor” clause that likely would have barred Amaya/Poker Stars from doing business in New York. Then, earlier this month, with Pretlow’s Assembly bill fading fast, he reinserted a similar clause in his Senate version, a case perhaps of too little too late.

But there is a bright side as proponents look ahead to 2018, one of them being that the Legislature no longer wipes the board clean between non-election year sessions, which means that having already passed the Senate and the Assembly Racing, Wagering and Gaming Committee the issues are more likely to be addressed much sooner in the session.