Amendments In Store For California Online Poker Bill

Gatto To Amend California Online Poker Bill, Drop In-Person Registration Requirement

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California’s latest attempt at regulating online poker – Assemblyman Mike Gatto’s AB 9 – is set to undergo significant revisions.

Gatto today announced plans for a “first set” of “proposed amendments” in a press release (copied in full below).

The amendment text is not yet available.

The full text of the bill as originally filed is available here. Per Gatto’s office, the amendments will not appear in the bill text until the bill is referred for a hearing.

Gatto spoke at length to OPR about his plans for online poker in California in an exclusive interview last month.

Live registration requirement primary focus of changes

The major change appears to address the requirement set out by AB 9 that customers register for an online poker account in person at a facility operated by a tribal casino or card room.

“After meeting with security experts and hearing from poker players and industry professionals, I have concluded that online poker would be best served by making in-person registration an option rather than a requirement,” said Gatto.

Players will still have the option to register in person.

Gatto further suggested that he is considering adding other requirements – such as an annual tournament – that will help to ensure online poker drives foot traffic to land-based facilities.

Bad actor approach apparently remains as-is

The announcement from Gatto’s office makes no reference to the so-called “bad actor” issue – attempts to legislatively bar some participants from California based on past activity in the U.S. – that has divided the state’s gaming interests.

PokerStars and their California partners called AB 9 “a rehash of previously unsuccessful proposals” despite the fact that the bill seems to offer a new glimmer of hope for the online poker giant.

But however you read Gatto’s approach to the issue in AB 9, it does not appear that said approach will be altered by this round of amendments.

Additional sanctions for unregulated operators also on table

Gatto is considering a twofold approach to beefing up measures aimed at undercutting the unregulated market:

  • Making offering online poker without a license a felony.
  • “Offering additional resources” to California law enforcement in order to enforce the new offense.

It’s unclear what specific resources would allow California officials to impact offshore sites, which have continued to operate – and in some cases, flourish – in the U.S. market post-Black Friday.

Text of announcement from Assemblyman Gatto’s office

SACRAMENTO – After two months of meetings with experts in technology, security, and online commerce, Assemblyman Mike Gatto (D-Glendale) announced today the first set of proposed amendments to his California online-poker bill.  “My goal remains creating a sensible framework for a new California industry,” said Gatto.  “That will involve a thoughtful process of consultation with all of the key stakeholders.  I pride myself in listening; I expect this process will continue throughout the year.”

The legislation, AB 9, would establish a regulatory structure to provide all participants, from players to website operators, with certainty and security that will legitimize the game, support locally owned businesses, and keep much-needed revenue in the state. “The status quo is a lost opportunity,” said Gatto.  “Californians already participate in online poker, but send their dollars overseas.  By regulating and legitimizing this industry we will increase security, protect business owners, and keep our money here in the Golden State.”

This set of amendments most notably addresses the in-person sign-up requirement of the original version of the legislation.  Rather than require players to register at a brick-and-mortar establishment, AB 9 will be amended to make in-person registration optional for players. “After meeting with security experts and hearing from poker players and industry professionals, I have concluded that online poker would be best served by making in-person registration an option rather than a requirement,” said Gatto.  “State of the art technology currently used by operators in other states when registering players accesses many of the same databases used by financial institutions to verify the identity of registrants and prevent fraud.”

Giving players the option to register in person will still generate foot traffic and provide business to brick-and-mortar operators, while giving players the greatest flexibility in making transactions.  Gatto is also considering ideas to require a new annual tournament that will drive players to existing brick-and-mortar establishments.

In addition to that amendment, Gatto is considering raising the sanctions against the operators of unauthorized online poker operators, making it a felony for those who illegally offer real-money games to players in California, and offering additional resources to the Attorney General to enforce the new regime.  Any amendments will appear in print after the bill is referred to its first committee for a hearing.

“California has led the world in computer and Internet innovation, including online security and screening, and there is no reason why we can’t lead with a sensible online-poker framework,” said Gatto.  “These amendments are derived from time-tested business practices that have received significant support from stakeholders.  Lawmakers should listen to feedback from experts as they seek to form sound public policy.”

- Chris is the publisher of Grove also serves as a consultant to various stakeholders in the regulated market for online gambling in the United States.
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