New online poker bill introduced in California
Assemblymember Mike Gatto introduces legislation that sets the licence fee at US$5m and tax rates at 5% of gross gaming revenue
The battle for regulated online poker in California is back on after a new bill was introduced to the legislature by Assembly member Mike Gatto, who said failure to get legislation across the line in 2015 would be a “lost opportunity”.
Under the bill, titled: Internet Poker Consumer Protection Act of 2015 – referred to as AB 9 – licenses would only be issued to entities currently eligible to offer land-based real-money gaming in the state, specifically the tribes and card rooms.
One-time licence fees would be set at US$5m with the upfront cost credited against future tax payments, which have been set at 5% of gross gaming revenue. Licensees will have to prove they can cover the fee “through its own net position or through credit directly to the applicant.”
Strict ‘bad actor’ provisions still remain, and would see any operator, service provider or individual who took online bets from US players post Unlawful Internet Gaming Enforcement Act (UIGEA) 2006 deemed unsuitable for licensure.
In a move seemingly aimed at keeping PokerStars out of the market, the bill states the California Gaming Commission will not award a license if an applicant has “purchased” or “acquired” the assets of any entity that continued to operate in the US post-UIGEA.
But a separate carve out allows the Commission to award a license to a ‘bad actor’ if it can demonstrate “clear and convincing evidence” it will not “adversely affect the integrity of, or undermine public confidence in” online poker or pose a threat to its effective regulation and control.
The new bill also requires players to register for online poker accounts in-person at land-based gaming venues or “satellite service centers”, which appear to qualify as card rooms or tribal casinos. Players are also required to make their first deposit and withdrawal in-person.
“California could receive significant revenue for merely regulating and legitimizing an industry that Californians already participate in but send their dollars overseas,” Gatto said in a statement.
“California has led the world in computer and internet innovation, and there is no good reason why we can’t continue to lead with a sensible online poker framework. AB 9 borrows from time-tested business practices that will improve our government finances and keep our money in our home state,” he added.
The new bill is certainly a step towards progress in 2015, but the battle is far from over. Last week San Manuel, who had previously lobbied in favour of ‘bad actor’ language to be included in legislation, announced it had inked a deal with PokerStars.
AB 9 also fails to address the role of the state’s racetracks who want to be able to offer their own poker sites, or at least receive a percentage of online poker revenues from the state in the way of compensation.