PLAYERS PENALISED IN NEW CHANGES TO CALIFORNIA ONLINE POKER LEGALISATION BIL

Thursday July 7, 2011 :  Sen. Correa's measure will target players as well as unlicensed operators
 
One of two competing intrastate online poker legalization bills – SB40 authored by state Senator Lou Correa and supported by COPA – has widened its licensing possibilities following the latest amendments, reports The Capitol Weekly newspaper.
 
But it has also introduced penalties for playing on unlicensed online poker sites, including seizure of equipment belonging to players.
 
The competing bills face a state Senate committee next week, when the merits of each will be considered.
 
Correa believes his online poker proposal will survive procedural deadlines even if he misses Friday’s policy committee hearing, because back in May he placed an urgency clause on the bill, making it eligible to bypass deadlines that can kill legislative proposals.
 
His most recent amendments open up the opportunity for more types of companies to offer poker, while more harshly punishing those who break the rules, The Capitol Weekly reports.
 
Both Correa’s bill and a competing online poker measure, SB45 from Sen. Rod Wright will be heard in the Senate Government Organization Committee on July 12. It will be an informational hearing, and neither bill is currently scheduled to come up for a vote. Sen. Wright is also chair of the committee, and his bill is also protected by an urgency clause, although it was introduced back in December (see previous InfoPowa report).
 
Among the key new provisions in Correa’s SB 40 is a harsh new punishment that targets players as well as operators, and proclaims that either “operating or playing on an unauthorised website" could result in a $10,000 fine, with violators subjected to “seizure and forfeiture of all personal and real property used in or derived from the operation of or play on an unauthorised website.”
 
If passed, this would make the Californian law similar to draconian Washington state measures that also specifically target players.
 
Correa appears to have opened eligibility to become a poker provider in the amendments, too. SB 40 was limited to “up to 3” licenses. The revised bill removes this limit, while stating that there is “no requirement of membership in a coalition; no preferences among eligible entities.” The amended bill opens up eligibility to current gaming tribes and card rooms.
 
Also new is a $5 million, non-refundable application fee for the state of California. If a bid is approved, much of that money would then count against later payouts to the state. But the high fee is designed to keep less prepared companies from attempting to enter the market, opines the newspaper, noting that the bill still calls for the state to get 10 percent of the take.
 
However, new provisions seek to frontload this revenue. Entities that apply for a license within 90 days of the bill going into effect would prepay $50 million to the state against their future revenues, while those applying after have to pay $250 million.
 
SB40 now also includes a federal opt-out provision, allowing California to go its own way if the US federal government passes its own online poker solution, which will presumably include a clause permitting individual state to opt out of any federal measure.
 
Controversially, there is also provision to protect exclusivity clauses in tribal gaming compacts.
 
Senator Correa’s decision to open up the eligibility of SB40 has been closely linked with one of its key supporters, the California Online Poker Association, a coalition of Indian tribes and existing Californian card rooms which has come out in support of the Correa bill.
 
“Absolutely,” said COPA spokesman Ryan Hightower, when asked if his group was still behind the bill. “The entire set of amendments reflects a greater chance for California to earn more income.  I think within the next 75 days we’re going to see some movement on the bill, and it’s still in a very good position to pass this year,” he said.
 
So far the legalization concept has been the subject of 6 hearings totalling over 15 hours of testimony, and there have been so far unheeded calls to merge the two competing proposals into one cohesive bill.
 
Among those who oppose the Correa bill is the California Tribal Business Alliance, which claims that the $50 million licence buy-in is just another way tin which COPA seeks to exclude competitors and leave the business to the card rooms and gaming tribes.