California Online Poker Legislation Falters In 2015

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Friday, October 2nd, 2015 | Written by Shane Larson

Fifty-fifty odds are always a gamble that you don’t want to bet big on, but those are the exact odds that California Assemblyman Mike Gatto gave when discussing whether or not the Golden State would legalize online poker this year. In early 2015, the lawmaker had said there was a 50 percent chance that the legislative year would close with a deal having made it through the California Assembly and Senate. On September 11, however, the legislative year came to a close without a bill ever getting near passing, and industry experts doubt the odds are favorable for a bill to succeed even next year. Commenting on the issue, an anonymous legislative source said:

“I do not see any momentum. There is no agreement among tribes. There is no groundswell of support from the people that are out there playing. There is nobody banging on the door to the state Legislature saying: we want you to regulate online poker. We have got water issues. We have got fires burning throughout California. This does not register as being critical on the governor’s agenda.”

The Year in Review

Even though online poker did not become legal in California this year, it wasn’t for a lack of trying. Mike Gatto introduced a bill (AB 9) in the Assembly and Isadore Hall proposed legislation (SB 278) in the State Senate; however, both bills never made it far. There was a glimmer of hope in the summer when a bill (AB 431) penned by Assemblyman Adam Gray managed to make it out of the Governmental Organization Committee. Unfortunately, the bill was just a shell and did not have any specifics in place. Gray had hoped to conduct hearings and then come up with the meat of the bill, but controversy over how to proceed stymied his efforts.

What’s the Hold Up?

There are two sticking points that are going to continue to prevent the passage of an online poker bill in California:

1. A Desire to Keep Horse Racing Out. The biggest point of contention is over whether or not horse racing businesses should be allowed to own and operate online poker sites. Currently, a coalition of 10 Indian tribes is lobbying to keep horse racing businesses out. Three tribes from an original coalition of 13 were convinced to shift positions earlier in the year, but the remaining tribes that operate casinos and card rooms in the state are so far reluctant to do the same.

2. The Bad Actor Clause. Another problem is the proposed “bad actor clause.” Simply put, this part of the proposed laws would prevent poker sites that continued to operate in the U.S. once online poker was made illegal from being legal operators in California. This would shut PokerStars out of the California market. The company has been on a mission to improve their image by lobbying California lawmakers and taking their case to the public.

The Future of Online Poker in California

Assemblyman Adam Gray’s office has assured the public that he will revisit his legislation in early 2016 when the State Assembly reconvenes. Still, Assemblyman Mike Gatto has stated that he thinks there is a 35 percent chance that online poker could be legalized by the end of the year. Until some headway can be made to resolve the disagreements over who should be allowed to operate online poker sites, Californians will have to continue to live without the ability to play poker legally online.

Sports Betting Bill Introduced

As the 2015 legislative session closes without any movement on the online poker front, more frustrations lie ahead for Californian gamblers after Assemblyman Gray introduced a bill (AB 1441) to legalize online sports betting in the Golden State. The California Interactive Sports Wagering Consumer Protection Act, as it’s known, was introduced just before the close of the present legislative year, and seeks to permit licensed operators to legally offer online sports betting “only using telephone, computer, or another method of electronic wagering communication”.

Nevertheless, AB 1441 clearly states that progress of the bill relies solely on the federal government amending or lifting the sports betting prohibition enforced by the federal ‘Professional and Amateur Sports Protection Act’ (PASPA). According to PASPA, just the states of Oregon, Delaware, Montana and Nevada are allowed to offer online sports betting, and in 1992 a one-year window of opportunity was opened for New Jersey to also adopt sports betting. The state failed to take advantage of the carve-out, however, and recent attempts to pass sports betting legislation by New jersey have been rejected by the United States Court of Appeals for the Third Circuit.