Bad Actor Clause Threatens to Stymie Online Poker Legislation in New York

Posted on: June 8, 2017, 02:12h. 

Last updated on: June 8, 2017, 03:06h.

Casino.org Staff Writer Read More
Expertise: Commercial Gaming.

New York state Sen. John Bonacic’s bill to legalize online poker bill was amended this week to include a bad actor clause. To some this seemed a way to make the bill more passable, while others see the amendment as a poison pill.

Sen. John Bonacic’s online poker bill
The Senate has tweaked Sen. John Bonacic’s online poker bill to include bad actor language that could create the kind of stalemate that has crippled online poker’s chances in California. (Image: nysenate.gov)

Senate Bill 3898 seeks to legalize online poker in New York by declaring it a game of skill. The legislation specifically highlights Texas hold’em and Omaha as skill-based variants of poker that should be exempt from certain gambling restrictions.

A statement from the Senator’s office said the purpose of the bad-actor amendment was “to provide the Gaming Commission with the opportunity to take into consideration an applicant’s prior bad acts in relation to determining suitability for a license.”

The statement added that Bonacic was still committed to moving the bill forward, and that the senator was “looking forward to working with his colleagues in the Senate and Assembly to do so.”

PokerStars Penalty

The term “bad actor” refers to operators that continued to serve real-money players in the United States after enactment of the Unlawful Internet Gambling Enforcement Act (2006).

Such language would exclude PokerStars from pursuing licensure in New York, unless the Gaming Commission were to accept the premise that Amaya’s 2014 acquisition of the brand had wiped the slate clean. That’s what worked for Stars in New Jersey, the only American state where the Canada-based company has received a license.

The New Jersey Division of Gaming Enforcement granted PokerStars a license, but only on the provision that Amaya fire several PokerStars and Full Tilt execs who were deemed too close to the old guard for regulatory comfort.

Amaya is a strong lobbying force behind New York’s online poker efforts, and would be unlikely to support the bill in this form. In addition to not being able to be licensed themselves, the current wording disallows Amaya from entering commercial partnerships with potential stakeholders in a future New York online poker market.

California Tribe in New Jersey

Meanwhile, across the bridge in New Jersey, a new online poker operator has jumped into the internet gaming fray. Pala Interactive, founded by the Pala Band of Mission Indians of San Diego County, Calif., launched PalaPoker.com this week in the New Jersey market.

Pala debuted PalaCasino.com in New Jersey in late 2014 and was expected to follow with its online poker offering in early 2015. Those plans were put on hold because, according to CEO Jim Ryan, formerly CEO of bwin.party, his new company expected PokerStars to enter the market imminently. Under such conditions he believed Pala would struggle to compete for liquidity.

Ryan said this week the time was now right to go live, as he anticipates a wave of states will be ready to start regulating online poker soon.