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California "Bad Actor" Constitutionality Questioned

A leading expert in the area of constitutional law has expressed his opinion that the bad actor clauses found in online poker bills proposed in California that aim to keep PokerStars out violate the U.S. Constitution.

Laurence H. Tribe, a renowned professor at Harvard University Law School who has assisted in shaping the constitutions of other countries and has authored a treatise on American Constitutional Law, analyzed two pending bills before the California state legislature and found both to be in violation of the rights of PokerStars.

AB 2291 and SB 1366, proposed by Assemblyman Reggie Jones-Sawyer and Senator Lou Correa, respectively, include bad actor language that “legislatively determines guilt and inflicts punishment upon an identifiable individual without provision of the protections of a judicial trial,” Tribe stated while citing the constitution’s Bill of Attainder.

Though PokerStars did continue catering to the U.S. market following enactment of the UIGEA in 2006, the legality of doing so has yet to be determined in a court of law. The industry giant consulted legal experts after the Bush administration approved the UIGEA and retained counsel gave the green light to remain in America although other gaming companies chose to leave.

Professor Tribe also took issue with two other areas within the bad actor language, namely the fact that PokerStars’ property is deemed off-limits and that the cut-off date set for leaving the U.S. market (December 31, 2006) is both discriminatory and arbitrary. The former is cited as a constitutional violation according to the Takings Clause, while the latter pertains to the Equal Protection Clause.

The two pending bills have recently been joined by another proposal written by a coalition of 13 Indian tribes. While the latest measure has not been formally introduced, bad actor language designed to prevent PokerStars from participating in California’s online poker scheme is included.

Several months ago, PokerStars joined forces with the state’s three largest card rooms and the Morongo Band of Mission Indians to provide online poker to Californians if and when a statute is enacted. Just last week, the industry behemoth was sold to the Amaya Gaming Group for $4.9 billion in an effort to ease entry into a regulated U.S. market that may one day boom after more states approve online poker and gambling legislation.

While the deal was seen as favorable by New Jersey gaming regulators for PokerStars to enter that marketplace under new ownership, the situation is somewhat different in California where bad actor language includes PokerStars’ software. Many issues remain before California lawmakers get down to the task of approving ipoker regulations and time is running out in the 2014 legislative session with just a couple months to go.

Tribe’s opinion seemingly gives PokerStars a few more outs with regard to challenging the constitutional legality of the bad actor provisions as written in the pending proposals. The PokerStars/Morongo/cardrooms contingent has vowed not to muck its hand and the matter will likely reach the showdown stage, whenever that may be.

 

 

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Charles Rettmuller

Charles has been an avid poker player for a number of years, both live and online. He holds a degree in journalism and previously worked as a reporter for a Chicago-based newspaper. Charles joined the PokerUpdate team in early 2012 and writes daily news articles for the site.

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