Despite opposition from PokerStars, which would be excluded from operating online poker under a new bill proposed by California Rep. Mike Gatto, the legislator said last week there is a “strong possibility” that the Golden State will launch online sometime in 2015.
The assemblyman, who is incoming chairman of the Assembly’s appropriations committee, made the prediction on his website, adding that the new bill, AB 9, would provide, “certainty and security that will legitimize the game, support locally-owned businesses, and keep much-needed revenue in the state.”
More bills are expected once the new legislative session begins in January.
Canada-based Amaya Gaming Group, which now owns PokerStars, last week criticized the current bill in the legislature that would legalize online poker, but which retains the “Bad Actor” clause that effectively shuts PokerStars out of the game. PokerStars ran afoul of the U.S. Justice Department several years ago when it served U.S. players on its real money off-shore poker website in violation of the Unlawful Internet Gambling Enforcement Act (UIGEA).
Gatto’s bill is similar to a bill that was introduced last year by Senator Lou Correa, and which Correa withdrew in August after he decided he lacked the support to push it through. Correa is being term-limited out of the Senate this month.
It said it would oppose any bill that “seeks to establish artificial competitive advantages for some and not all,” calling Gatto’s bill “a rehash of previously unsuccessful proposals.”
According to Amaya, the new bill, AB 9, is too similar to last year’s bill, particularly for the inclusion of the “bad actor” language, which, says, “Any person or entity that operated in the U.S. in violation of state or federal law would be automatically excluded.” Amaya purchased PokerStars last summer for $4.9 billion from a European owner.
PokerStars released a statement that said, “As a coalition, we are committed to working with legislators and our other partners in the gaming community to pass internet poker legislation in 2015 that establishes a vibrant, competitive marketplace, provides superior consumer protections, and ensures that the state receives a reasonable return. We are convinced that the various interests must work together if we are to be successful in establishing a well-regulated environment and the best-in-class internet poker industry for California.”
PokerStars maintains that the real reason the “bad actor” language is included is to create a market that would prevent the most competitive online poker operator of all from competing against tribes and card rooms that don’t have its experience.
PokerStars’s allies include the San Manuel Band of Mission Indians, the Morongo Band, and three of the largest card rooms in the state.
Supporters for Gatto’s bill include the Agua Caliente Band, the Pechanga Band, the Sycuan Band and Viejas Band, among the largest casino operates in the state.
Some industry observers point out that the new bill does include language that might make it possible for the new owner of PokerStars to obtain a license if it offers credible evidence that it won’t “affect the integrity,” of the online poker system, once it is created.
The bill does have some provisions that Correa’s bill did not have, including enhanced security to ensure that underage players can’t participate and to combat money laundering.
It also, according to Gatto, “expands the pie” by allowing participation by racetracks and off-track betting centers that would be able to operate as satellite centers for accepting cash deposits and paying withdrawals and that would allow players to fund the real money games. Requiring in person transactions would combat financial crimes, according to experts. It still would not allow racetracks to offer online poker, however.
According to Gatto’s legislative director Aaron Moreno, “California players who may be playing on off-shore sites are often putting their funds at risk due to a lack of regulation of these sites. If players know that they can get a fair game and can actually count on getting their funds upon withdrawal, we will bring many of them home.”
Lobbyists are expecting to see at least two more such bills introduced.
The future of online poker may depend on what California does, since Nevada’s experiment appears to be faltering, with only two such sites in operation, and the New Jersey versions not doing well either.
According to the Fantini Gaming Report: “While online gaming has gotten off to a slow start elsewhere in the U.S., many see California and its huge population of 43 million as providing enough players to make online poker viable,”
The legislature has a financial incentive to create a new revenue stream for the state.
