Sacramento Bee Op-Ed Calls For California Online Poker Efforts To Be Tossed Into The MuckTime Is Running Out For Golden State's Opportunity In 2016 |
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With a crucial vote on California’s online poker bill possibly coming this week, the issue in the Golden State has arguably never been more high-stakes.
Thanks to recent amendments that have drawn a new divide on the issue, ending the decade-long stalemate before the legislative session ends on Aug. 31 doesn’t seem like a sure bet. A compromise in the form of a nearly $60 million annual subsidy for the horse racing industry finally removed one major hurdle and provided real hope for the legislation earlier this year. Tribal groups didn’t want the racing industry to be involved with online poker.
What is all at stake is an intra-state online poker market worth around $400 million annually and potentially thousands of new high-tech jobs. Legalizing online poker would also keep California ahead in the gambling sector, as three other states already have online gambling industries and several more are considering the activity.
As the tension in Sacramento mounts, the editorial board from the city’s largest newspaper believes that the efforts should be scrapped. The Sacramento Bee op-ed this week called into question how lucrative online poker would be for California’s coffers.
In the most recent amendments, the tax rate was lowered to 10 percent, which is still significantly above Nevada’s tax rate but less than rates previously considered by California. Still, the Golden State is currently seeing nothing from the unregulated market. Assemblymember Adam Gray, sponsor of the online poker bill, said at a hearing this year that one million Californians still play online poker—and without consumer protections.
It has been estimated that California, a state with nearly 40 million people, could support 6-10 unique online poker operators. Thanks to more than $7 billion a year in gaming revenue, the state has by far the largest tribal casino market in America. The sheer size of the gambling industry in California, which also includes card rooms and racetracks, makes the state a coveted prize for the online poker industry, but at the same time has made it extremely difficult for any consensus to be reached on how to regulate and tax this form of gambling expansion.
Also in the proposed amendments is so-called “suitability” language for online gambling companies not based in California. The online poker portals that facilitated games for Americans between 2006 and 2011 in what has been called a legal gray area would have to sit on the sidelines in California for five years, just like they are in Nevada. However, some have called into question how long the ban would actually be should the bill be implemented.
Amaya Gaming, parent company of PokerStars, has said that litigation will come if the bill passes in its current form because of constitutional questions. The bill needs to pass a full Assembly vote and then make its way through the Senate in just a matter of days.
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