AB 167 Introduced – Bad Actor Clause Dropped and Horse Tracks Added

Posted on January 23, 2015

The fight for online poker in California took an unexpected twist on Thursday with the introduction of a new bill to legalize the game. The Internet Poker Consumer Protection Act of 2015 (AB 167) was introduced on Thursday by Assemblyman Reggie Jones-Sawyer and this bill seeks to address many of the key concerns that have held up online poker legislation for years.

Jones-Sawyer promised sweeping changes last year when he announced that he would refile the file in 2015. The two largest changes have to do with race track participation and the bad actor clause. Under the new bill, race tracks will be permitted to offer online poker in the state. The industry had been excluded in recent years and tensions had been mounting over the issue.

The other major change is the virtual elimination of the bad actor clause from the bill. There is language in the bill that would ban companies that have been convicted of felonies in connection with poker, but PokerStars was never actually convicted of felony activity.

Bill Highlights Include Strict Player Identification and Penalties for Illegal Gambling

As expected, AB 167 covers most of the topics involving licensing, player registration and taxation. Below are a few of the bill highlights:

• Licenses are good for four years and can be renewed for four years.
• Sites will be taxed at 8.5% of gross gaming revenues
• $10 million licensing fee
Only online poker will be legal
• License holders can operate two online poker sites
• Players must be 21 or older and provide verification
• Once passed, gaming commission has 270 days to setup regulations

One new addition to this bill is penalties against players who choose to gamble on unregulated online poker sites. According to provisions under section 19990.303 of the bill, a player is not allowed to gamble on any site not authorized by the state. Those choosing to do so are subject to felony prosecution, including prison time.

Players will also have to provide extensive information to prove they are of legal age and within state boundaries. In order to play for real money in California, players must submit the following:

  • Legal name
  • Primary home address
  • Primary phone number
  • Social Security number
  • Valid Email Address
  • Proof that the player is 21 or older

Pechanga Already Oppose Bill

It didn’t take long for the Pechanga to respond to the new bill. Late Thursday, Pechanga Tribal Chairman Mark Macarro released the following statement:

“There is much for tribes to dislike about this bill… [AB 167]We are disappointed that the bill disregards important principles from a broad coalition of respected tribes and card rooms that help prevent corporations and entities that previously violated federal law from profiting from tainted software, brands, and databases derived from illegal activity.”

“Tribes have been steadfast in the principle that online poker be consistent with California’s longstanding public policy of limited gaming, and that means keeping it to just tribes and card rooms. California voters have always had the final say on gaming expansion and they have already rejected expansion of gaming for horse racing.”
“The Pechanga have long opposed both horse racing participation and involvement by PokerStars. Last year, the Pechanga reached a consensus on online poker with other key tribes that included a united front against allowing PokerStars into the state. On the surface, it appears that their resolve will remain steadfast against Amaya-run PokerStars.”

Solid Start but Divide May Prove Too Great to Achieve Passage

One must commend Assemblyman Jones-Sawyer for his initiative in creating a bill that attempts to bridge the divide between stakeholders in the state. Unfortunately, there is still a lot of ground to cover before parties will allow the issue to move forward.

It is hard to see the Pechanga back down from their position regarding PokerStars without some type of concession from either other stakeholders or even Amaya. The horse racing issue is in reality a lesser issue that would have likely been resolved easily provided the bad actor hurdle be cleared.

Expect the bad actor issue to become the primary focus of negotiation for the next few months. However, if significant progress isn’t made by April there will likely be little chance this bill passes in 2015.

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James Guill

Originally a semi-professional player, James transitioned to the media side in 2008. Since then he has made a name for himself reporting for some of the top names in the industry. When not covering the poker world, James travels around central Virginia hunting for antique treasure.

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