State Assembly approves MMA; bill heads to Cuomo

Gambling. Hand-to-hand combat. Booze.

Gambling. Hand-to-hand combat. Booze.

Who needs Las Vegas when you’ve got New York?

Under the guidance of Gov. Andrew M. Cuomo, a state known for its liberal leanings has been reveling in a less-than-Puritanical approach to public policy over the past several years, legalizing, or easing restraints on, all manner of activities once illicit in New York.

On Tuesday, the state Assembly passed a bill legalizing mixed martial arts, after several years of ignoring pleas to allow the popular and often bloody sport.

New York would be the last state in the country to legalize MMA, as it is known, and will seemingly do so after a passionate debate on the Assembly floor, with supporters promoting its economic possibilities and detractors denouncing the inherent brutality of the matches.

“The truth is we are trying to stop and discourage violence in all these different ways,” said Assemblyman Daniel O’Donnell, D-Manhattan, who opposed the bill. “And then, for this, we just say it doesn’t matter.”

The MMA bill had passed in the state Senate in previous years but had stalled in the Assembly under the leadership of Sheldon Silver, a Lower East Side Democrat. Silver, however, was convicted on federal corruption charges in November, and one prominent critic of MMA, the New York State Catholic Conference, did not lobby against the bill this year.

The bill also had the backing of Cuomo, who put the proposal on his agenda in January.

The passage of the bill comes as the Assembly and the Senate were considering legislation to legalize online poker in New York, perhaps as part of the budget agreement that is due by April 1. And there was the intriguing possibility of even more wagering via computer, after state Attorney General Eric T. Schneiderman announced a partial settlement on Monday with two major daily fantasy sports companies, FanDuel and DraftKings.

As part of Schneiderman’s agreement, the companies agreed to stop taking bets in the state, but such activity could resume if the Legislature acted to legalize and regulate daily fantasy sports. Sure enough, legalization seemed to have prominent supporters in both houses, including in the state Senate, which endorsed addressing daily fantasy sports in its budget proposal.

On the Assembly side, J. Gary Pretlow, a Westchester County Democrat who is chairman of the Committee on Racing and Wagering, said he expected daily fantasy sports to become legal, though with new controls to protect the public.

Cuomo’s office has said he would review any bill to allow daily fantasy sports and online poker, and defended promoting activities like gambling and MMA that might appeal to residents and visitors.

“For decades, New York threw up artificial barriers that only led to New Yorkers and tourists alike spending money out of state,” said Rich Azzopardi, a spokesman for Cuomo. “It makes no sense to actively remain uncompetitive, something this administration has worked to reverse, assessing each issue on its merits.”

Andrew Cuomo, a Democrat, also played a central role in perhaps the most significant expansion of gambling in New York since his father, former Gov. Mario M. Cuomo, brokered gambling agreements with two of the state’s Native American tribes in 1993. (Gov. George E. Pataki signed another agreement with the Seneca Tribe in western New York in 2002.)

In 2013, Andrew Cuomo pushed for passage of legislation — and an accompanying voter referendum — that allowed up to seven new full-scale casinos to rise statewide. Four of those have since been approved; they are in various stages of construction.

The Cuomo administration has also heartily backed the alcohol industry, dating at least to 2012, when the governor hosted what was described as the first wine, beer and spirits summit, which included an afternoon cocktail hour at the Executive Mansion. Since then, Cuomo has made it easier for alcohol producers to operate in the state, including recently suggesting extending new tax credits to craft producers of beer, wine and cider.

Taken as a whole, the state’s embrace of martial arts and roulette wheels is somewhat distinct from traditional “sin taxes,” in that much of the income for the state comes from the companies operating the activities, rather than the people who enjoy them.

In the case of the proposal for online poker, licensed companies would pay a one-time $10 million fee to the state to operate, but the state would not get a cut of the actual betting proceeds. The take in the brick-and-mortar gambling halls, however, is even more substantial: While winners might be subject to income taxes, the state’s initial take is largely derived from fees charged to the individual operators — the state will have received $151 million from three casinos by the end of March — as well as a large chunk of future revenue from slots, and 10 percent from table games.

State Sen. John J. Bonacic, R-Mount Hope, the chairman of the Racing, Gaming and Wagering Committee who is the sponsor of his chamber’s bill on online poker, said the political motivation for the expansion into such gambling was self-evident.

“It’s another revenue enhancer for the state of New York,” Bonacic said Monday.

Despite such promises, some economists remain skeptical of the long-term efficacy of gambling as a revenue source, particularly when there is a saturation of casinos.

Lucy Dadayan, a senior policy analyst with the Nelson A. Rockefeller Institute of Government, said that in general, a sin tax was “very appealing to state officials as it’s an easy source of additional revenue.”

But Dadayan said gambling revenue “slows or even reverses and declines in the long-run, particularly if there is a regional market competition.” Of the five states adjacent to New York, four have legalized state-run casinos or have tribal operations, with New Jersey considering expanding into the northern parts of the state, close to New York City and its millions of potential gamblers.

On the issue of mixed martial arts, the bill passed on Tuesday imposes a tax of 8.5 percent on gross receipts from ticket sales, and 3 percent on broadcast rights on MMA, though the latter is capped at $50,000 per match.

In remarks to reporters Tuesday, Cuomo said that he knew there was “divided opinion” about the sport because of its violence. “But football is violent, boxing is violent, politics can be violent, right?” the governor said. “So I do support mixed marital arts because it’s also an economic generator.”

Such arguments were also heard on Tuesday over the bill, which its sponsor, Assemblyman Joseph D. Morelle, a Democrat from the Rochester area who is the majority leader, said was necessary to “take the sport out of the shadows.”

But several of Morelle’s fellow Democrats castigated the state’s embrace of MMA, which one assemblywoman, Ellen C. Jaffee of Rockland County, called “barbaric entertainment masquerading as sport.”

That sentiment was echoed by O’Donnell, who associated the adoption of MMA with expansions of gambling in the state, asking, “When will it stop?”

He added: “When will we simply say: ‘You know what? We don’t have to go along on with every other state.’ ”

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