Reasons for Optimism Following Committee Vote AB 2863

662920_1280x720We won’t lie. Based on the charges levied against Amaya CEO David Baazov, we felt the chances of AB 2863 passing out of committee were about the same as Allen Kessler winning the 2016 WSOP Main Event.

Maybe this is your year Allen! On Wednesday, the Assembly GO Committee decided to vote unanimously on the bill and send it on to a potential floor vote in the Assembly.

While it may be a while before said vote comes, we are going to exhibit some cautious optimism on this bill based on the facts laid out below.

Tribes Did Not Say NO

While the support of the horse racing industry was one of the key things reported on by some outlets, the thing that stood out the most to us was that neither of the key opponents to this bill said an outright no.

Agua Caliente took an “opposed unless amended” stance on the bill. Sure, on the surface this looks like opposition but it leaves the door open for negotiation with the tribes and gives hope that a resolution to the bad actor issue is possible.

The Pechanga took no position on this bill. To us, this is the biggest reveal on the chances of the bad actor issue getting resolved. There’s language in the bill requiring that guidelines be established regarding bad actors prior to the issuing of licenses, a form of impartial language that Pechanga has been calling on since February.

As Pechanga goes, so will their coalition and the fact that they haven’t given a position means that they are willing to move on this matter. Assemblyman Adam Gray has stated that he is holding meetings every two weeks regarding the bad actor provision and Pechanga’s “non-action” could be evidence that they are serious about getting the matter resolved.

We will find out how serious they are in the next couple of months as certain deadlines start looming. Can Gray actually get a consensus? We will see.

Horse Racing Industry Strongly On Board

We believe part of the reason behind the unanimous support of AB 2863 was the fact that the horse racing industry is now on board, and are very vocal in their support of the bill.

One non-negotionable component of any iPoker bill was that the horse racing industry had to be taken care of. Governor Jerry Brown will veto any bill that fails to do so. We were one outlet that supported a payout to the horse racing industry and this bill would give them up to $60 million in annual subsidies in exchange for them not offering online poker.

This payoff has essentially eliminated one of two major roadblocks to iPoker regulation in the state for years. Unless lawmakers start backing off of the amount, which is unlikely if they want to retain the support from the horse racing industry, they can now fully devote time on getting a tribal consensus.

Already Much Farther Along Than Last Year

While an iPoker bill did make it through committee last year, it was nowhere near ready for a vote. AB 431 was just a shell bill and we never saw a serious attempt to complete the draft.

That’s not a problem in this bill. What’s left now is to address certain concerns and hammer out the bad actor provision and you have a bill ready for a vote. How quickly that happens will depend on how much the tribes and lawmakers are willing to give up.

PokerStars may be forced to concede some ground, especially after the recent charges against Baazov. If we were in charge of PokerStars, we would propose that we stay out of the industry for the first three to five years to give the industry time to build up on its own before we entered.

Lawmakers could even make this the standard for any former bad actor. If PokerStars made this type of concession, it may be enough to convince tribes to move forward, especially if PokerStars also agreed to forfeit their customer database from pre-Black Friday.

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