Comparing California’s Online Poker Bills AB 9 and AB 167

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California has been trying to expand into online poker since 2009, and this year the California Assembly has two online poker bills to choose from, with the potential for even more to be introduced in the future. Both bills, AB 9 and AB 167, seek to accomplish the same thing, legalizing online poker in California, but there are several clear demarcation points between the two bills. If the California legislature is serious about passing an online poker bill in 2015 they will first have to choose from these two bills, from there they will have to agree to amendments and compromises, and from there they would have to do something they haven’t managed to do up to this point, take a vote on the measure. The basics of AB 9 and AB 167 The first bill, AB 9, was introduced by Mike Gatto back in December, before the legislature even convened for the 2015/2016 legislative session. While Gatto claims the bill was not influenced by any particular interests, it did seem to closely resemble previous efforts backed by the Pechanga coalition, as the bill met with harsh criticism from two groups: Racetracks, and the PokerStars backed coalition that includes the Morongo and San Manuel tribes, and the Bicycle, Commerce, and Hawaiian Gardens casinos. The second bill, AB 167, introduced by Reggie Jones-Sawyer, also received its fair share of criticism, but this time the complaints came from the other side, as the Pechanga led coalition of tribes voiced their opposition to the bills soft stance on “Bad Actors” and inclusion of racetracks. Jones-Sawyer 2015 differed dramatically from Jones-Sawyer 2014 on these two issues, but representing the Los Angeles area it’s not too hard to figure out why Jones-Sawyer would fall on the side of Commerce, the Bike, and the rest of the PokerStars coalition. The bills are similar but different While they aim to do the same thing – both bills possess similar restrictions as to who can play (age and location) and put safeguards in place to protect consumers and insure the integrity of the industry – the two bills are also quite different. The key differences between the two bills has to do with the two biggest issues in the state: Bad Actor clauses and inclusion/exclusion of racetracks. If you’re interested in reading up on these two issues I suggest this column. However, there are several other important differences, as well as an interesting point of compromise. The point of compromise seems to have come about by sheer chance, as AB 9 began with the strange requirement that players must register their accounts in-person at select locations. This provision was something widely scoffed at, and after listening to the online poker industry Mike Gatto amended AB 9, removing the provision, and making in-person registration “optional” instead of mandatory. While required in-person registration (at the home casino/card room, as well as approved satellite locations) is a terrible idea, optional in-person registration is a pretty good idea. It was such a good idea that Jones-Sawyer added it to AB 167, and I’d be surprised if this wasn’t included in all subsequent bills. When it comes to licensing the bills begin to diverge. Both bills lay out a basic framework that would see intrastate online poker adopted by California, with approved entities capable of applying for costly online poker licenses and with a percentage of revenue going to the state. AB 9 calls for a one-time fee of $5 million and a licensing term of 10 years with unspecified taxes paid to the state. On the other hand, AB 167 calls for a $10 million licensing fee for a four year license, and 8.5% of Gross Gaming Revenue set aside for the state. AB 167 is the more inclusive bill (allowing racetracks and any licensed gaming establishment to apply for a license) but the $10 million threshold ($2.5 million per year) might make this a moot point, as the price of entry is simply too high for many potential operators. AB 9’s $4 million licensing fee is far more affordable ($400,000 per year) but the bill is far more restrictive in who can apply for a license, as it restricts licenses to licensed gaming establishments that have been in operation for at least three years. One other notable difference is AB 9 expressly limits online poker to intrastate only, whereas AB 167 leaves the door open for interstate poker down the road. AB 167 is the better starting point In the eyes of most analysts, neither of these bills have any chance to pass as is. Mike Gatto himself has stated, his bill is more of a conversation starter than a finished product. Still, Gatto’s bill, AB 9, may be too cute for its own good, while Jones-Sawyer’s AB 167 seems like more of a finished product, but at the same time still capable of being amended. Previous Post Next Post bike|California|commerce|hawaiian gardens|morongo|online poker regulation|pechanga|pokerstars|san manuel About Steve Ruddock Steve Ruddock is a longtime member of the online gambling industry. He covers the regulated US online casino and poker industries for variety of publications, including OnlinePokerReport.com, PlayNJ.com, USPoker.com, and USA Today.

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