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Despite a decade of debate, the state still seems far away from getting a bill across the finish line. But that doesn’t mean lawmakers won’t try.
California Assemblymember Reginald Jones-Sawyer introduced the state’s latest online poker legislative effort, the Internet Poker Consumer Protection Act, which seeks to legalize and regulate online poker in the Golden State.
Jones-Sawyer’s bill (AB 1677) would allow approved tribes and card rooms to offer online poker to anyone over the age of 21 located in the state of California.
Racetracks would not be eligible to operate online poker sites under AB 1677.
Instead, the bill uses the racing compromise first put forth last year by Assemblymember Adam Gray.
AB 1677 creates the California Horse Racing Internet Poker Account, which states:
Under the bill, cardrooms and tribes can apply for seven-year internet poker licenses at a cost of $12.5 million.
The fee is steep, but the one-time up-front payment is credited against future taxes owed on gross gaming revenue.
The bill calls for a progressive tax rate based on the cumulative gross gaming revenue of the entire industry.
If annual gross gaming revenues are:
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AB 1677 doesn’t have a bright line date that would prevent existing online poker operators who operated in the US after passage of the UIGEA in 2016 — namely PokerStars — from applying for a license.
Instead, Jones-Sawyer’s bill mostly leaves suitability up to regulators. (There are suitability requirements; however, none of these seem to be aimed directly at PokerStars).
This will be the hot-button issue that determines whether or not California makes any progress on the online poker front in 2017. With both sides dug in when it comes to suitability, the inclusion/exclusion of suitability language will likely be the focal point of debate.
AB 1677 calls on state regulators to “adopt regulations to implement the provisions within 270 days after the operative date of this bill.” All fees and vetting costs would be paid by the operator.
These fees are in addition to the one-time licensing fee.
The baseline regulations the bill calls for include, but are not limited to:
AB 1677 would also establish the Unlawful Gambling Enforcement Fund. The purpose of the UGEF is to provide law enforcement with the resources it needs to go after offshore sites and enforce the regulations of the law.
AB 1677 is a solid attempt to build upon the progress made over the years, from licensing and taxation rates to the racing compromise.
However, the lingering suitability issue is noticeably glossed over in the otherwise complete text. The resolution of that matter would need to take place for this bill to make any progress.