Latest CA online poker bill draws on past proposals
Assemblymember Reginald Jones-Sawyer is the sponsor of AB 1677.
The Southern Californian represents an area of LA which is home to the University of Southern California and Downtown Los Angeles. It is primarily an urban population which currently houses no card clubs.
It has been nine years since the first online poker bill was proposed in the state. None have come close to being passed in to law, mostly because of the diverse interests of the tribes and casino entities involved in the decision.
AB 1677 does attempt to address some of the conflicts of interest.
Racing subsidy is included
The bill appropriates the racing compromise from Assemblymember Adam Gray’s 2016 bill. The compromise aimed to appease the horse racing industry, which believes online poker will cannibalize the gaming market in the states.
Racetracks would not be allowed to offer online poker solo under AB 1677. The racing industry does benefit, though, in that it would receive a yearly stipend of 95 percent of the first $60 million in online poker revenue.
Moreover, tracks would be able to pair with online poker providers, but would need a deal structure which saw at least 50 percent of the revenue goes back to the track.
The bill also chooses to remain vague about bad actors, which is another issue which has caused problems in prior iterations of the proposed law.
There are some suitability requirements, but unlike past bills, there is nothing explicit about “bad actors” like PokerStars, which faced the US market post-Unlawful Internet Gambling Enforcement Act (UIGEA).
PokerStars partnered with the Morongo tribe, San Manuel, and Commerce, Bicycle, and Hawaiian Gardens Casinos in 2014. There has been intense debate between this group and other tribes in California as to if and for how long PokerStars might have to stay out of the market should the law pass.
License fees and tax rates
Casinos looking to offer online poker under the proposed law would pay a $12.5 million licensing fee which would cover the property for seven years.
Licensed providers will be taxed based on revenue at one of four rates between 8.847 percent (licensees earning less than $150 million in revenue a year) and 15 percent (casinos earning more than $350 million in revenue a year).
Don’t get your hopes up, Californians
We are approaching a decade’s worth of online poker bills in the state and not one has gotten close to passing.
Chairman of the Morongo Band of Mission Indians Robert Martin told Online Poker Report in December that he did not think the various tribes would be able to see eye-to-eye and get something passed in 2017.
Steve Stallings of the California Nations Indian Gaming Association (CNIGA) agreed, noting, ‘“I don’t really see any prospects for anything happening.”