AB 167 Removes Two Major Roadblocks to Online Poker Legalization in California

Jones-SawyerA new California online poker bill was introduced on Thursday and could serve as the state’s best hope for legalizing the game. Assemblyman Reggie Jones-Sawyer introduced AB 167 on Thursday, The Internet Poker Consumer Protection Act of 2015.

Jones-Sawyer stated last year that he would introduce a new bill and would address many of the key concerns from stakeholders from the last bill. In a statement from Jones-Sawyer, “The reintroduction of this legislation comes on the heels of a very thoughtful and collaborative discussion process that included substantial input from both the state’s Department of Justice and Gambling Control Commission. It is absolutely essential that we have a proper regulatory structure in place that provides safe and compliant internet poker access.”

Bill Removes Key Roadblocks to Legalization

The two most controversial parts of the bill could prove to be the keys to finally legalizing online poker. First, AB 167 lacks the dreaded “bad actor clause” that has been seen in nearly every online poker bill in the last few years. The main target for such a clause has been PokerStars.

There are some portions of the bill that could have applied to the old regime at PokerStars, but none that would apply to the company under Amaya. The closest section that would apply to PokerStars is Section 8(A) under 19990.405. Even in that section, PokerStars must have been convicted of a felony in connection with accepting bets under the UIGEA. PokerStars was never officially convicted of any wrongdoing.

The other major potential roadblock to legalization that was removed by this bill involved horse racetracks. Under this bill, if passed, horseracing tracks would be permitted to apply for a license and operate an online poker site. This move was to be expected after word leaked late last year of a potential legal challenge by racetracks if they were not included.

Fees, Player Registration and Taxes All Clearly Defined

This new bill clearly sets forth what players and potential licensees can expect under a legalized marketplace. The licensing fee under AB 167 would be $10 million. A license would allow an operator to operate up to two online poker sites. Licenses are good for four years and then are renewable. Sites will be taxes at 8.5 percent of Gross Gaming Revenue.

Player verification has been also clearly spelled out in this bill. In order to play online poker in California, you must submit the following:

First and Last Name
Social Security Number
Primary Residence Address
Telephone Number and Valid Email Address
Documentation with proof that a player is 21 or older

Finally, the bill is hoping to ensure that only regulated sites are visited by citizens. If passed, AB 167 would make it illegal for players to play at unlicensed sites. Doing so could result in felony prosecution of the player. This appears to be a new trend in online poker legalization as AB 167 is the third bill this year to include a section penalizing players or unlicensed operators.

Will the Bill Pass?

It is too early to know how far that this bill will advance in the legislature, but it will certainly be met with controversy from selected parties. Tribes are the most likely group to balk at this new bill as it eliminates the bad actor clause and would include racetracks. Both are parties that the Pechanga coalition is hoping to keep out the regulated marketplace.

The key to this bill’s passage will be how far that stakeholders are willing to negotiate. The bad actor clause has been a primary roadblock for years and it seems unlikely that it will just go away overnight. However, there may be room for negotiation and this bill could start serious talks from all parties.

According to Jones-Sawyer, “We have reached a new starting point. The dialogue over the past year has allowed us to reach even broader consensus and mutual agreement as to who will be able to participate in providing internet poker to our citizens. My goal of setting a standard in California that is the shining example for the entire nation remains unchanged.”

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