California iPoker: A Comprehensive Guide

The Background

Online poker has been a hotly contested legal question since the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006. While online gambling is not made expressly illegal by` any bill, the payout process is legally arduous as financial institutions cannot complete transactions with online casinos.

To date, only Nevada, New Jersey, and Delaware have managed to fully legalize and regulate online poker. However, a number of states are in full swing attempting to pass their own legalization bills. Notable among these states is California which has been trying and failing to pass legalization bills since 2008. Today, there are three different bills about online poker regulation floating around the California Assembly all of which have unique takes on how online poker should be regulated.

The Bills

AB 9: Internet Poker Consumer Protection Act 2015

• Includes a Bad Actor Clause preventing companies that hosted online poker after December 31, 2006 from getting a license to host games. Essentially just Amaya Gaming.
• Allows California to opt into intrastate and international player pools.
• Requires players to open an account and make their first deposit IN PERSON at a licensed gambling establishment.
• Rake collected per-hand.
• Internet cafes and sweepstakes cafes would be banned.
• All support employees and bank accounts must be within California.

AB167: California Online Poker Bill

• Only poker permitted. No slots or house games, and Pai Gow poker is specifically excluded
• No direct Bad Actor Clause. However, the language in the bill is vague enough that it is hard to predict what could be argued with it.
• All support employees must be in California.
• All sites go live the same day.
• Players must be verified as 21 or older.
• Accounts may be created in person, online, or by mail, with a social security number.

AB431: California Online Poker Bill

• Largely a shell of a bill. However, it passed committee on April 27, 2015 and clauses are being added to flesh out the bill into something useful and productive.

A coalitions has been formed in favor of bill AB431. The coalition consists of Amaya Inc, horse racing groups, labor groups, and the Morongo, Pala, Rincon, San Manuel, and United Aurburn Indians. Opposing them is the Pechanga Coalition, composed of nine tribes, but lead by the Pechanga Band of Luiseno Indians.

The Issues:

Two main issues stand in the way of these bills becoming California law. The first of these is the Bad Actor Clause. The Bad Actor Clause states that any group that continued to provide online gambling services after the legalization of the UIGEA would not be allowed to obtain a license to host online poker. The real problem with this is that it applies almost exclusively to the Amaya Inc. gaming company, notable owner of Poker Stars and Full Tilt. If a Bad Actor Clause is included in a passing bill, the company will be unable to obtain a license for whatever time period is therein determined. Of the states that have already legalized online poker, (New Jersey, Nevada, and Delaware) only Nevada has an active Bad Actor Clause. Theirs prohibits entrance of bad actor companies for 10 years from the bill's ratification.

The second issue facing these bills is the role of the horse racing industry in online poker. Initially, those opposed to the bills' ratification stated that they were wholly opposed to race tracks partaking in online poker. More recently however, two concessions have been made. The first is a revenue sharing deal with the racetracks, and the second provides that racetracks can become affiliates of groups hosting online poker. Both of these are a huge step forward in getting past the legislative block that is currently stalling the bills.

The Future of California iPoker

The coalition in favor of legalizing online poker has recently gained a number of footholds as it slowly pushes favorable bills forward. With the recent concessions of the Pechanga Coalition in regard to the horse racing groups, it seems that one of the two main issues will soon be agreed upon. The same cannot be said about the Bad Actor Clause. Regardless of the progress made, the window ratifying these bills this year is swiftly coming to a close as the state congress will adjourn for the year on September 11th. More importantly, fiscal bills, which online poker falls under, must pass committee by August 28th, so it is safe to say that AB9 and AB167 will not make it to the floor this year. Hopefully our luck will continue to improve in 2016.

Source: Via California Online Poker News