California Online Poker Efforts Hit The Muck Once AgainLegislation Stalls Thanks To Issues Over 'Suitability' |
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Momentum to get online poker legalized and regulated within the state of California has fallen by the wayside thanks to the legislative session ending Wednesday. Yet again, poker players have to wait until next year.
There was serious progress made in 2016, as California lawmakers figured out a way to appease the racing industry and the tribes on one front by giving the former a nearly $60 million annual subsidy in exchange for not being eligible for online poker licenses. That deal was hashed out early in the year. California’s tracks already offer online wagering, the only form of online betting currently legal in the state.
While that matter was settled, the final hurdle that never was cleared was how to craft “suitability” language for companies that facilitated online poker for Americans in the legal gray area between 2006 and 2011.
The company under fire is PokerStars, as most tribal groups, though to varying degrees, oppose the operator being involved with California. A couple of tribes partnered with PokerStars, so there was no consensus among the tribes on suitability. In August, Assemblymember Adam Gray, sponsor of the online poker bill, released new amendments that would put PokerStars in a so-called penalty box for a period of five years. However, PokerStars and its partners argued that the language could amount to a lifetime ban.
Shortly after the amendments were released, the Poker Players Alliance and the PokerStars coalition switched their stance to opposing the bill.
The path to ending the stalemate in 2017 is unclear if PokerStars remains in the mix. The state’s tribal gaming industry includes roughly 60 casinos and a market worth more than $7 billion. California is by far the nation’s largest tribal casino market.
At one point this year, there was thinking that PokerStars receiving a license from the state of New Jersey, and launching its product there, would help the situation in California. That didn’t turn out to be the case.
Assembly lawmakers were poised to hold a vote on the measure and its new amendments in late August, but the vote never happened. It was a full-court press with almost no time left. No California online poker bill has ever been voted on by the full Assembly, though legislation successfully navigated through committee in both 2015 and 2016. There were many years of efforts with no vote happening.
The debate has dragged on for a decade, and in that time Nevada, New Jersey and Delaware have all legalized and launched online gambling industries.
A vote by the Assembly wouldn’t have guaranteed anything, as the Senate would have had to pass the measure as well. A top Senate lawmaker was quoted this summer as saying that there was “no rush” to get online poker approved. If it made it through the Senate, the bill would have fallen under the scrutiny of the governor.
California’s online poker market has been estimated at being worth close to $400 million, and the proposed tax rate on that is 10 percent. One tribal gaming insider told Card Player in early 2016 that California is only large enough for 6-10 unique operators. California Nations Indian Gaming Association Chairman Steve Stallings also said that the state has “maybe…one or two years” left of trying to get online poker legalized. In other words, 2017 might be do or die.
“If we want to put in place consumer protections and launch a business opportunity for California we better do it now,” Stallings said. “It will be a lost opportunity if we don’t. The attention levels and the level of interest in poker will die off.”
Between 2009 and 2010, California players accounted for 16 percent of U.S. revenue and four percent of worldwide Internet poker revenue. Gray said at a hearing this year that roughly one million Californians still play online poker for real money.
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