In some of the least surprising news ever, it appears that online poker legislation will not be going anywhere in California this year. There actually had been some solid headway made in the last several months, but as usual, different stakeholder groups could not come together on a final compromise, so Assemblyman Adam Gray’s AB 2863 has been shelved.
As has generally been the case, the sticking point was a “bad actor” clause. Put simply, bad actor clauses put restrictions on the eligibility of online gaming operators who offered games to people in the U.S. after the UIGEA was passed in late 2006. A hardline coalition of Native American tribes, led by the Pechanga Band of Luiseno Indians and the Agua Caliente Band of Cahuilla Indians, has wanted these operators to be completely excluded from the California market. They claim it is for ethical and legal reasons, but really, it is because they are afraid of competition; the poker operator clearly targeted by the bad actor clause is PokerStars.
An earlier version of the bill, dubbed the “compromise” version, looked like it might have had the legs to not just come up for a vote, but actually pass. In that bill, PokerStars would not be barred via legislation, but rather be evaluated by California’s gaming regulators when the company filed an application for a license.
But the Pechangas and Agua Calientes were able to force an amendment to AB 2863, which once again instituted a bad actor clause. PokerStars and other operators who accepted U.S. customers after 2006 (but really, just PokerStars), would be prevented from applying for a gaming license for five years. One previous take on this would have allowed PokerStars to pay $20 million to skip the ban, but that wasn’t included in this latest case.
A number of tribes, as well as the state’s largest cardrooms, have allied with PokerStars and this “PokerStars Coalition” obviously opposed the amendment. Not only do they likely think it’s just plain wrong, but many already have deals in place with PokerStars for PokerStars to be their software provider, so if Stars has to sit out, these tribes and cardrooms would be left scrambling for another technology option.
In an interesting twist, according to Online Poker Report, the Viejas Band of Kumeyaay Indians and the Lytton Band of Pomo Indians were also opposed to the amendment, even though they were on the side that favors a bad actor clause. Their opposition came because they felt the language of the bad actor clause was too weak. The amendment stipulates that the cooling off period for PokerStars was to end in 2022, approximately five years from when the bill would have possibly passed. But those two dissenting tribes felt that that definition could actually mean that PokerStars would only have to sit out two or three years because it would still possibly take a couple years for regulations to be put in place, licensed to be handed out, and sites to get up and running. Thus, they wanted the bad actor clause to be redefined as lasting five years from the day the first online poker card is dealt.
It is still possible that AB 2863 could be voted on this year, but as the 2016 legislative session ends on August 31st, it is very unlikely.