On Wednesday, California’s Assembly passed a bill that would legalize and regulate daily fantasy sports in the state by an overwhelming margin: 62-1.
That effort only started in September, when Assemblymember Adam Gray introduced the bill. The legislation easily passed two committee votes earlier this month, and now it has already passed one of the state’s two legislative chambers, needing just the approval of the Senate and the signature of Gov. Jerry Brown.
People who don’t follow every last movement of the California legislature understandably thought this could be good news for online poker legislation, which has been considered for several years but has made very little progress.
The truth of the matter is this: The progress of the DFS bill doesn’t mean much, if anything, for the potential of online poker legislation in the state, at least in the short term.
Here’s a look at why:
The main reason why DFS regulation is getting an immediate look by the legislature? It’s already happening in jurisdictions across the country — California included — and some operators claim and believe they offer contests legally in 44 states. Even negative opinions and cease-and-desist orders from attorneys general isn’t stopping DraftKings and FanDuel from serving customers in a handful of states — the latest being Mississippi.
Online poker comes from a wholly different starting point. It’s generally illegal in the U.S., except in the three states where it’s been made explicitly legal — Nevada, New Jersey and Delaware.
So, the impetus to act in California and elsewhere is to protect the DFS players who are going to be playing at DraftKings, FanDuel and other DFS sites whether statehouses act or not.
Many online poker proponents hope that poker could piggyback on DFS discussions in statehouses across the country. Californians can play at several offshore poker sites right now, if they wanted to, also without consumer protection. The Poker Players Alliance put forth that argument after the DFS vote:
“The swift passage of a DFS regulatory bill shows that California lawmakers do in fact care about protecting consumers who play games online,” PPA Executive Director John Pappas said via a press release. Therefore, we urge the legislature to immediately move legislation that also protects Californians who want to play poker online through appropriate authorization and regulation. If legislating consumer protections for DFS players is a priority for the legislature, the same should be true for Internet poker players.”
However, that’s still an idea that is germinating in California and elsewhere. Seeing instant progress on such an “omnibus” bill based on the DFS bill’s progress is a bit premature. In the long-term, however, it’s possible to see how this idea could pick up steam, especially if DFS regulation is successful, if and when it’s passed into law.
Almost no one, apparently, has the stomach to oppose DFS regulation in California, other than Assemblymember Marc Levine. That much was clear when he cast the only “no” vote against Gray’s legislation.
If the gaming interests in the state wanted to slow down the DFS bill, their interest in doing so has not been on display so far. For now tribes, tracks and cardrooms appear to be content to let the bill move forward. The idea that a DFS bill is an unwanted expansion of gambling — a concern in some other jurisdictions — isn’t gaining any traction in California.
A group of tribes — the California Nations Indian Gaming Association — indicated that it was unhappy that the DFS bill has “leap-frogged” the online poker discussion. But that group either doesn’t have the power or the will to turn its displeasure from words into action.
If there’s an organized effort to stop this bill from passing, it hasn’t reared its head yet. Could that change when the bill reaches the Senate? That’s certainly possible.
Meanwhile, on the online poker front, the same dynamic exists that did previously — gaming interests are at odds about how online poker should be conducted in the state.
While stances appear to be softening regarding “bad actor” language aimed at keeping PokerStars out of the state, few appear to agree on who should be able to offer online poker in the state. Until that central question is answered, online poker regulation probably isn’t going anywhere.
As DFS moves forward toward a regulated environment, it seems clear that the horse racing industry is interested in getting into the DFS business. Consider:
Tracks also want a piece of online poker, but tribal interests want to keep them shut out, or only allow them to act as affiliates. Tracks apparently appear to be happy with the legal clarity that comes with a bill that would allow them to operate DFS contests, or partner with sites that do.