New Online Poker Bill In California Continues PokerStars Debate

California Indian Tribes and stakeholders are feeling a bit of déjà vu as local Assemblyman Reginald Jones-Sawyer has recently introduced yet another online poker bill. While the debate over California poker sites and the suitability of private operators such as PokerStars has been ongoing, Jones-Sawyer’s bill brings something different to the table- rather than positioning itself as an end-all solution, it is merely meant to be a vehicle for negotiation.

A Breakdown Of AB- 1667

The proposed bill is called the Internet Poker Consumer Protection Act, or AB-1677. The bill is not sponsored by any of the tribes or stakeholders currently engaging in the debate, which shows that Jones-Sawyer is remaining completely neutral in his efforts. Some of the main points of AB- 1677 are the following:

Local cardrooms and casinos can offer online poker to patrons age 21 and older.

A $12.5mil price tag for a 7-year license.

Operators would be charged a tax between 8.847% and 15% depending on their revenues.

The bill would create the Unlawful Gambling Enforcement Fund and establish a task force that targets unregulated overseas operators.

There are no provisions for “bad actors” that want to enter the market.

The PokerStars Controversy

The biggest point of contention in the online poker debate has been how to treat operators that previously held a presence in the state without being licensed. PokerStars was found to be in violation of the Unlawful Internet Gambling Enforcement Act, and prior bill proposals would have required offenders to wait at least 5 years before obtaining licensure.

California is a house divided when it comes to PokerStars, with the Pechanga Band and Agua Caliente Band leading the side that opposes the reentry of the operator. Amid a bevy of reports against PokerStars including a $25,000 fine in NJ for misuse of geolocation technology, Pechanga Chairman Mark Macarro had the following to say, ““What we know for certain is that PokerStars/Amaya is even more of a sewer swamp than we originally thought, hence the need to keep strong on bad actor language.”

On the other hand, the Morongo and San Manuel bands have been actively pursuing a licensure agreement with PokerStars for quite some time. Aside from online poker still being questionable in the state, the relationship between the tribes and PokerStars is marred by a slew of administrative discrepancies and allegations of insider trading.

Good Step Forward... But No Resolve.

There is no doubt that the Internet Poker Consumer Protection Act is a good starting point for continuing the discussion on online poker. All sides of the table seem to be receptive of Jones-Sawyer’s efforts, including the California Nations Indian Gaming Association and various tribal lobbyists. The goal now is to clear the major hurdles that are preventing a resolution from occurring. The most glaring issue is that officials do not know if online poker will even be considered legal in the coming years. Attorney General Jeff Sessions recently made a comment about re-exploring the DOJ’s opinion under the Obama Administration that the Wire Act only applies to online sports betting.

The current political climate is also quite tumultuous, with immigration and funding being the most important economic issues to address. At this point, it remains unclear how far down the totem pole gaming policy is, and tribes are just waiting to see which way the wind blows in terms of legislative priority. There is no doubt that legal California gambling sites would add a much needed boom to local tax dollars even if it's only poker coming into the fold right now.

Ironing out the bad actor language in the bill will most likely be the issue that takes the longest to address, but it is also the most important. It has been the most divisive piece of the online poker puzzle, and once a compromise is made it will be much easier to pass legislation.

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