Let’s state the obvious: California is one of the states in which the legalization and regulation of online poker would be most beneficial. The large population, the poker culture evidenced by poker rooms located throughout the state, and its many tribal casinos all add together to create visions of big Internet poker numbers, not to mention its influence on other states in the market.
The timeline of California online poker efforts is a confusing one, complete with numerous bills introduced, hearings held (some encouraging, others not so much), hearings cancelled, bills dying, and special interests constantly debating the makeup of an eventual online poker industry. Hopes have been raised and dashed so many times that most poker players and fans have largely given up on the idea becoming a reality any time soon. If it does happen, it will be a pleasant surprise.
However, those groups wanting online poker in California have not given up. And the Poker Players Alliance is tuned in to the legislative actions, continuously pushing for compromise and positive bills for the game of poker.
Early 2016 Happenings
There seemed to be a renewed vigor among legislators, tribes, and other interested parties as 2016 began. A joint committee hearing was assigned for online poker within the first week of January to discuss Assemblyman Reginald Jones-Sawyer’s AB 167, though the January 6 hearing ended up solely focusing on daily fantasy sports and ignoring online poker.
That prompted statements from parties like Amaya, organizations like the PPA, and a press release full of especially strong words from the California Nations Indian Gaming Association (CNIGA). Assemblyman Adam Gray made the promise of a new hearing by the end of January, but that never happened, either.
February kicked off with whispers of combining DFS and online poker in order to piggyback on the support that legislators expressed for legalizing fantasy sports. That never happened.
Less than two weeks into the month, Assemblyman Gray met with leaders of numerous California tribes, though there was no concrete agreement that came from that meeting regarding a new bill that could be filed before the February 19 deadline. However, that meeting led to new speculation, that of a subsidy to be paid to the horse racing industry in California to placate and remove them as a barrier to online poker bill passage.
Days later, a draft of Gray’s AB 431 finally emerged, weeks after it was filed on January 20. At this point, details of the aforementioned subsidy came to light. To satisfy the horse racing industry, the bill proposed that 95% of the first $60 million collected from operators’ gross gaming revenue would be given to the horse racing industry, and an annual payment would then follow.
The Last-Minute Bill
Just as February 19 was going to pass without the introduction of new online poker legislation, Gray filed a bill. AB 2863 was a last gasp to keep up the momentum from January and early February. Tribes and legislators had worked hard to compromise, and Gray came through with a last-minute bill, loosely based on AB 431 mentioned above.
Per Online Poker Report, the subsidy for the horse racing industry is a big part of the bill and will be derived from the licensing fees and tax revenue. However, those fees and taxes are not outlined in this bill. The previous bill set the costs at $15 million for licensing and a 15% tax on gross gaming revenue, but those numbers are no longer specified.
Also missing is a bad actor clause, but that is not a great surprise as it did not appear in the last bill, either. Details of regulations are absent as well, as the bill seems to leave that to the discretion of the California Gaming Control Commission after the legislation passes.
New in this bill is a list of the types of games allowed. Operators will be able to offer most kinds of online poker, but a specific exception is made for games of chance dressed up as poker, which may refer to games like PokerStars’ Spin & Go lottery-style action.
More interesting wording in AB 2863 is the outlawing of online poker cafes, as well as the ability to play on unlicensed poker sites. In fact, anyone playing on unlicensed sites will be committing a felony and could be prosecuted, as could the unlicensed sites catering to players in California.
It is unclear what the next step is for AB 2863. Interested parties must be supportive in order for Gray to push it forward in the legislature.
Thus far, there is some support.
Rincon Chairman Bo Mazzetti issued a statement on behalf of his tribe, noting the “open and honest dialogue this year” that led to this bill. “Paramount to any gaming legislation is the protection of children and the vulnerable; California job creation; revenue generation for state services, and consumer protection. AB 2863 expands upon all of those ideals. We support Assemblyman Gray’s efforts and look forward to getting this done in 2016.”
CNIGA Chairman Steve Stallings Supports Principles behind Assemblyman Gray's Internet Poker Bill https://t.co/eIzqCEDhUN— Victor Rocha (@VictorRocha1) February 22, 2016
CNIGA Chairman Steve Stallings issued a press release to express the group’s support. In part, it reads, “CNIGA issued a set of Internet gaming principles to meet the changing times. The principles include establishing consumer safeguards, protecting children and preserving Tribal sovereignty. It appears that Assemblyman Gray’s AB 2863 meets those stated principles and we are supportive of Assemblyman Adam Gray’s efforts to allow gaming Tribes the option to adapt to the changing technology. CNIGA looks forward to working with the Legislature to ensure meaningful legislation is passed.”
Poker players and fans now wait to see if the momentum continues.