California Online Poker Bill Dead in Sacramento

Posted on August 29th, 2016 by Alana Markoff
California online poker Adam Gray

Adam Gray’s California online poker bill is being shelved for 2016, but he’s expected to pick up his legalization efforts in January. (Image: adamgrayforassembly.com)

California online poker has been rejected yet again.

Two days from now, the state legislature will hold its last session with the ability to pass bills before adjourning for 2016. With just 48 hours remaining, there’s no hope left for Assembly Bill 2863, Assemblymen Adam Gray (D-District 21) and Reggie Jones-Sawyer’s (D-District 59) final all-in push to regulate poker online.

AB 2863 would have charged operators $12.5 million per license and taxed gross revenues at 10 percent.

Only current card rooms and Native American casinos would have been given the option to purchase an internet poker license. For their sitting out, horse tracks would have received up to $57 million annually from the license revenue and taxes collected each fiscal year.

Discussing the specifics of AB 2863 now seems like a waste of time. It passed both the Assembly Government Organization and Appropriations committees and has been read three times on the Assembly floor, but it didn’t manage to receive a vote.

Close but No California

For yet another year, negotiations between the various invested groups failed to find middle ground to get California online poker passed. The Golden State has tribal and pari-mutuel gambling, and also allows for non-Indian card rooms.

But between the powerful tribes, card rooms, horsemen, state politicians, online poker operators, and the general public, there’s simply been too many grievances.

The primary roadblock rests with the tribes. There are over three dozen Native American casinos in California, and the organizations behind the venues are at odds with each other in determining how internet poker should be regulated.

A coalition of six tribal governments led by the Pechanga Band of Luiseño Indians and Agua Caliente Band of Cahuilla Indians wrote to Gray this summer demanding that bad actors, poker companies that continued operating in the US following the passage of the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA), be barred from the market.

“We deeply appreciate your leadership in bringing stakeholders together to try and resolve the outstanding differences regarding internet poker legislation,” the coalition wrote. “At a time when California was making painful budget cuts to education, public safety, and social services, these and other offshore poker sites evaded paying tens of millions of dollars in California taxes.”

Meanwhile, the San Manuel and Morongo Bands of Mission Indians spent much of 2016 traveling around the state with PokerStars team pros to promote the legalization of online poker.

Better Odds in 2017?

Dating back to 2013, California online poker bills have littered the State Capitol in Sacramento.

First it was the Internet Poker Consumer Protection Act, then SB 40, 45, and 51. Then AB 2291 and SB 1366, followed by AB 431, 167, and 9.

And there were others. This year’s AB 2863 made the most progress, but in the end its fate is exactly the same as all the previous legislation before it.

Efforts are expected to continue in 2017 as lawmakers won’t let the untapped revenue stemming from online poker continue to go offshore forever.

At least one major news organization is happy that California internet poker continues to fail.

The Sacramento Bee, the third-largest daily in California by circulation, published an op-ed last week calling Gray’s legislation a “losing hand.”

“With the advent of Indian-owned casinos, anyone who feels a need to place a bet can drive a short distance to a casino. But legalizing internet poker, and no doubt other forms in the future, would allow anyone with a smartphone and a credit card to place bets and burn through their money at any time,” the paper’s editorial board opined.

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