Hope For California Online Poker Ramping Up Again With New Bill

February 22, 2016
Hope For California Online Poker Ramping Up Again With New Bill

Online poker appears to be on its way to getting yet another look in California in 2016 — what might be the most serious attempt to regulate iGaming in the state to date.

The new online poker bill, now on deck

Despite years of discussions about online poker in California, there has been precious little progress to be shown for it. But recent chatter — and the introduction of an entirely new bill — makes it look like lawmakers and gaming interests will take at least one more stab the idea of regulating and legalizing online gambling.

First, draft legislation was floated last week. Quickly on the heels of that, the new bill — AB 2863 — was formally introduced on Friday by Assemblyman Adam Gray and Assemblyman Reggie Jones-Sawyer.

That effort appears to be aimed largely at appeasing horse racing tracks in the state, who have wanted all along to have the ability to offer online poker effort in the state.

A closer look at the new bill

The new legislation is not necessarily reinventing the wheel; it largely builds on previous legislative efforts in the state.

The biggest part of the proposed legislation is language that would give up to $60 million annually to the horse racing industry in exchange for not being operators in a regulated online poker market. That money would come from a combination of licensing fees and tax revenue.

Other provisions and items of note in the bill:

  • Operators are limited to California Indian tribes already operating gaming in the state and card rooms; or a group that has at least one of the previous two groups represented.
  • Licensing fees and taxation of gross gaming revenue are left up in the air for the time.
  • There does not appear to be a “bad actor” clause, meaning PokerStars could likely operate in California, should the bill pass.
  • State agencies are directed to come up with additional regulations in a time period of less than a year after the bill is passed.

What are the chances this time around

The bottom line is that nearly everyone in the state — lawmakers, tribes, cardrooms and tracks, and the people of the state itself — want there to be legal and regulated online poker in California.

To date, the biggest problem has been how to make all of those varied interests happy in order to pass a bill that everyone can live with. The bill represents progress toward that end, but it’s still not immediately clear that everyone is on board.

  • Will horse racing take the subsidy? The facts and common sense say they should, but they’ve been resistant to giving up the ability to be an operator.
  • Will the $60 million figure survive, and is it realistic? Most observers agree that that figure is a “pie in the sky” number. Was the number designed just to get the tracks to the table, and what realistic figure would they be willing to take?
  • Is the “bad actor” debate really over? While the bill doesn’t appear to keep PokerStars out of California, it’s been evident that some tribes that have opposed their ability to operate in California are holding onto that position. Has it softened, or is this still a point of contention that needs to be resolved?

There are still a lot of questions that need to be answered before online poker becomes a reality in California. The good news? Stakeholders are still trying to answer them and get to a regulated environment, instead of giving up.

editorial: Aaron Kohr / Shutterstock.com

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