California Online Poker Update

California State SenateIt seems as though the next state to enter the online poker industry in the United States will be Pennsylvania or California. The state of Pennsylvania already held hearings and has seen a few pieces of legislation introduced, some even moving forward towards passage. While Pennsylvania has a slight leg up between the two states, California is now preparing to host poker committee hearings by the end of the month.

According to several reports, the state is looking to host online poker committees in the Senate and Assembly before May 1st. This is the deadline for policy committee to listen to fiscal bills. With this date looming near, the state should host hearings before the month ends. It doesn’t hurt either that two legislators with bills on the table, Assemblyman Adam Gray and Senator Isadore Hall are the chairs of the committees for Senate and Assembly Government Organization.

Arthur Terzakis, the Senate GO Committee Director, stated that nothing has yet to be finalized or approved but the chairs of each committee are considering the option of hosting hearings to learn more information on the subject to better understand the ins and outs of online gambling. According to Terzakis, it is too early to determine what the hearing would cover as well as who might be testifying during said hearing. In actually, the Director feels as though the first hearing may simply just be an overview of gambling within the state.

California’s problem with starting online poker legislation is the lack of consensus. It will be very difficult for the state to offer online poker gaming legislation by the end of the year as interested parties cannot seem to come to an agreement on how the activity should occur. The main issue is the language of the bills. Alongside Hall and Gray’s legislation, there are two other bills on the table.

Assemblyman Mike Gatto released AB9 which would allow tribal operators and card rooms to offer online gaming. Assemblyman Reginald Jones-Sawyer legislation, AB167 would allow this as well as racetracks within the state. This is the main argument as some want to see racetracks involved while others do not.

Gatto’s bill also includes bad actor language that would stop operators such as PokerStars from entering into the online poker market. Jones-Sawyer’s bill is much looser when it comes to which operators would be eligible for licensing, which should leave the market open for PokerStars.

The stakeholders in the state seem to be divided into two groups, the coalition of the Penchange tribe which does not want bad actors and racetracks and the Morongo tribe, which is open to all operators. The Penchange tribe may try their best to derail the online poker process as they are fully against racetracks being involved. The tribe has stated they might be open to a compromise involving PokerStars but do not seem to be budging on the subject of racetracks.

The Racetracks seem to be the main point that cannot move legislation forward. With online poker legalization, the tax policy would be affected in the state which means that 2/3rds of the vote must be in favor of the option for legislation to move forward. This means that some type of agreement needs to come to pass between the tribes, card rooms and racetracks.

From the racing industry side, they want to have the option to become involved if they so choose. The Governor of the state, Jerry Brown, has already stated he will not sign a bill into law that will exclude the racetracks. It seems as though every party needs to come together in some form or fashion so that online poker legislation can get moving in the state.