Cali Senators ready compromise bill
Lawmakers ready amendments as tribal groups argue for licence fee reduction and exclusion of racetracks
California Senators Rod Wright (pictured) and Darryll Steinberg will amend and re-introduce a compromise bill later this month in a bid to appease a number of powerful tribal casinos and card rooms, eGaming Review has learned.
A number of large tribal casinos and card rooms, as well as other interested parties, have voiced their concerns over Senate Bill 1463, including the type of organisation that would be allowed to obtain a licence, and the cost of the licence fee itself. As a result several Californian policy makers are known to be preparing a series of responses to these objections with amendments and a compromise bill set to be announced later this month.
The bill was introduced in February this year, stating that “eligible entities” would be entitled to apply for 10-year licences to offer online gambling, although this would be poker-only for the first two years.
A source close to the legislation told eGR that the bill authors will meet in the next two weeks to discuss potential amendments, and that while it is a “give and take process”, Senator Wright’s primary concern is “what benefits the State of California”.
“Some of the folks are pitching amendments that only benefit them “ whether it’s to lower the licence fee or to extend the timeframe for the credit with respect of the fee,” the source said.
The legislative session in California ends on 31 August and if the bill has not been finalised and passed by that date it will have to begin the process again next year. Final amendments to the bill are likely to be announced towards the end of April, along with several non-contentious clarifications. “Some of these are easy fixes,” the source explained. “The main issues are where the bill’s authors are going to have to decide how far they are willing to go in terms of compromise.”
Several tribal casinos have claimed licence eligibility should be strictly limited to tribes and licenced card clubs. As it stands the bill also allows for racetracks and advance-deposit wagering providers, which some tribes claim do not have a place in the online poker market.
It is thought this is an issue that Senator Wright is unlikely to budge on, and is he likely to argue that racetracks are currently the only entities experienced in taking online bets and that they need the funds to compete with “racinos” “ tracks in states that offer regulated gambling.
According to the source, one undisclosed interested party has requested an amendment to extend the existing three-year period in which the US$30m licence fee is paid to the state claiming this is too much of a financial burden, and asking for these payments to be spread over the length of the proposed 10 year licence.
“I can’t imagine [Senator Wright] would go for that, but he [Wright] may counter with some kind of proposal,” the source said. “He may feel that a five-year timeframe is more reasonable to allow the licensee sufficient time [to pay the fee]. This is a costly endeavour the operators are getting into and, if they are successful, then the state is going to be successful.”
Other interested parties are reportedly concerned about a provision in the bill which calls for a review of the terms of the licence after three years, arguing there should be no set review whatsoever. “Their feeling is that, as an operator, if things aren’t going as well as expected, and the state’s 10% gross revenue tax is proving too high “ they will just go back to the legislature and ask for it to be lowered,” the source added.
Past efforts to legalise online gambling in California have failed, however SB 1463 is seen to have the right amount of political backing to prevail, while at the same time the state urgently needs to find additional revenue to plug its $9.2bn budgetary deficit.