WORRYING DELAYS IN CALIFORNIA ONLINE POKER LEGALISATION
Pechanga alliance is still opposing AB2863.
The euphoria over the passage out of committee stage of Californias online poker legalization bill AB 2863 started to fade as the week came to an end with no floor vote in the California Assembly and time running out.
The Assembly adjourns today (Friday) and returns at the end of July for the last month of the current session, and unless something dramatic happens the chances of a vote are looking increasingly remote, especially in view of the continued strong opposition of the Pechanga-Agua Caliente tribal alliance.
The alliances opposition was underscored yet again this week in yet another letter to AB2863s patient author, Assemblyman Adam Gray proposing restrictions on potential competitors.
The letter shows that the seven tribes in the Pechanga-Agua Caliente coalition have not accepted Grays "bad actor compromise, which imposes a five-year block on any operator who provided services to US poker players after the passage of the federal Unlawful Internet Gambling Enforcement Act.
They are also opposed to an alternative suggestion that such operators could apply for licensing without the 5 year hiatus if they were prepared to pay a $20 million penalty in respect of their previous activity.
Such a relatively small penalty would still enable Pokerstars (whose competitive ability the tribes appear to fear) to enter the Californian market, and the alliance seems determined to disregard the fact that Pokerstars ownership and management has changed, and that the company has paid out hundreds of millions in federal settlements.
Instead, they argue that the post-UIGEA activity enabled the company to establish an unassailable market lead, although Pokerstars exited the US market after Black Friday in April 2011.
The Pechanga-Agua Caliente and associated tribes have in their latest proposal to Assemblyman Gray suggested some pretty draconian restrictions on potentially "bad actor" operators:
* A 10 year block on making an application for a licence on any operator who accepted US business after December 31, 2006, and the same restriction on the use of any tainted assets, even if the ownership of those assets has subsequently changed;
* A penalty of $60 million to be paid after the 10 year hiatus to the proposed Internet Gaming Enforcement Fund for use in policing and protecting the licensed and regulated industry in California;
* Legislative safeguards to ensure that these restrictions remain in force in the future.
Assemblyman Gray has yet to react to the proposed amendments to his bill, but they would appear to be so unreasonable that they place a further, and potentially fatal, obstruction to legalization in the time now available.
AB2863 has been filed as an urgency bill, which means that it will require a two thirds vote of approval in the Assembly and the Senate.