Wednesday December 03,2014 : EARLY START FOR CALIFORNIA ONLINE POKER LEGALISATION
New bill introduced to the House of Assembly…but bad actor clauses remain a problem.
The debate on internet poker legalization is once again in the California headlines as the state embarks on its fourth year of deliberations on the controversial topic, which involves tribal, racing, online and card room interests.
The move Tuesday came from Assemblyman Mike Gatto, a respected state politician who had a bill ready to go last year but stood aside to let Assemblyman Reggie Jones-Sawyer take the lead; that effort was unsuccessful.
This year Gatto, who also chairs the Assembly Committee on Appropriations, is taking no chances and has launched his bill AB9 in the opening days of the new session, although he expects extensive debate will carry the proposal well into 2015.
Thus far there is no sign of companion legalization in the state Senate, but its early days.
Although Gatto hopes he has a draft that will overcome most objections, his bill has many similarities with predecessors in that it wants to keep licensing exclusively to tribal casinos and commercial card rooms within the state, and it continues to hew to the protectionist line of including the now notorious "bad actor" clauses which keep out serious competition like Pokerstars.
The Gatto bill continues to exclude the racetracks, another point of dissension.
Provisions for enforcement, licensing and fees are also very similar to the Jones-Sawyer proposal.
That applies especially to the "bad actor" proposals, which exclude entities which allegedly continued to operate illegally in the United States after December 2006, when the UIGEA kicked in.
All of which means that the coalition formed by Amaya-Pokerstars, the Morongo and three commercial card rooms will likely have something to say.
The Gatto draft introduces new language in the phrase "covered assets,” a legal term which covers a wide spectrum of branding, technology, software and data even remotely related to bad actors; that seems to have been included in a deliberate attempt keep Pokerstars and Full Tilt out of the market despite the radical change of ownership recently
But, as usual, there are political and legal caveats that might offer workarounds for clever lawyers, including one which offers an exception if the operator applying for licensing can convincingly show that the covered assets will not "….adversely affect the integrity of, or undermine public confidence in, intrastate Internet poker or otherwise pose a threat to the public interest or to the effective regulation and control of intrastate Internet poker."
Applicants for online poker licenses must have operated an authorised land operation for at least three years without any run-ins with the authorities before they will be considered for an internet poker licence.
Marketing affiliates will find that their involvement in legalised Californian poker has been laid out in considerable detail in AB9, and the bar has been set rather high for registration.
Players will find that the bill tries to keep under aged and problem gamblers away, and assist in preventing money laundering and crime, by requiring that players appear at designated land-based centres (ie tribal casinos or card rooms) personally if they wish to set up online poker accounts.
The initial deposit by a player must also be made at such centres throughout the state, and there is even a provision that presumably high-value or frequent withdrawals will have to be carried out in person and at a land centre.
It seems to be a very cumbersome process that negates much of the convenience and efficacy of the internet, but does route players physically to land venues.
“The status quo is a lost opportunity,” said Gatto in launching AB9. “California could receive significant revenue for merely regulating and legitimizing an industry that Californians already participate in but send their dollars overseas.
"California has led the world in computer and internet innovation, and there is no good reason why we can’t continue to lead with a sensible online-poker framework,”
See the detail on AB9 here: