Although California is not likely to see online poker legalized within the state’s borders any time soon, it could be said that legislators and interested parties there are currently trying to achieve this harder than anywhere else around the nation. In fact, efforts date back to 2008 and numerous online poker bills have been introduced ever since, but none of those have come any close to being passed into law.
Last year, four such bills emerged but, as mentioned above, none of them proved to be much of a success. First, Assemblyman Mike Gatto introduced AB 9 in the last days of 2014. It was followed by Assemblyman Reggie Jones Sawyer’s AB 167. Assemblyman Adam Gray’s AB 431 came next. And State Senator Isadore Hall III was the last to come up with an online poker legalization bill in 2015. His SB 267 was to a great extent a copy of AB 431.
Here it is important to note that AB 431 was the first one ever to pass a committee vote. Last year, it was voted in favor of by members of the Assembly Governmental Organizations Committee and the Assembly Appropriations Committee. However, this has been only a smattering of success as the proposed legislation was only a rather short shell bill, lacking in comprehensive specifics.
It could be said that there were three main reasons that have prevented talks regarding the introduction of online poker options within the state’s borders from making any significant progress over the years. In the first place, all involved parties have not managed to build any solid agreement on how exactly the online poker industry would be regulated in California, when and if eventually legalized, as well as whether regulators would be able to oversee it in due manner. Another issue that has been awaiting its solution is what would be the role of the state’s horse racing industry and in what way it would benefit from the launch of online poker in California.
The third pending issue and probably the most broadly discussed one is the potential entrance of PokerStars into the state’s online gambling market. Involved parties have split into rivaling coalitions on whether this should happen. The problem is that some of the bills have suggested that the online card room, which has been banished from the US back in 2011 for allegedly providing online poker options to US-based customers even after the Unlawful Internet Gambling Enforcement Act came into effect in 2006, would be allowed to apply for a license once online poker is legalized.
This, however, has met serious opposition from a coalition led by the Pechanga Band of Luiseno Indians. Over the past year or so the said coalition has been joined by more California-based tribes and other interested parties. Others have left it. What is important here is the fact that it calls for the inclusion of a ‘bad actors’ provision in the legislation that would eventually authorize the introduction of online poker in the state. In other words, all such operators that kept on operating in the States in the post-UIGEA years should be banned from California, according to the Pechanga tribe.
It was only about ten days ago when the latest related legislation was proposed for consideration. Assemblymen Adam Gray and Reggie Jones-Sawyer co-sponsored AB 2863, the full text of which could be read here. And here are only several of the most important provisions included in the bill in very short words.
In terms of licensing, AB 2863 mentions two separate tiers – operators and service providers. Only California-based federally recognized tribes that operate gambling facilities, licensed by the National Indian Gaming Commission, will be able to apply for an online poker license. As for the other tier, all platform providers and marketing affiliates will be allowed to submit an application.
Another important thing to pay attention to is the fact AB 28634 does not have a clearly stated ‘bad actors’ clause or, in other words, it does not address directly the licensure of operators who provided gambling options to US-based players after the UIGEA came into effect. However, the bill says that the California Gaming Control Commission will have the scope to additionally deal with the matter. In fact, under AB 2863’s provisions, it will be exactly the California Gaming Control Commission, together with the California Department of Justice, that will be in charge of regulating the industry, in case it gets regulated.
Although AB 2863 does not provide a comprehensive overview of how exactly online poker would be regulated, it offers certain standards and aspects that would need to be addressed by the above-mentioned two regulators. Under the proposed legislation, those will need to lay out more specific regulations within a 270-day period after the bill’s passage.
An important matter that AB 2863 dwells upon is how much the state’s horse racing industry would receive from online poker. The proposal includes a provision under which the amount of $60 million is to be contributed annually. The money would come both from one-time license fees and tax revenue. If, however, the one-time license fees and tax revenue fall below $60 million, then the total amount collected will be granted.
More information about the provisions included in the bill could be found in the link above. AB 2863 has been introduced to the Assembly and needs to be voted in favor of by two-thirds of its members in order to advance in the Senate. It will have to receive the necessary approval there, too. If the Assembly and the Senate agree on a single version, the legislation will then be presented to California Gov. Jerry Brown.
Although Gov. Brown has not stated openly his support for the legalization of online poker within the state, many believe that if AB 2863 gets the necessary support from horse racing and tribal officials, it would likely be approved by the Legislature and California’s top legislator.
And Assemblymen Gray and Jones-Sawyer’s legislation has indeed gathered some support over the past 10 days. Quite expectedly, the PokerStars coalition voiced staunch support of the proposal. What came as a bit of a surprise was the fact that the coalition, which includes PokerStars and owner Amaya Inc., the San Manuel Band of Mission Indians, the Morongo Band of Mission Indians, as well as Bicycle Casino, Commerce Casino, and Hawaiian Gardens Casino, was joined by the United Auburn Indian Community. It is interesting to note that the latter tribe had previously opposed that same coalition. The California Nations Indian Gaming Association and the Rincon Band of Luiseño Indians also stated their support for the latest online poker to be introduced in California.
It all shows that this year, too, California legislators will be quite busy discussing whether online poker should be legalized. And although this is not likely to happen in 2016, they will probably make certain progress towards its eventual legalization within the state, or at least they will hopefully agree on certain key points.
