Online Poker Bill Removed from Last Week’s California Gaming Hearing

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The California State Assembly Governmental Organization (GO) Committee was expected to hold a hearing on three internet gambling bills last Wednesday and the hearing did go off as planned. To the disappointment of online poker supporters, though, only the daily fantasy sports (DFS) bill was discussed. That bill, AB 1437, which would legalize and regulate DFS should it eventually become law, was passed by an 18 to 1 vote.

As my colleague Earl Burton wrote earlier this month, AB 167, an online poker bill introduced by Representative Reginald Jones-Sawyer was supposed to be on the hearing’s docket. That bill aims to legalize and regulate intrastate online poker in California. While that means that the poker sites would only be open to players within state borders, the legalization of the game would be an important milestone for United states internet gaming, as California is by far the most populous state in the country and is expected to easily support multiple gaming sites on its own. Perhaps more importantly, though, California could eventually partner with the other states with legal online poker – Nevada, New Jersey, and Delaware – to give them a huge boost in player traffic and, in turn, revenue, with a new multi-state poker network.

A group of Native American tribes called the “Cali 7” group ruined the day for online poker, though, as they put pressure on the GO Committee to remove online poker from the agenda. These tribes have taken a selfish stand on internet poker in the state, essentially wanting as many stakeholders excluded as possible in order to increase their own piece of the pie. They do not want pari-mutuel facilities to be able to operator online poker sites and they want a “bad actor” clause included in legislation. Such a “bad actor” clause, which is not in AB 167, would exclude companies who continued to operate in California after the UIGEA passed in 2006. It is clearly targeted at PokerStars, who would serve as significant competition to the tribes.

Tribes like those in the Cali 7 have been amongst the various players in the internet poker political game who have been largely unwilling to budge as bills have continued to fail over the years.

AB 167 aims more towards compromise, eliminating “bad actor” clauses and being much more inclusive to all sorts of possible operators, such as race tracks.

An online sports betting bill was also removed from last Wednesday’s agenda.

Steve Stallings, chairman of the California Nations Indian Gaming Association (CNIGA), expressed his displeasure with the lack of action on internet poker last week, saying in a press release, “We realize there are two other bills dealing with sports betting (AB 1441) and daily fantasy sports (DFS) (AB 1437) sharing the agenda with the I-Poker bill, AB 167. Introduced by Representative Reginald Jones-Sawyer, AB 167 represents one of the last in a series of I-Poker bills, which, unlike AB 1441 and AB 1437, were thoroughly vetted, debated, altered, massaged, and continually passed over with the hope of a political miracle of consensus in the next year.”

“The regulation of fantasy sports is well intended. However, the state needs to prove it can deal with one online game–I-Poker–before it takes on others,” he added.

“Practice makes perfect applies here. The exercise of debating and approving I-Poker will prove useful in addressing additional details that arise in the new proposals of introducing sports wagering and licensing and regulating DFS.”

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