Assemblyman Adam Gray has indicated he will ignore objections to his bill for the regulation of online poker in California and steamroller it through.
Despite few people being happy with Adam Gray´s Internet Poker Consumer Act 2015 (AB 2863), the Californian Assemblyman has indicated he will ignore objections to his proposals and press ahead with the bill in its current form.
Gray was speaking with Matthew Kredell from Pokernews.com when he told the reporter he had no intention of changing the $60 million subsidy to the racetracks, was unconcerned about bad actor issues raised by stakeholders, and had every intention of retaining the felony clause for players who played on offshore poker sites.
Racetrack Subsidy Non-Negotiable
The $60 million subsidy to the racetracks has been interpreted by many as a bribe to the industry for stepping away from the online poker market. The racetracks have argued that, as they are the only entity currently allowed to provide any form of legal online gambling in California, they should be at the forefront of any online gambling regulation.
Some tribes are opposed to the inclusion of the racing industry in the online poker market, as they see it as an unconstitutional expansion of gambling. They are also opposed to the size of the subsidy, and say that it is not in the “real world” because it would leave no revenue for the state. However, Gray told Kredell
I haven´t put [the value of the subsidy] on the table as a point of negotiation.
However, not everybody in the horseracing industry is happy to accept the subsidy. Robyn Black – a lobbyist for the California Thoroughbred Breeders Association – said when the subsidy was first proposed that accepting it could set a precedent that might exclude the industry from other forms of regulated gambling in the future.
Stakeholder Consensus over Bad Actors Irrelevant
Gray also implied that a consensus between online poker stakeholders regarding bad actors and tainted assets was irrelevant. He said in the interview that his goal was to introduce legislation that would offer
a regulated, safe entertainment option for California. He told Kredell that he was going to craft his own legislation and hope that those who mattered would come along with it.
Gray insisted that the issue was not about reaching a consensus between California´s gaming stakeholders (the racing industry, card rooms, poker sites and tribes), but finding the right solution for California. The right solution for California, Gray stated, would be decided by the legislature. He made his feelings known about the ongoing infighting between stakeholders when he said:
There’s 120 people who vote in the California state legislature, and none of those stakeholders have a vote. It’s important to take testimony and input from people who do business in that area, but at the end of the day it’s really up to the 120 of us.
Playing Offshore is Going to Stay a Felony
Gray also addressed the concerns of players that, should his bill be passed, it would become a felony to play online poker at an offshore, unregulated poker site – eighteen months before the first hand of regulated online poker in California would be dealt. (You can read more about this issue – and what players think about it – in “California Online Poker Bill Terrible for Players”). He said:
The legislation takes the carrot and the stick approach. Clearly, if I’m saying we need regulation, then we need to crack down. Part of cracking down is saying this is a felony and we’re not going to allow that activity, which will hopefully drive them to a California site. I think both approaches are important.
Even pro-regulation advocates and potential online poker affiliates believe this is a bad idea. Having last week tweeted that “everything could be changed in the process”, Chris Grove was not so convinced about the flexibility of the Internet Poker Consumer Act 2015 when he tweeted yesterday:
Am disappointed to see @AdamGrayCA take what sounds like a hard line on making offshore play a felony. I follow logic but don’t agree.
— Chris Grove (@OPReport) March 11, 2016
A Step Forward that Nobody Wants (except PokerStars)
Prior to yesterday´s interview with Pokernews.com, many of those in favor of regulated online poker in California were saying how Adam Gray´s proposals were one step forward towards resolving the issues obstructing the passage of legislation. However, a quick snapshot of the current climate reveals that any steps forward are being taken on a rocky path.
- The horseracing industry is divided about whether the $60 million subsidy is a good idea
- Tribal communities think the subsidy is too high and have promised to oppose it
- The tribal stakeholders are still divided over the inclusion of bad actors and the racing industry
- Players are opposed to the “terrible” proposals that would make California a poker-free zone for eighteen months, that do not include interstate compacts, and that offer no player protection.
- Potential online poker affiliates will not be happy that, despite being bribed to step away from the market, racetracks will still be allowed to drive traffic to regulated sites – marginalizing the other affiliates potential income.
The only stakeholder who seems content with the proposals is PokerStars – who can comfortably afford to stump up a $15 million license fee and pay 15% tax on their gaming revenues (if these figures are confirmed). Provided that they are allowed into the Californian market, PokerStars will undoubtedly be the dominant force – although unlikely to be able to offer player rewards and tournaments as valuable as those offered by offshore sites.
Is Gray Going to Bend on Contentious Issues?
We should see soon exactly how inflexible the Internet Poker Consumer Act 2015 is going to be. The bill has to be heard by the Governmental Organization Committee before April 22, before heading off to the Appropriations Committee – whose deadline for passing it or scrapping it is May 27.
If Gray manages to steamroller AB 2863 through both committee stages (like he did with his “shell bill” in 2015), the next key dates are June 3 – the deadline by which time the bill has to pass the Assembly – and August 31, by which time the Senate will have to have passed the Act.
Most observers believe that there are too many contentious issues to be resolved within this timeframe for the bill to be successful. But, with Adam Gray already stoking up the boiler, who can be sure?