California legal online poker
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Online Poker California – Latest News And Analysis

California has been trying to pass an online poker bill since 2008. Progress has been, to put it mildly, trivial. Read the latest California online poker developments below, and scroll down for a synopsis of the status quo for legal online poker in California.

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Latest California online poker news

California online poker legislation

The states’ various potential stakeholders, which includes tribal gaming, nearly 100 licensed card rooms, and the union-backed horseracing industry, have taken hardline positions on several key issues. This, coupled with each group’s political clout, has insured that all online poker bills crash and burn.

In many of the stakeholders’ eyes, they prefer the status quo over an imperfect bill.

The three key issues are:

1) The capability of state regulators to oversee the industry.

2) The role the state’s horseracing industry should play.

3) The potential licensure of PokerStars.

2017 outlook for California online poker

California doesn’t appear to be any closer to legalizing online poker than it was last year, when a lack of consensus over so-called bad actor language stalled progress.

That’s not to say legislators won’t try again. If anything, the ball is already rolling.

In February 2017, Assemblymember Reginald Jones-Sawyer introduced legislation (AB 1677) to regulate and legalize online poker in California.

Under the constituents of the bill:

  • Card rooms and approved tribes would be able to offer online poker to those of legal age.
  • Racetracks would not be eligible be become operators, but would receive up to $60 million per year as a stipend from online poker revenue.
  • The licensing fees would be set at $12.5 million for seven years. This would be credited against future tax payments from online poker revenue.
  • Staggered tax rates based on total industry revenue, ranging from ~8.85 percent to 15 percent.

Absent from the bill is any reference to suitability language. This leaves the impression that AB 1677 is a conversation starter rather than a serious contender for passage.

The fact remains that in order for any California online poker bill to make headway, the deep divide between the PokerStars and Pechanga coalitions over the brightline for suitability would have to be bridged. Someone is going to have to budge. Thus far, neither side has shown a willingness to do so.

Going further, there just doesn’t appear to be a strong appetite for online poker in CA anymore. Lawmakers are focusing on a slew of new threats from the Trump administration. That, and fresher gambling markets — such as daily fantasy sports, esports, and social gaming — appear to hold more long-term promise than online poker, which has been in a multi-year decline.

Background for California online poker

California’s efforts to pass online poker legislation extend all the way back to 2008. Suffice it to say, progress has been trivial.

The primary difficulty has been crafting a bill that appeases all stakeholders, of which there are many. California’s gambling industry consists of nearly 100 licensed card rooms, tribal casinos, and a union-backed horseracing industry. Each has taken a hardline position on several key issues. This, coupled with each group’s political clout, has insured that all online poker bills crash and burn.

The status quo appears to be preferred over an imperfect bill in many of the stakeholders’ eyes.

That’s not to say progress hasn’t been made. In 2015, Assemblymember Adam Gray’s AB 431 became the first piece of CA online poker legislation to pass a committee vote. The bill passed in both the Assembly Governmental Organization Committee and the Assembly Appropriations Committee.

However, it’s important to put this progress in the proper context. AB 431 was nothing more than a two-page shell bill with no specific policies for people to support or oppose, and fleeting support.

2016 in review

There were a series of promising developments in 2016. Ultimately, a lack of consensus on one critical issue — suitability — derailed efforts.

The 2016 effort kicked off in much the same fashion as the 2015 push, with a bill sponsored by Gray (AB 2863) unanimously passing a committee vote. The major difference being the horse racing industry favored the bill, as it would be granted a substantial subsidy in exchange for sitting on the sidelines.

Gray flip-flopped on suitability language. At first, the bill set the bad actor brightline to December 31, 2011. This clearly favored the PokerStars coalition (PokerStars pulled out of the US in April 2011). A tribal coalition spearheaded by the politically powerful Pechanga Band of Luiseño Indians and Agua Caliente Band of Cahuilla Indians staunchly opposed this provision.

Then, an amendment was added that would effectively force PokerStars out of the market for five years. Now it was PokerStars and its allies that took on the role of obstructionist.

Without consensus among the state’s two most influential coalitions, the bill could not muster enough support to justify a vote on the Assembly floor. AB 2863 was ultimately shelved.

2015 in review

There were four online poker bills introduced in California in 2015. Assemblyman Mike Gatto’s AB 9, Assemblyman Reggie Jones-Sawyer’s AB 167, Assemblyman Adam Gray’s AB 431, and State Senator Isadore Hall III’s SB 267, which was a carbon copy of Gray’s AB 431.

While progress has been slow, 2015 wasn’t all for naught.

2015 marked the first time an online poker bill passed a committee vote. AB 431 passed the Assembly Governmental Organizations Committee, as well as the Assembly Appropriations Committee. However, it’s important to put this progress in the proper perspective, as AB 431 was nothing more than a two-page shell bill, a placeholder with no specific policies for people to support or oppose, and fleeting support.