Friday, April 22, 2016 : BAD ACTOR CLAUSE RAISED AGAIN IN CALIFORNIA ONLINE POKER BILL (Update)
 
Late amendment indicates there is still demand for notorious competition-killing clause.
 
Assemblyman Adam Gray's California Assembly bill AB2863 – due for consideration at a hearing next Wednesday- became the centre of attention this week when a late amendment again raised the spectre of the notoriously anti-competitive "bad actor" clause.
 
Tribal opponents of the entry into the local market of Pokerstars have repeatedly insisted on a bad actor clause in any online poker legalization measure, seeking to exclude applicants who previously offered online poker in the United States, allegedly in contravention of the law.
 
Demands for the inclusion of such a clause have contributed to the frustration of repeated legalization attempts over almost a decade in the California Legislature.
 
The new amendment states:
 
"The bill would become operative when criteria are established by statute addressing involvement in Internet betting prior to the state’s authorization of Internet poker pursuant to its provisions."
 
And:
 
"The act that added this subparagraph shall not become operative until criteria are established by statute to address involvement in Internet betting prior to the state’s authorization of Internet poker pursuant to this chapter."
 
It should (again) be noted here that although Pokerstars – under its former ownership – was involved in a multi-million dollar settlement with US authorities some years back, it has never been convicted of wrongdoing.
 
In recent times it appeared that the insistence on a bad actor clause was in most quarters diminishing following the acceptance of  Pokerstars-Amaya by the tough New Jersey regulators, and tribal opposition appeared to be increasingly focused on keeping the race tracks out of any legalised poker sector.
 
The exception has been the powerful Pechanga tribe and its allies, who remain resolute in demanding the inclusion of a bad actor clause.
 
However, there has been speculation that the charges against Amaya's suspended CEO David Baazov following inside trading charges may have resurrected interest in the bad actor issue, although that has not been confirmed.
 
That said, the California Nations Indian Gaming Association recently opined through chairman Steve Stallings that the Baazov affair complicates Pokerstars' position in California  There has to be a reason behind the new and somewhat ambiguous draft amendments, and for another "tweak" that has removed the need for AB2863 to secure Appropriations Committee approval, thus making for a faster advance.
 
Next Wednesday's hearing promises to be a lively and interesting affair.