A new bill that would legalize online poker in California has emerged that challenges key provisions of the first bill, AB 9, introduced by Assemblyman Mike Gatto several weeks ago, although both have the same name: The Internet Poker Consumer Protection Act of 2015.
The first online poker bill was introduced in the California legislature seven years ago.
Gatto says he is not closing the door on any other proposals that may be out there. Hearings on the various poker bills might happen as soon as April.
The new bill, AB 167 authored by Assemblyman Reginald Jones-Sawyer, takes head on two controversial parts of Gatto’s bill that have been seen as roadblocks to its passage: 1) It does not have a “bad actor” clause that seems tailor-made to prevent participation by PokerStars and its allies. 2) It would allow the participation of the horseracing industry.
The “bad actor” clause limits participation in online poker by entities that offered online wagers in the U.S. after December 31, 2006. Gatto’s bill has it, although it also has some perceived loopholes that might allow PokerStars new owner, Amaya in. Jones-Sawyer’s bill does not have it.
The PokerStars coalition, which includes the Morongo tribe and several Golden State card rooms, praised the new bill last week. “We applaud Assembly Member Jones-Sawyer for his thoughtful approach to iPoker legislation in California which takes into account many years of input from stakeholders on all sides, including the California Department of Justice,” the group said in a press release. It added that the bill “brings parties with diverse interests together to move legislation forward.”
The Pechanga tribe, which has insisted on trying to keep PokerStars out, released a statement by Chairman Mark Macarro attacking AB 167: “We are disappointed that the bill disregards important principles from a broad coalition of respected tribes and card rooms that help prevent corporations and entities that previously violated federal law from profiting from tainted software, brands, and databases derived from illegal activity.”
Some tribes, Pechanga included, have opposed any participation by the state’s racetracks. This is a traditional opposition by Indian gaming to any expansion of gaming activity to non-tribal entities.
Macarro said in his statement, “Tribes have been steadfast in the principle that online poker be consistent with California’s longstanding public policy of limited gaming, and that means keeping it to just tribes and card rooms. California voters have always had the final say on gaming expansion and they have already rejected expansion of gaming for horse racing.”
However the horseracing lobby is strong in Sacramento, although not as powerful as Indian gaming. But since Indian gaming is not presenting a monolithic opposition to the participation by racetracks, they might be able to force their inclusion.
The Agua Caliente tribe, which worked previously with Jones-Sawyer, criticized the inclusion of racetracks or “bad actors.” Tribal Chairman Jeff L. Grubbe declared last week, “We did not, and do not, support expanding gaming to horseracing facilities, nor do we believe that gaming corporations that have previously violated federal law should be able to profit in the state of California from the use of software, brands and databases that were used for illegal activities. Furthermore, we believe that state law should provide clear standards for eligible licensees.”
Gatto last week indicated his willingness to keep an open mind and noted that he removed a provision requiring in-person registration when he encountered enough opposition to it. He said he does want to keep open the possibility that people CAN go in person to make deposits or withdraw money.
He told PokerNews: “On the front end, some people are intimidated going into a card room or casino and we don’t want to keep that player from participating.” He added, “The demographic of people not interested in going to a casino is our growth potential. On the back end, it’s hard to argue that people won’t go in to pick up big winnings.”
As to the issue of which groups are allowed to participate, Gatto commented, “I still maintain that there is too much debate when it comes to online poker legislation about who the licensee will be, because when it comes down to it there are many ways for many different entities to make money in this industry.”
Referring to the inclusion of racetracks, Gatto said, “I understand the challenges horse racing has been going through. Most people in the legislature agree the sport is very important to California. I also have friends in the tribal industry who say they have exclusivity to certain types of games. My vested interest is what’s going to be good for the people in the state. It’s just a matter of seeing which position makes more sense.”
The 83-page Jones-Sawyer bill would make it a felony to play on non-government licensed poker sites. It would also allow participation by providers in interstate player pools.
Gatto’s bill has not yet been assigned to a committee, although the Governmental Organization Committee or the Consumer Protection and Privacy Committee will probably hear it. Gatto chairs the latter.
Gatto said last week that he thinks he and Jones-Sawyer will end up working together on a bill. “I think there’s a major opportunity for us to work together,” he told PokerNews. “I left the meeting with Mr. Jones-Sawyer feeling very comfortable about his willingness to work together and the likelihood that eventually there will be only one bill.”
Jones-Sawyer projects that the new online poker industry could be launched within 635 days of the bill’s signing into law. The bill stipulates that regulators would have 270 days to create regulations for the new activity, with a year allowed for licensing operators.
This compares to New Jersey, which had its online poker industry operational nine months after its legislation was signed into law. Nevada took 22 months to accomplish the same feat, while Delaware took 16 months.
California might take longer than New Jersey because of the participation of multiple interest groups, including the biggest, Indian gaming. It also has multiple regulatory groups since each tribe has its own gaming commission, while the governor’s office and attorney general also oversee state gaming regulators.
On the other hand, California is only looking at legalizing online poker, not a whole array of online games, as New Jersey did. The Golden State will not be pioneering online gaming and will be able to profit from New Jersey’s experience.
