California Online Poker Bill Receives Blessing of Horse Racing Industry

Posted on April 25th, 2016 by Jon Pineda
California online poker horse racing industry

Santa Anita Park won’t be dealing cards should California online poker become legalized, but it would receive a substantial share of a $60 million annual payment to the horse racing industry. (Image: Eric Jung/Lifetime Memories Photography)

California online poker is one length closer to winning legal status in the country’s most populated state after prominent executives from the horse racing community came together last week to support legislation to sanction the card game on the Internet.

Nine industry leaders jointly wrote a letter to State Assemblyman Adam Gray (D-District 21) extending their backing of his Assembly Bill 2863, the “Internet Poker Consumer Protection Act of 2016.”

“We write on behalf of the racetracks, fairs, jockeys, pari-mutuel clerks and thousands of California horse owners and trainers who have invested hundreds of millions of dollars into our state’s economy,” the letter read. “On behalf of the California horse racing and breeding industries, we write to express our appreciation to you and your staff for your efforts on AB 2863.”

Conditioned Support

Gray has been steadfast in advocating for California online poker passage for more than a year, but standing in his way has been the powerful Native American community and horse racing industry.

Over the last 12 months, numerous tribes invested in gambling have petitioned that they, and only they, should have the right to offer online poker. Meanwhile, the horse racing community, whose economy is in crisis mode, wants a share.

Contrary to racing in Pennsylvania, New York, and Florida, tracks in the Golden State are prohibited from offering gambling games like slots to offset declining revenues.

Gray, who authored AB 2863 with fellow Assemblyman Reggie Jones-Sawyer (D-District 59), has apparently found ground to satisfy both sides. As is typically the case, money talks, and that’s especially true when the number is $60 million.

Gray and Jones-Sawyer’s proposition would direct the first $60 million in iPoker revenues not to the state but to the horse racing industry. 95 percent would be deposited to the California Horse Racing Board, with the remaining five percent going to the Fair and Exposition Fund.

The problem is online poker operators might not profit at such opulent rates, especially in the first year. Should the $60 million not be met, the nine leaders that signed the letter this week asked Gray to include a rollover provision.

“We recognize the $60 million annual payment in AB 2863 is intended to compensate the racing industry for being excluded from eligibility for iPoker licenses,” the document explained. “Our continued support for the legislation is predicated . . . AB 2863 should be amended to confirm that in the event the $60 million minimum were not fully funded in a given year, there would be a carry over in the following year(s).”

Photo Finish

While obtaining support from the horse racing alliance certainly gives momentum to Gray’s chances of finally seeing online poker legalized in California, it’s still a long track ahead before the legislation reaches Governor Jerry Brown’s (D) desk.

The next step in that process will take place on Wednesday when the California State Assembly Governmental Organization (GO) Committee hears AB 2863. Gray also chairs the GO Committee and has singled out the legislation for a full hearing this week.

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