Examining the Three Key Problems With AB 9

On December 1, the latest piece of online poker legislation was released. Assembly Bill 9 (AB 9) is the latest attempt to legalize the game and out the gate, it has several problems. Some have been issues that have rolled over from past versions and one has crept up thanks to the sponsor’s overzealous attempts to protect citizens. Below are the three key problems with AB 9.

Bad Actor Clause Remains

PokerStars BannedAs expected, the bad actor clause is part of AB 9. This time around, there is language that specifically is aimed at companies like Amaya that purchased assets from UIGEA violators. In reality, we all know that Amaya is really the only company that lawmakers are worried about because they represent the biggest threat to other stakeholders.

Amaya purchased PokerStars earlier this year. Most felt that this was the only way PokerStars will get into the United States. The strategy will eventually succeed in New Jersey but lawmakers have been looking for a way to shut the door on Amaya. Technically, they have done so.

However, there is a bit of a loophole that could still let PokerStars in. The language is setup to permit a purchaser of UIGEA violator assets into the state if they can prove that the purchase of those assets will not hurt the integrity of California online poker.

What does this mean? Right now, it means whatever lawmakers want it to mean. This gives them a very broad brush to paint the rules on how to let Amaya into the state. If the law isn’t changed, this would give them enough room to negotiate with all parties and then come up with “proof” that Amaya is in good standing with the state.

Horse Racing Not Included

The current version of AB 9 once again only includes licensed card rooms and Indian tribal casinos as potential license holders in California. Horse racing tracks are yet again shut out in what is sure to become a developing roadblock to legalization. Last year, the horse racing industry in California started firing warning shots that they would not allow a bill to pass that did not include them.

This issue is one that has been lightly covered by most media organizations because of the extensive weight given the bad actor clause. However, horseracing tracks are a viable stakeholder in the state and it seems counterproductive to exclude them. The only logical reason that they aren’t in a bill is because lawmakers are worried about resolving the PokerStars issue and then will move on to horse racing tracks.

One would assume that if PokerStars were somehow allowed into California, allowing horseracing tracks would be less of an issue. In fact, they may become a welcome ally to those hoping to reduce the overall share that PokerStars takes in the state.

Players Must Setup and Deposit Live

The section of the bill that is getting the lion’s share of the publicity has been the added clauses that require players to register for an online poker account live at the licensee or a satellite location setup by the licensee.

If this law is passed, that means that players must go to their card room and register for an online poker account. Also, their first deposit must be made in person. There is also language that will require certain deposits be claimed in person. The amount of these deposits has not been set.

Assemblyman Mike Gatto, the bill’s sponsor, claims that this clause will help to prevent underaged gambling and use by criminals. Unfortunately, he is overlooking the potential unnecessary burden he will place on residents. Casual players are going to be less likely to signup for accounts and depending on which card rooms become licensed, it may be too far out of the way for some players to fool with setting up an account.

Assemblyman Gatto is overlooking the fact that online poker in New Jersey, Nevada and Delaware have dealt with these issues already and done so successfully. The technology exists to help protect players and must be utilized, or it will cut drastically into the potential player pools in the state.

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