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Chances of Online Gambling in New York Fading

Posted on by John Lathram

New YorkWith just over a week remaining in the legislative session, the chances of regulated online gambling in New York getting the green light this year are fading.

Yesterday, the New York Gambling Commission held a public meeting to finalize the regulations for sports betting at the state´s commercial and tribal casinos. As widely expected – and despite objections from multiple sources – only in-person sports betting will be allowed due to the failure of the legislature to pass proposals that would allow regulated online gambling in New York.

This is sad news for proponents of regulated online poker, who were hoping Senator Joseph Addabbo´s “Interactive Gaming Bill” would get piggybacked onto legislation authorizing mobile sports betting. However, due to fears about breaching the constitution, cannibalization, and problem gambling, it looks as if regulated online gambling in New York will be off the table for another year – at least.

Same Old Issues. Same Old Inaction

The issues of the constitution prohibiting an expansion of gambling, the cannibalization of New York´s under-performing casinos, and problem gambling have been concerns for years – yet nothing gets done to address them. Here´s a brief snapshot of the past few years of inaction.

In 2014, former Senator John Bonacic introduced his first bill to regulate online poker. Acknowledging it would require a change to the constitution in order for his proposed expansion of gambling to be successful, rather than push for the measure to be included on the ballot paper, he attempted to reclassify poker as a game of skill in order to circumnavigate the constitution.

This ploy was used in 2015 so the state could regulate Daily Fantasy Sports. However last year a judge ruled the state had no authority to reclassify Daily Fantasy Sports as a game of skill. So, even though New Yorkers can still play Daily Fantasy Sports, it is technically illegal. A ballot would have resolved the issue by now – possibly in favor of the proposals if sold to the electorate effectively.

With regards to the cannibalization of the New York´s underperforming casinos, the reason the state´s commercial casinos appear to be underperforming is unrealistic expectations. To say the projected revenues were over-ambitious would be an under-statement; and although it is a natural instinct to believe more gambling opportunities would reduce casino revenues, the facts prove otherwise.

Finally, even though unregulated online sports betting is widely available and New York was ranked as joint 43rd in a nationwide survey of the percentage of adults with gambling disorders, legislators are not convinced an expansion of gambling will not create more problem gamblers. However, a proposal to study problem gambling in New York has sat on the shelf of an Assembly Committee since it was introduced in January, as did previous proposals in 2015 and 2017.

Is It Not Too Late for Something to Happen?

It´s not too late for there to be some last minute legislative action, but given the above issues, the fact that the Gambling Commission has now finalized the regulations for sports betting, and the fact that the legislative session for 2019 ends next Thursday, it seems unlikely. Speaking with the New York Daily News last Thursday, Assemblyman Gary Pretlow said: “We are running out of time and the governor has still not said ‘I want to do it,’ and I think that’s the signal people are waiting for.”

On the same day, Senator Joseph Addabbo told the New York Post that although in-person betting was currently the Gambling Commission´s preferred option, it wasn´t necessarily the end of the road for online gambling in New York. “It´s a good thing”, he said, “as long as the door is open for discussion”. However, whereas both lawmakers remain optimistic, Governor Andrew Cuomo has said that state-sanctioned online gambling in New York would be illegal without an amendment to the constitution.

The conclusion is that, yet again, New York is going nowhere with online gambling. It´s had the time to sort out the issues, and it´s had the encouragement from neighboring states who have collected millions of dollars in tax revenues. Possibly the state is scared of repeating the mistakes it made with regulating commercial casinos; possibly the state is nervous of upsetting anti-gambling interest groups. Who knows? The only thing we do know for certain is that whatever chances there are for regulated online gambling in New York this year are fading fast.

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