California Online Poker Bill Passes Vote, Faces ‘Bad Actor’ Hurdle

Almost nine years after it was first considered, the California online bill was finally approved unanimously by the state Assembly Governmental Organization Committee on Wednesday, however, the contentious issue of the ‘bad actor’ clause remains to be settled.

Assemblyman Adam Gray’s AB 2863 bill was passed by a vote of 18-0, after two hours of bickering and some politicians maintained that they would negate the bill at a later stage if the ‘bad actor’ clause was not resolved.

The bill was pushed with several debates by Gray and John Pappas, spokesperson, Poker Players Alliance, both who pointed out how it would benefit consumers and state revenues, which were being exploited by international online operators, in an unregulated market. Gray claimed that more than one million Californian players were using offshore sites. Pappas spoke of Lock Poker, a site that had shut down and said, “Lock Poker last April shut down and took millions in player deposits,“

He pointed out, “And because there is no regulatory oversight, there is nothing players can do to get their money back.”

Most of the stakeholders supported the bill, with each continuing to maintain conditions for their cooperation. Most of these focus on tax rates, revenue generation and the inclusion of PokerStars.

Horseracing Industry

This February, when the bill was re-introduced it contained a $60 million sop for the horseracing industry, provided they refrained from poker offerings. Most of the industry operators have now proclaimed support for the bill, with the lone Stronach Group, which has contended that Gray’s $60m offer was “not protected in the long term.” The group also demanded that they be allowed to offer poker products.

Indian Tribes

The tribes also expressed support for the newly amended bill, except for the Pechanga tribe, which continues to vociferously demand language that clearly expresses the ‘bad actor’ clause.

Keeping PokerStars out is the real objective of the opposing tribes and Mark Macarro, Chairman, Pechanga stressed how the site was operating after the Black Friday debacle. Macarro brought notice to the recent imbroglio involving David Baazov, CEO, PokerStars and the ‘insider trading’ charges levied against him by the Quebec financial securities authorities.

While most players have finally agreed to come to the table for negotiations, two voices continued to stringently oppose the online bill. These included Rev. James Butler and land-based casino mogul Sheldon Adelson, who prophesized that the ‘internet is a strange and dark place’.

Gray has promised the Assembly that he would hold meetings every two weeks with all stakeholders in order to solve all the issues and reach a consensus. “We’re having meetings every two weeks with a variety of tribal governments with all different perspectives to try to arrive on what that language will look like and to build the consensus necessary to move this forward,” Gray said. “I’ve made a verbal commitment and an in-writing commitment right here in the bill that we will in fact put in suitability language, which is the last remaining issue.”

The statement was met by mirth and fellow assembly persons all responded by linking arms and singing “High Hopes” in a chorus.