Online Poker on Agenda When California Legislature Reconvenes

December 31, 2011
Online Poker on Agenda When California Legislature Reconvenes

California is a state desperate for solutions to their financial problems. With the recent clarification of the Wire Act by the US Department of Justice, California is looking at legalizing poker and other forms of gambling as a way to bring revenue into the state.

Lawmakers reconvene on January 4th and will begin work on several issues, including a bill that would legalize online poker in the state. The bill, SB40, was submitted by state Senator Lou Correa. Another bill, SB45, would allow both online poker and other forms of online gambling. SB45 was authored by state Senator Rod Wright.

Both bills have their strong points. If pass, SB40 would bring California up to $250 Million in revenue immediately as it would require an upfront payment from online poker operators. Over 10 years, SB40 is projected to create more than 1,300 jobs in the state and produce over $1.4 Billion in revenue.

SB45 is the bill with the greatest upside for the state, but also the one that is heavily opposed by certain groups. This bill would authorize three operators and the state would receive 10 percent of the operators gross revenue. Over eight years, the bill could produce between $2.4 Billion and $6.1 Billion in revenue. The downside to SB45 is that the early forms of the bill were opposed by both California card room and Indian tribes.

Sen. Wright also heads the Governmental Organization Committee and they plan hearing during January with the intent of advancing a bill. According to reports by bill supporters, there are at least 1.5 Million players playing online poker in California. If true, this would easily make California the largest potential online poker market the state.

California Senate President Pro Tem Darrell Steinberg provided perhaps the most open minded view about the potential bills. He said, “I’m not a huge fan, but if there really is the potential for hundreds of millions of dollars for education, higher education, health care, then I’m open to it.”

If California adopts online poker regulations, they would become the second in the nation to do so after Nevada approved online poker regulations this past Thursday. The market should prove appealing to operators should the bill pass due to the potential number of players, and numerous online pros would once again find a place to play. With the close proximity of California to Vegas, you may even find some online pros pickup a “second home” in the state to help pad their bankroll.

Granted, concerns raised by state card rooms and Indian tribes will have to be addressed before any legalization progresses. Seeing the deep economic crisis that the state faces, players may very well see online poker legalized in the first half of 2012.

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