California’s online poker bill, AB 2863, cleared another legislative hurdle after passing an Assembly Appropriations Committee vote on Wednesday.
Committee members were expected to cast their votes on the proposed legislation last week but the vote was postponed. Certain amendments to the bill were proposed back then and yesterday’s version of the proposal included those.
The said changes concerned the highly discussed ‘bad actor’ clause, under which online poker operators that provided their services within the state after the federal Unlawful Internet Gambling Enforcement Act was passed in 2006 should be banned from operating in California. Under the bill’s latest version, such providers would be allowed to offer Internet poker options only if they pay the amount of $20 million added to the original licensing fee or wait for five more years to apply for a license.
Another important amendment to AB 2863 calls for such operators to be banned from using accrued assets, including player lists.
In order to be allowed to operate within the state’s borders, interested online poker operator will have to pay a deposit of $12.5 million. Under the proposed legislation, half of the deposit would be offset by a reduction in gaming revenue taxes.
Speaking of taxes, 10% of the tax revenue would be contributed to the California General Fund no matter whether the originally proposed $60-million annual contribution to the state’s horse racing is reached.
The Wednesday version of the proposed legislation will probably not be its final one. Appropriations Committee members voiced certain concerns that will likely be addressed by sponsor Assemblyman Adam Gray before the bill moves to the full chamber. According to some legislators, the $20-million bad actor penalty was too low. Others were still concerned about the unfair use of accrued assets.
Although AB 2863 has made a historical progress over the current legislative session, its future is still far from being clear. The bill needs a two-thirds majority in order to pass the Assembly and given its hardships so far, this would not be an easy task. In addition to this, a tribal coalition led by the Pechanga Band of Luiseño Indians and the Agua Caliente Band of Cahuilla Indians will likely keep on giving the proposal a hard time.
The coalition formed by six California-based nations is in staunch opposition to poker operators that breached UIGEA, with PokerStars being among those, being allowed to operate in the state. As tribes have pointed out themselves, only full ban on licensure of such operators would appease them.
