Rumors were flying in Sacramento Thursday of this week that an iPoker bill was about to come to a vote in the California Assembly. If the bill is not amended before August 19 it is unlike to be voted on. So the chances for bringing together to main factions before the technical deadline of September 1 seemed to be slipping away.
The bill was pulled from the Assembly floor early last week, creating more time to try to hammer out a compromise acceptable to every stakeholder.
The bill authored by Assemblyman Adam Gray is backed by the horseracing industry and most of the state’s card clubs, but gaming tribes are split. Some feel threatened by the online technology, while others see it as a way to tap into a new revenue source as New Jersey, Delaware and Nevada have already done.
Even if the bill passes the Assembly, no one knows how it will fare in the Senate, which has so far not shown itself willing to tackle the issue. Senate leader Kevin de León told the Los Angeles Times that he didn’t feel any heat to pass such a bill. The bill would require a two-thirds vote of both chambers, because it deals with financial matters.
Earlier this year the horse racing industry was brought on board with a provision that it would be paid up to $60 million a year for giving up its place at the table.
The main, in fact the overarching bone of contention is whether and how badly to punish PokerStars, which continued to allow American players to bet on its site before the Department of Justice ruled in 2011 that online poker was a decision that individual states could make. Before that 2011 ruling, in 2006, the U.S. Justice Department began enforcing the Unlawful Internet Gambling Enforcement Act (UIGEA) on online poker sites. Publically traded companies threw in the town and closed their sites to U.S. players. PokerStars, which at that time was privately owned, didn’t cave. This gave PokerStars time to rack up a list of players that no one else has. It is now the largest purveyor of online poker in the world.
Those who don’t want PokerStars to participate in the market for at least ten years cite that as their reason. They want a so-called “bad actor” provision in the bill.
Gray’s Assembly Bill 2863 doesn’t go that far. It would bar PokerStars from participating for five years unless the company pays $20 million. The Morongo Band of Mission Indians, among others, supports that approach. PokerStars has reportedly said it would accept that penalty instead of sitting it out for five years.
The Agua Caliente Band of Cahuilla Indians and its coalition is holding out for ten years and a fine of $60 million. An article last week in OnlinePokerReport said that some of the strongest opponents of PokerStars were possibly “willing to bend,” after being personally jawboned by Assemblyman Gray and Agua Caliente Chairman Jeff Grubbe.
U.S. Senator Dianne Feinstein has weighed in on the bill, claiming that such iPoker sites are involved in “money laundering and other crimes,” worldwide.
Supporters passionately assert that poker fans will play at such sites, whether they are legal or not, but will do so without consumer protections.
Professional poker player Jason Somerville told CNBC’s Power Lunch last week: “I personally have lost tens of thousands of dollars on unregulated online poker sites that have just vanished in the middle of the night.” He added, “I think it’s the government’s responsibility to tax and regulate it.”
Opponents, such as the California Coalition Against Gambling Expansion, claim that the state could actually lose money to problem gambling, which, it says, is responsible for crime, unemployment and bankruptcy.
Supporters retort that if the state is going to take such a protectionist stance that it should actively enforce the laws on the books, instead of allowing the Wild West status of the games to proliferate.
