Bloodhorse:

NY Lawmakers Hear Views on Internet Poker

New York's racetrack-based casino operators are urging state officials to go slow with any effort to legalize online poker and, if permitted, any internet poker program should be awarded only to the racinos and other land-based gambling facilities licensed in the state.

"We're not here to say this will destroy racing or gaming as it exists. We are saying we should proceed carefully," James Featherstonhaugh, president of the New York Gaming Association, told lawmakers Sept. 9 during a Senate Racing and Wagering Committee hearing.

The hearing was called by Sen. John Bonacic, a Hudson Valley Republican who chairs the committee and is the sponsor of legislation introduced in May legalizing internet poker. The Bonacic bill does not limit online poker licenses to existing brick-and-mortar gambling facilities and it calls for a $10 million fee to be paid by the state in return for a 10-year license. There is no identical bill introduced yet in the Assembly and the administration of Gov. Andrew Cuomo has not yet advanced the issue either.

The racino trade group says New York's track-based casinos, which includes facilities at Aqueduct Racetrack and Finger Lakes Thoroughbred racetracks, provided nearly $900 million in revenue-sharing payments to the state last year and more than $5.5 billion since the first racino opened in 2004. Featherstonhaugh, an Albany lobbyist and part-owner of the Saratoga Casino and Raceway, said the state is the "senior partner" with existing racinos because of that revenue sharing arrangement and that Albany "needs to be aware of and sensitive to protecting" the funds that now flow from the track casinos.

New York is in the midst of an expansion of commercial casinos with real slot machines, unlike the video lottery terminals permitted at the racinos,as well as table games. The state on Sept. 10 is poised to approve regulations governing the operation of the new casinos, which sets the stage for the first three casino licenses to be awarded later this month. The state gaming commission has tentatively identified the first three sites in the southern Catskills, Schenectady, and the town of Tyre, which is located about a half-hour from Finger Lakes. A fourth is proposed for Tioga Downs racetrack, west of Binghamton, and three more licenses will not be awarded for at least several years. The commercial casino expansion was approved in a statewide referendum in 2013.

"We certainly think we should not move forward with online poker or any expansion of gaming until the three authorized and sited casinos... are open and doing business," Featherstonhaugh said.

Bonacic's panel heard from representatives of MGM Resorts International, Caesars, and the Borgata Hotel Casino in Atlantic City. All three provided a similar theme: internet poker is already being played by numerous New Yorkers in an unregulated environment, there is money to be had for Albany in embracing the online game, and state officials should consider more than just poker if it goes the internet gambling route.

"The internet is the future, not just for the gaming industry but for any industry," said John McManus, executive vice president and general counsel at MGM. He said having a "safe and regulated" online poker system in New York "makes all the sense in the world."

Despite introducing legislation to legalize online poker, Bonacic told the hearing's participants that he is still in a fact-finding mode on the issue, and he did not close the door to additional online games or to limiting future licenses for internet gambling to brick-and-mortar casinos and racinos licensed by the state.