It has been three years since the triumvirate of states – Delaware, Nevada and New Jersey – broke with the norm and passed legislation regulating online gaming and/or poker inside their borders. Since that time, however, there hasn’t been any other states that have come forward to join the Original Three. There has been plenty of discussion on the subject from other states, but there hasn’t been that huge breakthrough as of yet. So who will be the next one to pass online poker and/or gaming for their state’s citizens?
Don’t Look for it in 2016
As much as you hear certain pundits say that we are thisclose to passing online poker legislation in another state, don’t even listen to them. In a Presidential election year, there is little to no subsistent legislation that is passed and there is absolutely zero legislation passed on what are considered “hot button” issues. The reason? Legislators don’t want to give any ammunition to opponents that they might use against them in a primary or general election. While we may look at online poker as something that isn’t controversial, it isn’t that way in the “real world.”
Think of the Republican legislator that, faced with a strong candidacy from an opponent who is looked at favorably by religious organizations, has to be careful what his votes appear to say he supports. Online gaming – hell, gaming of any type, to be honest – is something that religious groups come out vehemently against (despite that paradox of “Bingo Night” …but that’s best for another time). As such, said Republican isn’t going to look towards the regulation of online gaming for fear of offending a sizeable part of his constituency.
It doesn’t get any easier for a Democrat, either. In many cases for certain Democrats, lotteries and casinos are viewed as a “predatory tax” on the poorer members of society. Especially if a Democrat is too close to the gaming industry, it is an attack point that an opponent can use against them, keeping the Democrat potentially from fully supporting legislation in an election year.
With this firmly established (it’s not happening this year, folks), let’s look at four contenders for the crown of “the next state to pass online gaming and/or poker regulation.” Those four are California, Pennsylvania, New York and “the field.”
#1 point that should be made at iGaming hearings in general is that prohibition doesn't work. Plenty of history there. Regulation does work.— Adam Small (@AdamLoebSmall) May 11, 2016
California: You’d Think Best, But…
There has been talk in the Golden State of passing online poker (yes, here it is just poker, but full casino gaming “is possible”) since the mid-2000s. The problem with the state of California is that there are too many entities that have to be satisfied in the mix: the powerful Indian tribes that have full casino gaming, the card rooms that can only offer poker and card-based table games, and horse racing tracks that have poker rooms to supplement their earnings. Since the talks began in the 2000s, there has NEVER been an agreement between these three as to how to move forward.
The Indian tribes believe that, the way California law is written, they should be the only ones allowed to open online operations because they offer full casino gaming. The card rooms believe they have a right because they were authorized to spread poker (going back to the 1930s) well before the Indian casinos were even a thought. The racetracks are basically looking to pull any money they can to sustain their operations and believe they should have a right to get in on the action. With this infighting, it is stunning that they even can come to the table together, let alone discuss the situation.
Then there’s the governmental situation. Bills have been proposed on several occasions, but it is only in the past couple of years that they have received any hearings or committee votes. Even these committee votes, however, are little but a “show” vote. Actual legislation has NEVER come before either branch of the California General Assembly for a vote, even after the legislation passed out of committee in 2015 and earlier this year.
With this said, there are hopes that California could pass some sort of online poker regulation by the end of 2017 (and that is the earliest that something could happen, according to many industry insiders). It might be the best bet, but it is probably no more than a 2-1 proposition at best.
New York and Pennsylvania: All Sizzle, No Steak
These two states are put together because they have consistently teased online poker/casino advocates as the “next one” to join the Original Three. But that is what it has been to this point; if there’s ever a case of all sizzle and no steak, these two states would take the award.
For the past three years, New York Senator John Bonacic has proposed online poker legislation in the New York Legislature but, for the first two years, that was all it was…a proposal. Bonacic admitted as much himself in both 2014 and 2015 that the legislation was purely to start a discussion on the subject and not a serious effort to get anything passed. In 2016, there has been an inching forward, but there’s still no substance to the efforts.
In February, the New York Senate Committee on Racing, Gaming and Wagering (of which Bonacic is the chair) passed through Senate Bill S5302, raising hopes for online poker players. The bill was forwarded to the Finance Committee, who would put the bill towards the New York Legislature, but that didn’t stop some from including the revenues raised by online gaming (full casino) in some budgetary proposals. Those were quickly pulled, however, and S.5302 continues to languish in legislative purgatory.
There are similar situations in the state of Pennsylvania. Facing serious constrictions in their state budget and few ways to increase revenues, Pennsylvania State Senator John Payne proposed HB 649, a bill that would authorize full online casino gaming in the state. In November 2015, it was passed through the House of Representatives’ Gaming Oversight Committee and seemed to be an integral part in what have been contentious budget debates in the Keystone State in 2016. Just as the momentum grew, however, it was quickly dashed; although the budget talks are still ongoing, online gaming and poker has been removed from the discussion.
These two states have constantly teased supporters that they might do something and, while they have gotten as far as California has (in a shorter time frame, it must be said), there doesn’t seem to be the stomach to even broach the issue until 2017 at the earliest. Let’s put 10-1 odds on these two passing regulation by the end of 2017.
The Field: The Best Hope
For all the action in the three states mentioned above, it is some “outsider” that might swing in and make a big change in the game. The state that many are looking at currently is Michigan, who just recently jumped into the action. State Senator Mike Kowall introduced a bill in the Michigan Senate, Senate Bill 889, in April and, just last week, the Senate’s Regulatory Reform Committee held a 90-minute hearing on the subject of online poker (the bill would regulate only that industry). These acts are no further than anyone else has gone of late, but Michigan wasn’t even on the radar earlier this year. “The field” is the one to watch, with an even-money shot at some state passing online gaming/poker regulation by the end of 2017 (other states to look at: Connecticut, Illinois and Massachusetts).
Don’t be beguiled by those that say “legislation is right around the corner” because it isn’t happening in 2016. At the close of this year, unfortunately, many of the legislative efforts discussed above will “die” at the close of their current legislative sessions if no action is taken. Ergo, we’ll have to start the same song and dance in 2017…but hopefully with a bit more momentum than we’ve previously seen.