What AB 2863 says and does
The Internet Poker Consumer Protection Act would only include traditional poker games. Any activity that involves a dealer or banker position is not permitted. Pai Gow is mentioned as a game that would not be allowed.
Players would be required to be at least 21 years of age. Participants must be located inside California at the time of play to get into action. Geolocation and player verification processes must be followed to keep out of state and underage players out of the system.
The bill’s language talks about intrastate poker numerous times. It never addresses whether California’s online poker industry could network with other states.
The bill is an urgency statute. This means that it would go into effect as soon as it was signed into law by the governor. It requires a two-thirds vote in both the state assembly and senate to pass.
This bill does not address the tax rate or deposit required by licensed poker sites. A previous version included a $15 million deposit and a 15 percent tax rate on poker operators.
Gaming regulators have 270 days to create regulations. This task includes addressing underage gambling, problem gamblers, software and hardware standards, employee licensing and the approval process for licensees.
There is no language in the bill that would exclude companies that operated without a license in the state. The decision to license individuals and companies is mostly left up to regulators. Most felons, misdemeanors involving dishonesty and moral turpitude, applicants less than 21 years of age, those associated with organized crime and gaming violators are the only ones specifically excluded from potential licensing.
Any crime involving unlicensed gambling is a felony under AB 2863. The Unlawful Gambling Enforcement Fund is created and funded by this bill. It would be used to investigate and prosecute illegal gambling criminally and civilly. The exact percentage and cap on funding is not addressed by the bill. Like the licensing deposit and tax rate, that section is purposely left blank.
Benefits for California racing industry
AB 2863 guarantees the first $60 million per year to the horse racing industry. The percentages were slightly altered from a previous version. The Fair and Exposition Fund would receive five percent of this money, up to $3 million annually.
Of the remaining 95 percent, One and three-twentieths percent would go towards retirement plans for jockeys. The same percentage would go towards health and welfare benefits for jockeys, past and present, as well as their dependents.
Two and three-tenths percent would go towards employee benefits for track employees. The other ninety five and four-tenths would go towards purses of California horsemen.
While the horse racing industry is guaranteed to receive the first $60 million in annual revenue, it is still not completely left out of online poker. The bill contains language that allows it to enter into partnerships with operators:
“An agreement between a licensed operator and a service provider that is a horse racing association operating pursuant to Chapter 4 (commencing with Section 19400) shall ensure that at least 50 percent of the gross gaming revenue that the licensed operator derives from the service provided by the service provider is paid to the service provider.”
Is 2016 finally the year?
There are many loose ends that must be cleared up for AB 2863 to move forward. Talks are expected among interested parties in the coming months on the hope that 2016 may finally be the year for regulated California online poker.