Where Does California Online Poker Go From Here After A Promising And Disappointing 2016?

California online poker’s chances for 2016 officially ended on Wednesday, when the legislature did not act on a regulatory bill before adjourning.

That was expected, as issues regarding the bill cropped up before it could come up for a vote of the full Assembly.

Which begs several questions:

• Will online poker be back on the legislature’s agenda again next year?
• What has to change to get the bill passed in 2017?
• Can the bill be passed without compromise on key issues?

Will we see a CA online poker bill in 2017?

Right now, there’s no reason to believe that online poker won’t get another push next year. The bill, despite failing once again, made noticeable progress; perhaps more than in any other single year since iPoker appeared on the legislature’s agenda.

While there is always something that complicates the political process in California in regards to online poker, it is an election year. And the uncertainty for lawmakers that would accompany pushing forward a bill that was not popular with all the politically influential tribes could have played a role in why it stalled.

The biggest stumbling block could be a lack of desire of politicians to push the boulder that is online poker uphill once again.

But a letter to the editor from bill sponsor Adam Gray in the Modesto Bee just a few days from the end of the legislative session does not sound like something written by a politician ready to throw in the towel:

We can continue to endure the status quo, where Internet gambling goes unregulated, untaxed and where no consumer protections exist, or we can try to bring some sense of order to the entire gambling industry in the state. If The Bee deems the current situation to be in the public’s interest, then say so. If The Bee believes gambling should be outlawed, then say that and editorialize for state and local law enforcement to be given the resources to stop it. But stop having it both ways.

It makes you sound like the politicians who promise to cut taxes but expand programs at the same time. The voters, and your readers, are not that naïve.

Still, there is at least a question of whether everyone will go back to the negotitating table in 2017; after all, in some past years very little has happened on the online poker front. But with progress made on key issues — and the amount of work put in on the issue by Gray and stakeholders — online poker getting a serious look next year seems to be in the cards.

What has to change to get the CA online poker bill passed in 2017?

The easy answer, after the bill didn’t move forward: “Something.”

What that “something” is — the magic bullet that will allow everyone (lawmakers, gaming tribes, cardrooms, racetracks and PokerStars) to be on board — hasn’t been discovered yet. If it had, we may have seen the bill passed.

The sticking point throughout the summer — the only major issue of contention (at least currently) — has been suitability of online poker operators. The issue isn’t really that complex — it boils down to a coalition of tribes wanting to make it difficult or impossible for PokerStars to enter the California market.

The bill was amended late in August to make PokerStars to sit out for five years under a “bad actor” provision. PokerStars and its coalition of tribes and cardrooms was having none of that, and opposed the bill as amended, again tipping opposition past the point the bill could pass. (The bill needs to pass by a two-thirds majority in each chamber.)

PokerStars has been willing in past iterations of the bill to pay a penalty to avoid such a “sit-out” period. It’s not clear that it would ever tolerate any such timeout from California, without being able to buy its way out of it.

On the flip side of the coin, there’s no sense that the coalition that includes the Pechanga Band of Luiseño Indians and the Agua Caliente Band of Cahuilla Indians will agree to a bill that doesn’t include a mandatory sit-out period. They have so far opposed bills with “either-or” proposition that allows PokerStars to wait for entrance OR pay not to have to wait.

Is there some sweet spot between the two positions that both could possibly agree to? Right now, that seems unlikely.

Would either side agree to sit-out period of, say, one to three years? That might simply not be good enough for either of them. Such a timeframe is probably not long enough in the minds of the Pechanga coalition, and the PokerStars coalition is unwilling to give others a huge head-start once online poker starts.

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Can the CA online poker bill move forward without compromise?

Short of finding bad-actor language everyone can tolerate, the best bet might be for the bill to move forward without 100 percent agreement on the language.

At different points in 2016, there was a sense that Gray would call the bill for a vote, or move it forward, over the objections of one of the two coalitions. That already happened in a couple of committee hearings when bills were approved.

But the will to test the political sway of the competing coalitions in the full Assembly never manifested. Suffice it to say, Gray and other bill proponents never believed they had the votes, this year, to pass it. (At best, the votes on either side of an up-or-down roll call was to close too call.)

If a compromise on suitability isn’t found in 2017, could the bill actually be advanced over objections of one side or another? That remains to be seen. The two major coalitions seem entrenched, and willing to use their political capital to slow or stop the bill if it doesn’t say exactly what they want it to say.

This year saw the idea of consumer protection for online poker players — a relatively new major talking point in the California debate — surface this year. If this concept gains more traction next year, it’s at least feasible that the bill could be passed over concerns of opposing stakeholders.

Right now, California is both agonizingly close and maddeningly far from passing an online poker bill. But at least the starting point for next year’s online poker bill is closer to the finish line than ever before.