New York Online Poker Clause Concerns PokerStars

new yorkAn amendment to a proposal to legalize online poker in New York may affect PokerStars’ chances of participating in a future market. Lawmakers added a clause this week that features ‘bad actor’ language, meaning that certain operators could be passed over for a license if they broke federal online gambling laws.

The language of the bill reads that New York gambling authorities could stop an operator from applying for a license if that operator “knowingly and willfully accepted or made available wagers on interactive gaming (including poker)” after the introduction of the Unlawful Internet Gambling Enforcement Act of 2006. Since PokerStars continued to serve US online poker players after the UIGEA was enforced, authorities could theoretically pass them over for a license.

The bad actor clause goes on to say that authorities may also stop companies that “knowingly facilitated or otherwise provided services” to online gamblers, as well as those that “purchased or acquired, directly or indirectly, in whole or insignificant part… a covered asset in connection with interactive gaming.” The latter text could refer to Amaya Inc., which purchased PokerStars post-2006, and could potentially block the group’s chances of holding a license in New York’s future online poker industry.

According to Senator Jon Bonacic, the clause was added “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 New York Senate Finance Committee has already approved S3898, and the proposal is waiting to go before the State Senate for a full vote.

The bill seeks to classify specific types of poker games, such as Texas Hold’em and Omaha Hold’em, as games of skill and make them legal in New York under a regulated regime. The New York State Gaming Commission will be given regulatory licensing and scrutiny powers under the new law.

Operators who apply for – and are granted – online poker licenses will need to pay a 15% tax on gross gaming revenue, as well as $10 million for a license fee. Up to ten companies will be granted an online gambling license.

SB3898 also allows for New York to enter into inter-state compacts with other state gambling jurisdictions with similar laws in order to increase player pools.

The newly introduced bad actor clause could negatively impact the proposal’s chances of moving forward. Amaya has contributed vast sums of money to lobby for online poker legislation in New York, and it is highly unlikely that it would support the amended bill.

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