New York Online Poker Bill Sails Through First Senate Committee

Perhaps the third time is a charm? For the third year in a row, a bill which would legalize and regulate online poker in New York has passed a vote of the state Senate Racing, Gaming, and Wagering Committee. The bill, S3898, is now in the Senate Finance Committee.

The bill is about three weeks ahead of its 2017 schedule, which saw it sent to the Finance Committee on Valentine’s Day. Nothing happened from there until May, but the bill did hit a significant milestone in mid-June, when it passed a full Senate vote. It was the then referred to the state Assembly, but it saw no activity and died. The bill was returned to the Senate at the start of this year and now we are at this point.

Hopefully, the bill moves quickly through the Senate, since it had already advanced out of it last year. There is reason to be hopeful, as New York has expanded forms of online gambling recently, passing both a bill that legalized daily fantasy sports and a bill that permits charitable lottery sales online. Certainly, legalizing online poker/gambling would be a more sizeable step, but there are signs that lawmakers are amenable to the idea.

The one unfortunate thing about S3898 is that just before the Senate passed the bill last year, a “bad actor” clause was added:

    (f) Whether the applicant:

    (i) has at any time, either directly, or through another person whom it owned, in whole or in significant part, or controlled:

    (A) knowingly and willfully accepted or made available wagers on interactive gaming (including poker) from persons located in the United States after December thirty-first, two thousand six, unless such wagers were affirmatively authorized by law of the United States or of each state in which persons making such wagers were located; or

    (B) knowingly facilitated or otherwise provided services with respect to interactive gaming (including poker) involving persons located in the United States for a person described in clause (A) of this subparagraph and acted with knowledge of the fact that such wagers or interactive gaming involved persons located in the United States; or

    (ii) has purchased or acquired, directly or indirectly, in whole or in significant part, a person described in subparagraph (i) of this paragraph or will use that person or a covered asset in connection with interactive gaming licensed pursuant to this article.

The goal of bad actor clauses is to punish online gambling operators (and mainly foreign ones) who continued to accept U.S. customers after the UIGEA was passed in 2006. This has been one of the most contentious issues in the year-after-year online gambling battle in California. The Native American tribes in the Golden State hold a lot of clout and want as big of a piece of the online gambling pie as possible; they do not want a site like PokerStars to be able to launch an online poker room in the state.

On the bright side, it seems that “bad actors” aren’t automatically barred from the New York online poker market. The bill’s language appears to simply say that their activities post-UIGEA should be considered with their application.

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