Poker News

The California Assembly Appropriations Committee passed an online poker legalization and regulation bill Wednesday, meaning that poker can finally (possibly) get a full vote on the Assembly floor. AB 2863 was supposed to be up for a vote by the committee last week, but some amendments were added that pushed the timetable out to today.

As usual, the bill was opposed by a hardline group of six Native American tribes with political power. The tribes, which include the Pechanga and Agua Caliente, have long wanted as large of a piece of the online poker pie as possible and have been loathe to compromise on anything. One of the biggest concessions they want is a “bad actor” clause that would prevent any operators that accepted U.S. customers after the UIGEA was passed in 2006 from applying for an online gaming license. This is specifically directed at PokerStars, as PokerStars would clearly be an intimidating competitor in the state.

As it turns out, a bad actor amendment was inserted into the bill. A bit of a compromise was hammered out, as operators who did offer games in the U.S. after the UIGEA passed would be able to pay a $20 million fee or wait five years to apply for a license. One would expect PokerStars will pony up the dough, if this eventually becomes law.

PokerStars was also targeted by another amendment that would limit the use of “accrued assets” by operators. Essentially, this is an attempt to level the playing field somewhat and not give established operators as big of an advantage. Specifically, assets like customer lists would be limited.

Parimutuel betting venues are still going get as much as $60 million in annual online poker revenue in exchange for not being allowed to operate online poker rooms, but one amendment stipulates that ten percent of gaming revenue will go straight to California’s General Fund before the racing industry gets its piece.

An online poker bill did make it this far last year and never advanced, so it’s not like clearing the Appropriations Committee hurdle is a guarantee of success. It is still very good news, though, as it has been the struggle of struggles to move any sort of online poker legislation forward in California. After the vote, Rincon Tribal Chairman Bo Mazzetti issued a statement, saying, in part:

Assemblyman Gray brought together an unprecedented group of Tribal governments, cardrooms, horse racing industry and labor groups to support Internet poker legislation.

AB 2863 establishes a safe and secure environment for Californians to use today’s technology to play poker. The bill establishes a tiered tax rate that lets the state receive its fair share of revenue and adjust the rate to ensure that the industry can develop and grow.

For his part, Assemblyman Adam Gray, the sponsor of the bill, has been frustrated at how unsupportive the members of the committee have been, despite the positive vote.. OnlinePokerReport has quoted Gray as saying, “This has probably been the most vetted bill this legislative session, we’ve had weekly stakeholder meetings, we’ve done a series of amendments. In fact if we held every bill in this process to the standard we’ve held this bill, we wouldn’t have any bills.”

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