California Online Poker Bill Gets Two Key Changes In Advance Of April 27 Hearing

California Online Poker Bill Gets Last Minute Amendment Ahead Of Hearing Next Week

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Just a week before a scheduled hearing in front of the California Assembly Governmental Organization Committee, Chairman Adam Gray’s online poker bill, AB 2863, received a small but significant tweaking.

The newly-amended version of the measure was unveiled on April 20. Aside from a few minor revisions, the new AB 2863 features two key changes.

What the amendments to AB 2863 say

First, the bill no longer requires Appropriations approval, which removes one step of its journey toward becoming a law.

More importantly – and likely far more impactful – in two separate spots, AB 2863 now states:

  • The bill would become operative when criteria are established by statute addressing involvement in Internet betting prior to the state’s authorization of Internet poker pursuant to its provisions.
  • The act that added this subparagraph shall not become operative until criteria are established by statute to address involvement in Internet betting prior to the state’s authorization of Internet poker pursuant to this chapter.

Is this the return of the bad actor debate?

The additions indicate that the principles involved in crafting the legislation are still working through suitability requirements and/or restrictions – the so-called bad actor clause.

PokerStars’ progress in other jurisdictions, namely New Jersey, was supposed to take the air out of the bad actor debate, and it seemed to be doing just that. Earlier this year, bad actor language was called “moot” by one anonymous tribal source who spoke to veteran journalist Dave Palermo back in January.

And the PokerStars coalition seemed to be growing, while calls for bad actor clauses subsided. With that, the bad actor debate became a secondary issue for many, and eyes were turned to the issue of horseracing.

Horseracing lobbyist Robyn Black offered up a similar sentiment to the tribal source. “Once Amaya became successful in New Jersey it was only a matter of time before that (bad actor issue) became a moot point,” Black told Palermo.

However, the Pechanga coalition, which has been vociferously lobbying for the restrictive language for several years, apparently didn’t get the memo on the new “moot” status bad actor clauses.

In a letter sent on February 12, signed by Pechanga and five other tribes, the tribe wrote:

“We also appreciate your commitment to work with us to draft meaningful Suitability Standards for Prospective Applicants. However, to proceed with the suitability language in your current Draft – which our Coalition would otherwise vigorously oppose from the outset – we could not agree to the process you outlined as it would place us at an unfair disadvantage in the process given your request for neutrality. As we agreed to do concerning the operator fees, we believe your bill at introduction should, as a matter of fairness, contain truly impartial language on Suitability Standards for Prospective Applicants so as not to prejudice our position on this very significant – if not pivotal – aspect of the bill. We would be happy to have our staff work with your staff on such language.

Therefore, if impartial language is inserted into the bill when introduced, we commit to engaging in good-faith negotiations with you on Suitability Standards for Prospective Applicants to resolve this outstanding issue before the bill is brought to the Assembly Floor for a vote.”

This “impartial language” was a bit of a concession from the coalition, which had previously staunchly opposed any language that might allow PokerStars to apply for a license.

So, while not completely extinguished, the bad actor debate could best be described as smoldering at the time the letter was sent.

However, with the insider trading charges filed by Canadian regulators against the now-former CEO of Amaya, David Baazov, fuel may have been added to the smoldering fire. Baazov is on a voluntary leave of absence from his CEO and chairman roles with the company, but remains a member of the board of directors

Considering the new amendment, Pechanga and its allies have apparently gotten their wish for “impartial language on suitability standards,” as this is precisely what the new amendments in AB 2863 added to the bill.

- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.
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