California Online Poker Receives Possible Lifeline Thanks to Daily Fantasy Sports

Posted on February 12th, 2016 by Alana Markoff
California online poker Adam Gray

California online poker is being pushed by influential tribal leaders who are urging Assemblyman Adam Gray, left, to reconsider his daily fantasy sports bill and tackle the interactive card game. (Image: Rich Pedroncelli/Associated Press)

California online poker isn’t dead just yet following letters from two of the state’s most powerful and politically influential tribes that are calling on State Assemblyman Adam Gray (D-District 21) to reconsider his daily fantasy sports (DFS) legislation in favor of iPoker.

Gray is one of three online poker architects in California, but like the other propositions, his bill (AB 431) failed to reach the Assembly floor last year. AB 431 did receive approval from both the Governmental Organization and Appropriations committees, though the legislation ultimately died when the government recessed.

It’s a different story in 2016 for Gray and DFS, his AB 1437 to legalize and regulate companies like DraftKings and FanDuel swiftly passing the Appropriations Committee and easily gaining approval from the Assembly in a 68-1 vote on January 27.

AB 1437 now resides in the state Senate. Should the chamber also endorse the daily fantasy bill, it would move to Governor Jerry Brown’s (D) desk to be signed into law.

AB 1437 would require DFS platforms to pay a one-time licensing fee to the state and pay annual taxes based on their total gross revenues.

What About Us?

Both the Morongo and San Man Band of Mission Indians are none too happy about DFS being rushed through the Sacramento legislature while iPoker, the online gaming format they’ve been pushing for, is seemingly being shelved.

Morongo Chairman Robert Martin wrote in a letter to Gray last week that AB 1437 rewards DFS operators “with no repercussions for violating state law.” 

Martin further explains, “As you know, California’s gaming tribes have made significant contributions to the state and local economies by offering games that are legal under state and federal law. As such, our members are very concerned that a retroactive approval of a form of gaming that is otherwise illegal, simply because it is popular, is a very dangerous precedent.”

San Manuel Chairwoman Lynn Valbuena closely echoed Martin’s statements in her letter. Both tribes are part of the Californians for Responsible iPoker, a coalition of tribes, card rooms, and businesses that includes Amaya and PokerStars.

Due to the fact that the deadline to introduce new legislation in the capital is a week from today, February 19, Internet poker advocates are hoping Gray might appease the tribal leaders by amending AB 1437 and adding an interactive poker clause.

Native American DFS

Tribes have held a monopoly on the gambling industry in California since Proposition 1A was passed in 2000, which permitted tribal groups to offer casino-style gaming on Indian land. That’s why any motion to change that long-standing decree will be routinely met with resistance from Native American leaders.

However, the current law says nothing about online gambling.

“We are ahead of the curve,” Gray said late last month. “The legal question is one for our Attorney General and the courts… California is setting the tone for the rest of the nation on what a regulatory framework should look like.”

Should Gray’s legislation become law, the San Manuel and Morongo Indians could quickly enter the DFS market by using a third-party software supplier as poker legend Phil Ivey recently announced he’ll soon be doing.

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