Bad Actor Clause May Be Least of California’s Problems

Bad Actor Clause Not to Blame for CA's failure to pass iGaming bill

Throughout the course of 2014 the Bad Actor debate slowly took over the online poker headlines in California, and when it looked like the state would be waiting yet another year to pass an online poker bill, many were quick to point the blame at PokerStars and their allies, or the coalition that lined up against them depending on their purview.

It’s certainly an interesting and important topic, but truth be told, the Bad Actor debate merely masked the underlying problems in California. Long before PokerStars and Bad Actors flooded discussion of California online poker, the state was given several chances, dating back to 2009, to pass an online poker bill and they completely whiffed.

Pinning California’s inability to pass an online poker bill on PokerStars or Bad Actor language is akin to blaming a 30-point blowout loss on the benchwarmers you inserted in the fourth quarter.

The best indicator that PokerStars had little to do with the failure to pass an online poker bill in California can be seen in the lack of blame being thrown at the company’s feet now that the bills are officially scrapped. In the lead up everyone was squawking about who would get the blame, PokerStars and company or the coalition lined up against them, if a bill wasn’t passed this year, but we were all duped.

Neither of these groups has received much blame because the failure wasn’t directly attributable to PokerStars or Bad Actors.

If PokerStars was the reason online poker failed to pass in California you would expect plenty of people (especially from the opposition side) to start pointing fingers at PokerStars involvement.

Instead, what we heard was there simply wasn’t enough time, and that California needs to get it right. No mention of PokerStars, only passing references to Bad Actor clauses, and no mention of the two coalitions that formed with PokerStars, the Morongos, the Bicycle Casino, the Commerce Casino, and Hawaiian Gardens on one side and 13 other tribes led by the Pechangas, the  Agua Caliente, Pala, and others.

When the bills were shelved it was as if the most contentious point over the past three months never existed.

PokerStars’ Director of Group Strategy and Business Development, Guy Templer, spoke to EGR Magazine (paywall) offering up his view on what happened in California:

“No, PokerStars was not responsible for [for the collapse of online poker legislation]. There were many factors at play. Although consensus towards internet poker was at its strongest in the last few years, it was still not universal.”

Templer’s statement seems innocuous enough, that there were too many unresolved issues already on the table, and adding PokerStars to the mix didn’t tip the scales in one direction or another.

Reading between the lines it may even say more. Templer’s comments could be an indication (conjecture alert) that certain interests in the state are not on board with online poker (even though some may publicly say they are) and are doing everything they can to create wedge issues to drive the pro-online poker factions apart.

The longstanding hurdles

The real problem in California has to do with the state’s size. As I’ve written in the past, California has the size and population of a country, which has led to not one or two gaming power players, but a dozen powerful interests, all looking to negotiate the best deal for themselves, and all with different goals and aims to satisfy.

The declining racetrack industry in California wants to be part of the process, but the tribes and cardrooms want to cut them out (why court more competition?) and deny them the ability to apply for online poker licenses.

The tracks themselves have some political clout (nowhere near some of the large tribes or even cardrooms) and they are being supported by labor unions, which makes racetracks a very thorny issue to deal with.

There is also the not so small matter of how to incorporate small tribes and small cardrooms. Will a new revenue sharing agreement be put in place between the tribes? will tribes and or cardrooms be allowed to operate as skins? Will they be cut out completely?

On top of all these other complex issues, you can then add in Bad Actor clauses and PokerStars.

Steve Ruddock

About

Steve Ruddock is a longtime member of the online gambling industry. He covers the regulated US online casino and poker industries for variety of publications, including OnlinePokerReport.com, PlayNJ.com, USPoker.com, and USA Today.

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