California i-poker: Where the bills have come together

ther step towards the attempted regulation of real-money online poker in California was taken last week with the introduction of AB 2863 by assembly members Adam Gray and Reginald Jones-Sawyer.

The bill bears some similarities to the previous bills submitted by Gray (AB 431) and Jones-Sawyer (AB 167). AB 431 passed an Assembly Appropriations Committee vote in May and was recently amended. AB 167 has been removed from the agendas of separate Governmental Organization Committee hearings in July and January respectively.

Here is where AB 2863 is in line with the previous bills:

• The racing industry – AB 2863 would ensure that 95% of the first $60m to be generated from real-money online poker would be deposited to the California Horse Racing Internet Poker Account, with the other 5% going to the State Treasury. This follows a near-identical amendment made to AB 431, though that bill would see the remaining 5% split between retirement plans for jockeys and pension plans for pari-mutuel employees.

• Tax and fees - Early versions of the draft of AB 2863 reportedly showed that real-money online poker operators would be taxed at a rate of 15% of gross gaming revenue, and would pay a licence fee of $15m, just as they would with AB 431. An annual regulatory fee would be dedicated to an internet poker fund, as was outlined by AB 167.

• Tribes – AB 2863 would establish a tribal gaming regulatory authority, much like what AB 167 and AB 431 proposed. Another similarity is that the two bills mentioned that a tribe wishing to gain a licence would have to include a limited waiver of their sovereignty within its application. AB 2863 specified that a card room can go into partnership with a tribe in order to be licensed.

• Implementation – AB 2863 would be required to have its provisions adopted and implemented within 270 days after the operative date of the bill. This echoes the other two bills.

• Bad actors – There is no clear “bad actor” clause in AB 2863, based on the fact that it does not ban those who continued operating in the US post-UIGEA. This would appear to be in line with the other two bills.

• Player eligibility – The legal age for participating in real-money online poker would be 21 in both AB 2863 and AB 167.

AB 2863 requires the approval of two thirds of the Assembly to pass to the Senate.