2015 has already seen three states introduce online poker/online gaming legislation, and several more states are expected to follow suit in the coming weeks and months.
In this series I’ll summarize the efforts underway in each state and put on my not-always-properly-tuned prognostication cap and take a shot at handicapping the chances of each of these states passing online gaming legislation, not only in 2015, but also in 2016 and beyond.
First up is California.
Overview of gaming in California
California is one of the oldest states with some form of almost uninterrupted legalized gambling (certain forms of poker have long been legal in the state), dating back to the Gold Rush of 1849.
Draw poker has been legal in the state since it joined the Union, but because of the oddly named games on California’s “banned games” list (Stud Horse Poker) it wasn’t until 1911 that Draw Poker was officially recognized as legal. In 1987 this was expanded to Stud and Holdem poker after card rooms won an appeal against the state that began in the 1970’s.
In 1933 the state legalized horse racing. In 2000 the state expanded gaming even further, allowing casinos to be built on Native American lands in the state.
Past and present online poker efforts
California has taken several cracks at passing an online poker bill, and is still trying, with two bills currently seeking to expand gaming to the Internet.
· AB 9 introduced (pre-filed) by Assemblyman Mike Gatto on December of 2014.
· AB 167 introduced by Assemblyman Reginald Jones-Sawyer on January 22.
· 2009: the California Online Poker Law Enforcement Compliance and Consumer Protection Act (Draft)
· 2010: the Internet Gambling Consumer Protection and Public-Private Partnership Act of 2010 introduced by Roderick Wright (SB 1485)
· 2011: Internet Gambling Consumer Protection and Public-Private Partnership Act of 2011 introduced by Roderick Wright (SB 45)
· 2011: Draft of bill floated by the short-lived California Online Poker Association (COPA)
· 2012: the Internet Gambling Consumer Protection and Public-Private Partnership Act of 2012 (SB 1463)
· 2013: Internet Gambling Consumer Protection and Public-Private Partnership Act of 2013 (SB 51)
· 2013: Authorization and Regulation of Internet Poker and Consumer Protection Act of 2013 introduced by Lou Correa (SB 678)
· 2014: the Internet Poker Consumer Protection Act of 2014 introduced by Lou Correa (SB 1366)
· 2014: Internet Poker Consumer Protection Act of 2014 introduced by Reggie Jones-Sawyer (AB 2291)
It should be noted that none of California’s past attempts have even made it to the floor of the Assembly or Senate for a vote.
As noted above, California currently has two bills to choose from.
The crux of both bills are essentially the same, as they authorize online poker sites run by the state’s brick & mortar gaming interests, but the specifics of the two bills are markedly different, particularly when it comes to two hot button issues: Bad Actor Clauses and the role of racetracks.
Gatto’s bill excludes racetracks and has a strongly worded Bad Actor/Tainted Asset clause. These two concerns make the bill unappealing to both the racing industry (and by extension labor unions) as well as the coalition that has partnered with PokerStars: the Morongo Band of Mission Indians, the San Manuel Band of Mission Indians, Commerce Casino, Bicycle Casino, and Hawaiian Gardens Casino.
On the flip side, Jones-Sawyer’s bill includes racetracks and doesn’t contain a Bad Actor clause. So, while amenable to racetracks and the PokerStars coalition, AB 167 is disagreeable to a coalition of other tribes in California headed by the Pechanga Band of Luiseño Indians that also includes the Agua Caliente Band of Cahuilla Indians, the Barona Band of Mission Indians, the Pala Band of Mission Indians, and the Rincon Band of Luiseño Indians among their 12 member tribes.
Unfortunately, at this point it seems many of the key players in the California gaming industry are of the mindset that no bill is better than a compromise bill, which explains why California is 0-Forever when it comes to passing an online poker bill. Nobody wants to give an inch.
Further complicating matters is the two-front war being waged by three separate interest groups in California, which potentially pits allies on Bad Actor clauses as adversaries when it comes to racetracks.
Even if the tribes manage to hammer out an agreement on Bad Actor clauses, the racing industry and labor unions will still fight against the bill – and California Governor Jerry Brown has indicated he will not sign a bill opposed by the racing industry.
If compromise is reached on racing, but the Bad Actor clause is left unresolved, a similar issue arises.
The good news is California is making progress, and outside forces (namely other states passing online gaming bills) are starting to force their hand. I would bet against California passing an online poker bill in 2015 or in 2016, but it’s not out of the realm of possibility, and due to politics I feel 2015 is a better bet than 2016 when state and national elections will take place.
The good news is, online poker in California seems inevitable at some point.
· Bearish forecast for California online poker in 2015: 10%
· Bullish forecast for California online poker in 2015: 25%
· Bearish forecast for California online poker in 2016: 5%
· Bullish forecast for California online poker in 2016: 10%