New York State Legislature Considering Online Poker Bill

New York State Seal

With calls for expanding online gambling in several states, and legislation introduced at the federal level calling for an online gambling ban, the online poker industry is in the midst of one of the most muddled periods in its history, and it’s only getting more confusing.

In this time of uncertainty we have yet another locale tossing their hat in the iGaming ring, New York, the nation’s third most populous state with roughly 20 million residents.

In a story first reported by Online Poker Report, the proposed New York online poker legislation (titled S 6913) was introduced in the state senate on Friday, March 28, by Senator John Bonacic who represents New York’s 42nd District.

The bill’s first stop will be the Committee on Racing, Gaming and Wagering where Bonacic serves as the Chairman.

The specifics of S 6913

S 6913 is a fairly straightforward piece of legislation that would legalize online poker in New York by amending the current pari-mutuel horse racing laws on the books, adding “certain” online poker games–the bill specifically mentions Texas Holdem and Omaha but also leaves the door open for other approved variants.

In the bill’s own words:

AN ACT to amend the racing, pari-mutuel wagering and breeding law and the penal law, in relation to allowing certain interactive poker games.

The current language of the bill calls for operators to cough up a hefty $10 million licensing fee –an online poker license in New York would be good for 10 years– and pay the state a 15% tax-rate on “interactive gaming gross revenue” on top of the licensing fee.

Interestingly, S 6913 also imposes a 15% tax on unlicensed operators, a clause that will allow New York to potentially prosecute unlicensed providers on multiple fronts including tax evasion.

The knowing and willful offering of unlicensed interactive gaming to persons in this state, or the knowing and willful provision of services with respect thereto, shall constitute a gambling offense under this article.

A person offering unlicensed interactive gaming to persons in this state shall be liable for all taxes set forth in section fourteen hundred five of the racing, pari-mutuel wagering and breeding law in the same manner and amounts as if such person were a licensee. Timely payment of such taxes shall not constitute a defense to any prosecution or other proceeding in connection with the interactive gaming except for a prosecution or proceeding alleging failure to make such payment.

Similarities to New Jersey

New York’s S 6913 bears a number of similarities to the New Jersey online gambling bill that passed in February of 2013, including the tax rate and an accelerated timetable that calls for:

  • immediate enactment of the bill;
  • allowing regulators just 180 days to draft rules and regulations for the new industry;
  • and giving operators just 180 days to procure a license. At the end of this one year period all approved sites would launch simultaneously.

Another similarity is S 6913’s licensing process which requires operators, suppliers, and vendors to apply for licenses.

The many similarities, along with the bill permitting interstate compacts, could indicate a potential partnership with New Jersey is in the works; although this is simply speculation on my part.

Bad Actor clause

One area where S 6913 differs from New Jersey, but resembles both Nevada and California’s proposed legislation, is in regards to its bad actor clause.

The proposed bill bars all sites that operated in the United States after December 31, 2006 (a date that has seemingly become the UIGEA cutoff point for bad actor clauses) from having virtually anything to do with the industry for a yet to be determined period of time.

Sites that fall under the “bad actor” category would not only be barred from applying for a license but would not even be able to offer player databases or even lease their software to a licensed operator.

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