The State of Play – Update On Online Gambling Legislation In California

California has famously been attempting to pass an online poker bill for close to a decade now. However, progress has been slow, and success in 2017 is far from in the bag. However, after nine years of debate, an online poker bill has finally made it further than its predecessors to the full Assembly in California.

Up until now the only states in America to have legalised online gambling, in some form or other. New Jersey, Nevada, and Delaware to name a few. More and more states have been showing interest in the issue of online gambling and poker in recent years. 2017 looks like it might be the year that big change will occur in the US online gambling landscape, if not in California.

The two states that appear to be closest to achieving the goal of legalising online gambling anytime soon is Pennsylvania and New York.

The background to the debate in California

The failure to get a bill through in the past has come from problems in keeping all the many stakeholders happy. These competing factions include licensed card rooms, tribal casinos, and a union-backed racing industry. To which have taken hard-line positions in the past. Thereby ensuring the status quo and dooming previous legislation attempts to failure.

A major long-running, and as yet unresolved, the sticking point has been the ‘bad actor’ clause. Which calls for the exclusion from the market, or at least the heavy sanctioning of, PokerStars and other operators who were involved in dealing real money hands. Especially after the passing of the 2006 Unlawful Internet Gambling Enforcement Act.
The key features of the latest proposal in California

Building on last year’s most promising, though ultimately failed, attempt to get to get a bill across the finishing line, the legislative effort in 2017 has come from California Assembly member, Reginald Jones-Sawyer. The Internet Poker Consumer Protection Act (AB 1677) seeks to legalise and regulate poker in California. Allowing approved tribes and card rooms to offer online poker to over 21s residing in the state.

The primary regulations called for by the bill include:
• Underage gambling and problem gambling
• Resolution of player disputes and complaints
• Gaming system technical standards and practices
• Hardware and software standards and compliance
• License and work permit issuance and processes
• Suitability standards and determinations
• Temporary, provisional, and emergency approvals
• Effect of receiverships, bankruptcy, insolvency, inheritance, and trusts affecting ownership of a licensee
• Appeals from adverse decisions

It is worth noting that the bill does not include language that would necessarily exclude PokerStars from applying for a licence. As a result, it would leave that decision to regulators.

CA online gambling bill remains in state of legislative inertia

The passage of the latest bill through the Appropriations Committee in February confirms that there still exists a considerable divide among industry stakeholders on suitability standards. A compromise will have to found to appease the various parties if the legislation is to make it through the Assembly. This prospect seems faint as, despite the fact that there was only one vote against the recommendation of the legislation. Some committee members commented that they are not yet ready to approve the bill in in the full Assembly.

The stalemate could perhaps be broken if PokerStars would decide to give up on California. It is a rumour that they are to be considering. It may also be the case that the legislative appetite for gaming policy is just not there at a time when the new Trump administration is cutting funding. As rather more pressing issues such as immigration are taking priority.