A new California online poker bill has been introduced by leaders of eight tribes. The Internet Poker Consumer Protection Act of 2012 is being supported by the powerful Pechanga tribe and is the second tribe-backed bill to be introduced in the past year.
The new bill contains stipulations that place strict restrictions on the regulation of online poker in the state of California. Under this legislation, California Native American owned card rooms would be the only eligible operators to apply for an online poker license. Furthermore, license applicants would need to establish an online poker business utilizing its own assets and credit. This clause would exclude most, if not all, out of state and international operators from “buying” their way to a license in the manner of 888 in Nevada, and potentially, PokerStars in New Jersey.
The Internet Poker Consumer Protection Act would also require the state of California to opt out of any future federal legislation. This bill would also restrict the ability to increase player liquidity by banning compacts with state and international jurisdictions. A “bad actor” clause is included in the bill to ban operators or related companies from building online poker products in California.
The new bill also has financial clauses that are generally friendly towards the potential tribal operators, especially the controlling powers. Licensing fees would be relatively low and the tax rate would be a modest 10% on gross gaming revenue. Operators would need to have a land based establishment that has been in operation for 5 years in order to apply for a license. Most importantly to the tribes, the great majority of online poker revenues would go to the Native American tribes.
California’s new online poker bill contains protectionist language that provides the greatest benefit to the Native American tribes. Although California boasts a large number of card rooms and poker players among its 27.7 million inhabitants, it has struggled to develop legislation that satisfies the gambling community and the desires of the tribes. Mainly, gambling interests have been unable to agree upon a revenue sharing structure and online poker licensing regulations.
The constant struggle to develop a suitable and agreeable legislation in California has led to several failed bills and the introduction of clashing, simultaneous bills. The new bill will be the third one in circulation with Senator Wright’s and the San Manuel tribes’ potential legislations. Senator Wright’s bill would provide a more lenient stance on operators in California and leaves the possibility of a federal bill and online poker compacts.
The San Manuel tribes’ bill has similar language and stipulations to new bill. Sources have stated that the two bills may be combined in order to gain more support, although the COPA consortium was disbanded due to online poker disagreements. Nevertheless, all tribes have voiced strong opposition to the Wright Bill that would essentially allow racetracks to participate in online poker and force tribes to relinquish sovereignty during the licensing process.
California is currently feeling pressured to pass a bill in the near future with neighboring state, Nevada, already in operation. Some predict that new legislation will be passed before the end of the year, but a 2014 time table seems to be more reasonable at this point. The new tribal bill will also face some issues in the Senate Governmental Organisation Committee that will oversee the new online poker legislation. Currently, Senator Wright chairs this committee and is committed to pushing his bill through the state government.