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Optimism Low for Regulated Online Poker in California

Posted on by John Lathram

California Poker BillRumored concessions regarding suitability standards may not be enough to push a bill to regulate online poker across the line by the legislative deadline.

Adam Gray´s “Internet Consumer Protection Act” – a bill to regulate online poker in California – failed to make it to the Assembly floor last week. With only two opportunities remaining for the passage of the bill from the Assembly to the Senate, there seems little chance for the bill´s success in the current legislative session.

Despite the low level of optimism, Adam Gray is continuing to hold talks with various stakeholders. It has been reported – although not confirmed – the latest discussions revolved around suitability standards and that a proposal is on the table to blanket ban all “bad actors” for a period of five years – including PokerStars.

How Close is the Legislative Deadline?

Although the Californian legislature does not go into its final recess for the year until 31st August, this coming Friday is the deadline for bills to be amended. The Assembly is scheduled to meet today (Monday) and Thursday – hence just the two opportunities remaining for a final version of the bill to pass the Assembly in order that it can be forwarded to the Senate.

Even if the bill does pass the Assembly, it still has to be heard by the Senate GO Committee before it gets a full hearing on the Senate floor. Just one Senate GO Committee meeting is scheduled before the end of the month – for August 23rd – although additional meetings could be organized if the bill is considered sufficiently important.

What Chance of the Bill Passing the Assembly?

Not great. When the bill was initially scheduled to be presented to the Assembly at the end of June, it was pulled at the last minute due to not having the twelve or so votes it needed to obtain a two-thirds majority. There are only 80 members of the Californian Assembly. So, requiring twelve or so votes implies that the bill only had the support of 42 members.

Since then, there have been some amendments to appease those opposed to the bill in its earlier format. The most notable of these were a provision for the state out of the funds earmarked for the horseracing industry and a concession that half of the $12.5 million license fee can be offset against taxes. However the bad actor issue has remained unresolved.

Could PokerStars be Banned for Five Years?

This is the scenario being suggested by Dave Palermo writing for OnlinePokerReport. Palermo understands that the coalition of tribes opposed to PokerStars is willing to soften its demands for a ten year blanket ban and a $60 million fine, but will not commit to a compromise until agreeable language is written into the bill.

Naturally the coalition supporting PokerStars has voiced its objection to the proposal. A spokesman for the San Manuel Mission Indians was quoted by Palermo as saying: San Manuel does not support any amendments to the bill that was passed by the Assembly Appropriations Committee earlier this summer.

It´s Not Just About PokerStars

The PokerStars issue is not the only obstacle that the “Internet Consumer Protection Act” has to overcome in the next week. Concerns about how little money will be raised for the state are likely to stall the bill´s progress, as are players´ concerns that – should the bill be passed – playing online poker in California on an unregulated site will become a felony, even though no regulated sites will be in existence for at least eighteen months.

There are also concerns that the “Internet Consumer Protection Act” fails to provide any consumer protection. In its current format, there is a stipulation in the bill – § 19990.506(j) – that players´ funds should be held separately from operating funds. However, nowhere is it mentioned how players could recover their bankrolls if an operator misappropriated those separated funds. Surely, that is something that needs to be resolved before any bill passes the legislature?

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