Gambling powers play both sides in New York battle over legalizing new games

Gambling companies want permission to offer New York state residents access into a betting industry already flourishing on the internet. But New York state does not now regulate or share in the revenues from that industry.

There are opponents. And they sometimes form an odd coalition of church groups, who predict gambling addictions will worsen, and gambling companies already operating in New York, who say the state is saturated with wagering.

It makes for a complex maze of players. Consider what happened just this past week:

• • Gambling opponents, including a Protestant minister, met with the head of a gambling group fighting a plan to legalize daily fantasy sports contests.
• • Major casino companies, from Caesars Entertainment to MGM Resorts International, hired lobbyists to push a bill legalizing online poker bets on Texas Hold'em and Omaha Poker. They are whispering that fewer restrictions are being proposed for fantasy sports in the gambling expansion push.
• • A memo went to key legislators, warning that "internet gambling is dangerous for New York families.'' The key player in the coalition that sent the memo is casino magnate Sheldon Adelson, head of Las Vegas Sands Corp.

“

“

One bill would let charities sell raffle tickets online. Another would end a four-year period of state control of a not-for-profit corporation that runs the state’s three premier thoroughbred racetracks

”

The jockeying, hallway arm-twisting of lawmakers, timely donations and media spin are expected to continue until June 16, the scheduled last day of the 2016 legislative session. Those promoting fantasy sports and online poker are besieging lawmakers.

"New York has always been the prize,'' Assemblyman Gary Pretlow, a Westchester Democrat who is chairman of the Assembly racing and wagering committee, said of the gambling industry. He is also the sponsor of legislation that would allow online poker and daily fantasy sports.

Expanding gambling

An assortment of gambling industry-related measures are pending at the Capitol. One bill, for instance, would let charities sell raffle tickets online. Another would end a four-year period of state control of a not-for-profit corporation that runs the state’s three premier thoroughbred racetracks.

And Western Regional Off-Track Betting Corp., which is owned by the counties in the region and the cities of Buffalo and Rochester, is lobbying for a bill to reduce the state tax payments it must make for wagers at its Batavia casino.

But much of the attention has centered on two bills: daily fantasy sports and online poker. The goal is to legalize, regulate and then tax those two areas of wagering.

Daily fantasy sports was soaring in New York until State Attorney General Eric Schneiderman last year ordered its two top firms – DraftKings and FanDuel – to stop.

He argues the contests amount to illegal games of chance, not allowable games of skill as the companies contend. The matter has been in court, but earlier this year Schneiderman and the companies agreed to put the litigation on hold until September. That would allow the fantasy sports industry time to work on a deal with lawmakers and Gov. Andrew M. Cuomo to legalize their contests.

The attorney general is not taking a position on the legislation, a Schneiderman spokesman said .

Industry executives estimate DraftKings and FanDuel have a combined customer base in New York of 1 million people. These fans pay entry fees to play a daily version of the seasonlong contest of putting together fantasy teams based on real players. The contests stretch across the spectrum, from pro football, basketball, baseball and hockey, to golf and NASCAR races.

Legislation began moving two weeks ago through Senate and Assembly committees, and sponsors say they are close to a deal. If the legislation passes, sports companies would be required to pay the state. With the stakes high, DraftKings and FanDuel have hired a small army of lobbyists, including those with long ties to several Senate Republicans, Assembly Speaker Carl Heastie and the Governor’s Office.

And Heastie repeated a line that a string of legislative leaders have uttered over the years about previous gambling bills: While he was not personally a fan of gambling because it can lead “to other ills in society,’’ he believes there is a place for regulating and therefore legalizing fantasy sports. “It’s something that people look more as entertainment, even though it is some form of gambling,’’ Heastie said.

Smaller fantasy sports firms are involved, too, such as Yahoo, with some of their focus over proposed state fees imposed on the industry that DraftKings and FanDuel can afford but wind up pushing smaller competitors out of the New York market.

“Fee structures must be equitable, supportive of competition and avoid building insurmountable barriers to entry into the marketplace,’’ Yahoo wrote in a letter to a lawmaker.