New Online Poker Bill Introduced in California

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The state of Californiais considering a new bill that would allow its citizens to participate in a state-regulated online poker market. Introduced earlier this week by California Assemblyman Mike Gatto (D – Los Angeles, pictured), the bill, known by AB 9 or “The Internet Poker Consumer Protection Act of 2015,” has been marked at this point with an “urgency” status, which means that if two-thirds of the California Assembly and the Senate vote in favor of it, it would immediately go into law without having to go to Governor Jerry Brown for his signature.

In an interview with Matthew Kredell of PokerNews, Gatto stated that he believes his bill is the one that can get through the logjam in the halls of Sacramento. “I think we have a proposal that can unite all the various groups that were not previously united,” Gatto stated. “We have a lot of the same language from last year, but what I think makes our bill special is a regimen for weeding out money laundering, guaranteeing foot traffic to casinos, and expanding the number of parties who will be able to participate in the marketplace.”

Gatto’s bill is very similar to what was introduced earlier this year by another member of the State Assembly. Reginald Jones-Sawyer (D – Los Angeles), who has been a longtime advocate of online poker in California, previously introduced legislation in the governing body, but has yet to have success getting it to a vote. Jones-Sawyer was expected to put through another online poker bill this month also, but it is unknown whether he will drop his efforts and back Gatto’s bill or continue with his version of legislation.

AB 9 looks to be very similar to a proposed draft of a bill that 13 of California’s Indian tribes supported this summer. The bill still has a “bad actor” clause in it, stating that a license should not be granted to “entities and persons who knowingly engaged in unlawful internet gaming after December 31, 2006.”

The bill adds that a company that “[knowingly] purchased or otherwise acquired data for use in connection with internet poker in the state bears directly on the applicant’s suitability and must be considered in any determination whether to license that applicant.”

AB 9 goes on to say that any “person or entity” that “has purchased or acquired the covered assets of any entity [previously described]” would be denied licensing. This means that the 800-pound gorilla in the room, PokerStars, would likely not only be prohibited from participating in a California market, but its new owner, Amaya Gaming, would also not be allowed to use the PokerStars software, its mailing lists, or other associated assets.

Details of AB 9 show that licensing for California online poker sites would be for 10 years and require a one-time fee of $5 million and undetermined yearly fees and taxes. Playing on “unauthorized” sites would be criminalized under AB 9 and deposits would have to be made at a physical location, either a card room or an Indian tribe’s casino that is offering online poker, rather than through an online transaction.

Revenues generated by the regulated California online poker industry would go into a special fund, the “Internet Poker Fund,” which would be handed out to problem gambling organizations and other unspecified measures.

Kept out of the legislation is any language regarding the California horse racing industry, which desperately wants to get into the game, but Gatto isn’t looking to shut them out. In the PokerNews interview, Gatto told Kredell that he is “open” to changes in AB 9. “I’ve always been a fair legislator,” he said, “and we will work with a lot of different participants. This is an opportunity for everybody to make lots of money.”

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22 COMMENTS

    • So basically they’ve written into the law to ban stars and tilt?

      Yes, but apparently there are some (imo unlikely) outs for Amaya to get into the market if this bill passes.

    • This bill definitely has a few issues with criminalizing players and requiring physical deposits at casinos. Also would shut out Amaya as written

    • This bill definitely has a few issues with criminalizing players and requiring physical deposits at casinos. Also would shut out Amaya as written

      Yeah, definitely doesn’t seem like a good bill for the players. No way I’d want to deposit at a B&M. And the criminalization of playing on non-licensed sites seems a little ridiculous, especially since it’s probably gonna take 1+ year between passing a bill and opening the first regulated online site.

    • An individual state, California, citing alleged violations of FEDERAL law by PokerStars when California itself didn’t take any legal action against PokerStars when individuals in that state were playing on PokerStars. The FEDS cleared PokerStars of any wrong-doing. How does California justify their discrimination against a particular online poker site? Amaya will probably take the state of California to court and win. I guess the state of California just wants to generate some business/revenue for gaming lawyers licensed by the state. P.S. – For PokerStars trolls the INDIVIDUAL states of Washington and Kentucky did take legal action against PokerStars but those states ARE NOT California. – – You were banned by PS, admit it worm ! 🙂

    • Having to make a deposit at a B&M is nothing for most people.

      Isn’t a B&M within an hour from my house in LA, yeah, no big deal

      This sounds awful

    • Isn’t a B&M within an hour from my house in LA, yeah, no big deal

      This sounds awful

      Awww….sorry man. You really play poker?

    • Having to make a deposit at a B&M is nothing for most people.

      It’s quite inconvenient to have to drive to a B&M casino to deposit or withdraw. The whole allure of online poker, and a major benefit for many people, is that you can play, deposit, and withdraw from the comfort of your own home.

    • It’s quite inconvenient to have to drive to a B&M casino to deposit or withdraw. The whole allure of online poker, and a major benefit for many people, is that you can play, deposit, and withdraw from the comfort of your own home.

      May be inconvenient but not as inconvenient as not being able to play. Besides it’s not like you have to deposit daily and a withdraw would probably be a hell of a lot faster. Not perfect but a lot better than nothing. No need to throw the baby out with the bath water, pass the bill.

    • yeah, cause recreational players with a job and family are going to drive an hour to the casino each way so they can deposit play some tournaments at night or on the weekend from their pc…It’s awful

    • May be inconvenient but not as inconvenient as not being able to play. Besides it’s not like you have to deposit daily and a withdraw would probably be a hell of a lot faster. Not perfect but a lot better than nothing. No need to throw the baby out with the bath water, pass the bill.

      I see where you’re coming from, but I’d still rather have an online poker industry that people can participate in and that has a chance at success rather than one with a bunch of barriers to entry for consumers and criminalizing players.

    • Having to make a deposit at a B&M is nothing for most people.

      How so? What if I want to play on an online cardroom that operates out of San Francisco but I live in LA? They’re really going to make me fly up there just to deposit and cash out? That’s keeping the player pool way too segregated and will kill any chance at having a decent player pool.

      I live in LA so I’d be pretty lucky if it came down to this, but what’s someone supposed to do if they live 6 hours away from the nearest B&M cardroom?

    • One of the caveats of Gatto’s bill is that deposits could be done in a B&M or through a “satellite service.” Essentially that sounds like businesses would be set up that would allow folks to make deposits/withdrawals. Still not convenient for players but, if it makes the legislature feel better, guess poker players could take the step.

    • Instead of allowing PokerStars and going with intrastate compacts, they are basically putting a law into place that would foster similar environments to the stagnant situations in Nevada, Delaware, and New Jersey. This bill would be a step backwards for US online poker, taking California out of the equation.

    • Instead of allowing PokerStars and going with intrastate compacts, they are basically putting a law into place that would foster similar environments to the stagnant situations in Nevada, Delaware, and New Jersey. This bill would be a step backwards for US online poker, taking California out of the equation.

      There’s a small difference here, Deuce. Unlike Nevada, New Jersey and Delaware, California actually has a population that could conceivably support a four/five site online poker industry. 39 million people, roughly 10% might play…that’s larger than all of the other states combined (using the same 10% metric, NV, NJ and DE only generate roughly 1.1 million added together).

    • How so? What if I want to play on an online cardroom that operates out of San Francisco but I live in LA? They’re really going to make me fly up there just to deposit and cash out? That’s keeping the player pool way too segregated and will kill any chance at having a decent player pool.

      I live in LA so I’d be pretty lucky if it came down to this, but what’s someone supposed to do if they live 6 hours away from the nearest B&M cardroom?

      We haven’t heard the details of it yet. But it’s probably more likely the casino’s would take deposits to any online sites in the state and will probably charge a fee to do so.