A bill, which is backed by one of the largest players in the online gaming industry, is up for a vote in the California General Assembly that would open up online betting on horse racing for the state’s residents.
The proposed bill, named SB 1072 in the California legislature, would up the cut for the state regarding its percentage of the take of wagers on horse racing. More importantly, perhaps, is the provision in the bill that would allow for “exchange betting,” otherwise known as internet wagering. The bill was on the fast track to being enacted before opposition to the legislation delayed its passage.
The bill has been amended by California Senator Ron Calderon, a Democrat from Montebello serving Senate District 30, to alleviate the concerns of much of the opposition, which included California horse trainers, among others. Under Calderon’s amendments and his sponsorship, implementation of the law (if passed through the Senate and signed by Governor Arnold Schwarzenegger) would be studied by the state legislature and the California Horse Racing Board for approximately 20 months to set the rules for implementation. This means that the law would not take effect until 2012 at the earliest.
European gaming conglomerate Betfair was critical in getting Calderon’s amended bill voted through, along with Magna International Developments. Betfair, who is also the sponsor of the World Series of Poker Europe, is the owner of the United States’ largest horse racing wagering site, TVG.com. The company sponsors races at New York’s Saratoga racetrack and, through TVG, offers internet wagering to millions of customers.
Intrastate gaming is a subject that the state of California, currently facing billions of dollars in budget shortfalls, is examining as a means of alleviating the situation. Along with the current bill that would open up wagering on horse racing, there is an ongoing drive to push for intrastate online poker, although a bill introduced earlier this year by Senator Rod Wright fell short over the California General Assembly’s summer session.
Wright’s bill, SB 1485, would have opened up the California online gaming market, in particular poker, to control by the state. The now dead bill would have authorized three “hub operators” to provide legal internet gambling outlets to California residents for a period of five years. The state would have taken 20% of the revenues monthly, which would have been paid to a specially created internet gambling fund. California residents also would have faced stiff penalties for playing on unauthorized sites.
The intrastate gaming debate has come forward as of late because of furor over the Commerce Casino’s stance against federal legislation that would fully legalize internet gaming. In testimony in July in front of the House Financial Services Committee regarding Congressman Barney Frank‘s Internet Gambling Regulation, Consumer Protection, and Enforcement Act (HR 2267), Commerce chairman Tom Malkasian came out against the proposed bill for several reasons.
Among the points cited by Malkasian was that the revenue generated by the new legislation would not stay in the United States, online companies would not face the same regulation that land-based casinos face, and jobs would be lost rather than created. His stance, which other top California card rooms such as Hollywood Park, the Bicycle Casino, and Hawaiian Gardens have stated they agree with, has angered many in the poker community.
