Gatto Defends In-Person Banking Clause in Online Poker Bill

Posted on December 22nd, 2014 by Jon Pineda
California online poker Mike Gatto

Assemblyman Mike Gatto wrote an op-ed in which he explained why he felt in-person deposits would help, not harm, California online poker. (Image: Rich Pedroncelli / Associated Press)

The California online poker bill proposed by Assemblyman Mike Gatto (D-Glendale) has a number of features that have proven controversial.

There’s the bad actor clause that PokerStars and others aren’t happy about, and the exclusion of the horse racing industry will certainly earn the bill a few more enemies.

But of all the various clauses in the legislation, none has raised concerns from players more than a requirement for players to make their first deposits and withdrawals in person at casinos and card rooms.

Those who see the great untapped potential of online poker in California have expressed concerns that such a requirement could stop players, especially recreational and casual ones, from ever joining online poker sites.

But in an op-ed for U-T San Diego, Gatto wrote that this clause was his innovative way to solve all of the concerns held by online gaming opponents in one fell swoop.

All Concerns Met Through In-Person Deposits

“Opponents have four concerns,” wrote Gatto. “The first is that because gaming budgets are finite, online play would reduce visits to local ‘brick-and-mortar’ gaming and hospitality establishments.

The second concern is that small- and medium-sized operators would be unable to participate in the market, meaning that only big businesses would benefit. The third concern is that online poker would foster money-laundering and cheating.

The final concern is that it could result in minors gambling, using the anonymity of the Internet.”

According to Gatto, requiring people to join online poker sites the same way they sign up for other accounts, like those at a bank, is the easiest way to meet these concerns.

“Just like opening a bank account, the only way to open an online-poker account in California would be to present yourself in person at a ‘branch’ and be ‘validated’ by showing two forms of identification,” Gatto wrote. “Initial deposits would occur in person, although subsequent ones could be made online. A similar rule would apply for cash-outs above a certain amount or frequency.”

Such a system, Gatto says, would allow smaller operators to get some benefit out of online poker by becoming satellite service centers that could take deposits and new signups for the bigger operators actually running the sites. It would also make it virtually impossible for minors to open accounts, and would provide another layer of security against money laundering or cheating.

Players Worry System Could Prevent Sign-Ups

But while those arguments may be sound, some Californians aren’t convinced. Responding to a tweet by Gatto about the op-ed, a handful of people argued that the in-person requirements would kill sign-ups.

“Making people sign up in person would doom online poker to failure,” Tweeted Luke Johnston. “People won’t bother.”

Iipay Nation Faces Online Poker Setback

Meanwhile, the Iipay Nation of Santa Ysabel is facing setbacks in their efforts to launch online poker from their reservation, even without the state of California regulating the practice.

The tribe now faces a temporary restraining order from federal district judge Anthony Battaglia, one that will prevent the tribe from offering real money online bingo to California residents.

The ruling makes it likely that courts would also disallow the tribe from spreading real money online poker, at least until the case is argued in court.

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