New York Senate Racing Commitee Plans Meeting to Discuss Online Gambling

John Bonacic New York Senator__1396399898_72.24.86.243

John Bonacic Dropped the Bad Actor Clauses from Senate Bill 5302 in Mid-May 2015

The New York Senate Racing, Gaming, and Wagering Committee has planned a September 9 meeting to discuss the advantages of legalized online poker. Such a meeting would discuss a poker-only Internet gaming bill.

The proposal being discussed is S5302, which was written and sponsored by State Senator John Bonacic. The senator’s bill will be discussed in detail, with attention paid to the revenue figures produced by New Jersey in its first two years of online gambling.

Bonacic Gaming Bill

There is some discussion that the discussion of New Jersey’s gaming figures might lead some senators to suggest amendments to the Bonacic bill. In particular, senators might suggest legalizing and regulating online casinos, as well as the poker rooms. In all cases, the various casinos and racinos of New York likely would be given the right to open their own gaming portals.

New Jersey’s revenue totals are important, because they should give New York’s lawmakers an idea what their own possible figures should look like. New York state has a population which is just over twice the size of New Jersey’s population.

How New York iPoker Would Work

One might think New York’s poker site revenues would therefore be roughly twice the size of New Jersey’s. Due to the nature of online card rooms, such figures are not likely to be so simple. New York online poker rooms should generate more than twice the revenue stream of the New Jersey sites.

The more people who play in an online poker community, the better the site is. Saturday and Sunday events with guaranteed millions can be offered. Because player pools are increased, so are prize pools. Larger prize pools naturally draw more gamblers willing to bet, so the site’s revenues grow faster over time.

Online Card Playing Circles

Also, poker sites need to offer several variations of poker, such as Texas hold’em, Omaha, and seven-card stud. Gamblers enjoy various styles of play, including turbo events, heads-up contests, satellite events, large tournaments, and ring games. These various contests need to be staged at various betting limits, for low rollers, mid-stakes players, and high rollers.

Add the many variations together and you need a lot of gamblers on a poker site to make it enjoyable. Bigger states naturally have an advantage, so their poker communities should generate an exponential, not a straight line, revenue stream. What New York’s poker scene might generate is still left to debate.

Much-Needed Tax Revenues

Whatever the case, the inclusion of online casinos would increase the tax revenue generated by a wide margin. In New Jersey, the ratio of online casino revenues to online poker revenues is 80% to 20%. While that ratio would not hold in New York, it’s safe to say the poker revenues never would represent more than one-quarter to one-third of the total revenue stream.

In light of that, it is likely that the senators would opt for a comprehensive gaming bill with both forms of Internet betting. Bonacis therefore might be putting up a trial balloon, but might be convinced to expand gambling on the Internet.

Protecting the Land Casinos

The reason legislators like John Bonacic would not want Internet casinos is the competition against local venues, which are (rightly) seen like they are local businesses which should be protected, in order to protect jobs. Last year, New York expanded its brick-and-mortar casino industry by 3 casinos. The reasoning goes that those land-based businesses would not want to compete for customers while they are building large scale land-based casino locations.

Of course, the licensed land casinos would be the operators allowed to offer online gambling, if the regulations followed every other iGaming bill in the United States. The online product might be seen as a supplemental to the offline gambling. Casino developers might not be willing to incur the startup costs of iGaming while they are building expensive land casinos, though.

John Pappas to Appear

John Pappas of the Poker Players Alliance is set to be one of the speakers at the New York State Racing Commission. The assembled senators will need to consider every facet of the Internet gaming business before legalizing such an industry: economic advantages, tax revenues, startup costs, and social costs.

While speakers informing the committee about problem gambling are likely to speak, John Pappas is likely to discuss one big advantage legalized gambling bring to local communities. Illegal gambling is a major blight on American society. Poker and casino games are driven underground in the online and offline gaming communities. When they are, no regulations exist to protect problem gamblers and underage gamblers. No help lines or self-exclusion lists are offered, so many continue their destructive habits in an underground form, far away from the light of society.

Those who follow such deliberations at the federal and state level recognize the timeworn arguments on both sides of the debate. On Wednesday, September 9, the senators of New York will engage in one of those debates.