CALIFORNIA LEGISLATORS CONSIDER A WORKAROUND ON THE BAD ACTOR CLAUSE?
 
New amendments to AB2863 hold the hope of progress at last.
 
New amendments to California Assembly Bill AB2863 revealed this week show that legislators are still working hard to broker some sort of compromise that will appease tribal groups, cardrooms and other interested parties in the search for intrastate legalization of online poker.
 
Detailing the latest changes, the usually reliable publication Online Poker Report notes that the amendments have once again stressed that the bill is aimed at the intrastate legalization of online poker only – not other genres.
 
OPR goes on to detail the amendments here: http://www.onlinepokerreport.com/wp-content/uploads/2016/06/AB-2863-amendments.pdf, explaining that the changes represent issues which were previously left open, including the key "bad actor" clause which has proved to be a major point of difference, especially with some of the tribal interests.
 
The solution may be in the form of a cut-off date which has now been proposed as December 31, 2011 (eight months after Black Friday) which would exclude from licensing any operator who after that date “accepted a bet or wager on any form of Internet gambling, or engaged in a transaction relating to those bets or wagers, from a person located in the United States” after that date is presumed unsuitable for licensure"
 
That would appear to give Pokerstars a shot at the Californian market, but theres a further proviso triggering the bad actor clause if:
 
"A member of the board of directors or the ultimate parent company of, the chief executive officer of, or a shareholder holding more than 10 percent of the shares of, the applicant, or its corporate or marketing affiliate, was directly involved in an executive decision-making capacity in facilitating a wager or financial transaction relating to Internet gambling in the United States and that person remains affiliated with the applicant at the time of the application." There is no cut-off date attached to this clause.
 
Other proposals centre on marketing restrictions to ensure all operators start on an equal footing. This involves the restriction of service providers and operators, who may not use their existing player or customer lists for marketing purposes.
 
Gaps in the tax and licence fee elements of the original bill are also addressed, with proposals that include a licence fee of $12.5 million as a one-off payment (as opposed to a payment that could written off against future taxes).
 
Taxation is interestingly based on a sliding scale dependent on the total revenues generated by the Californian regulated industry, ranging from a tax rate on GGR of 8.84 percent if the industry generates GGR of $150 million to a maximum of 15 percent if the industry generates $250 million.
 
Sources close to the issue have emphasised that the amendments have yet to be agreed and voted on, but the hope is that they will be included in the bill and sent to the Californian Assembly for committee hearings later this (June) month.