California’s Efforts To Legalize Online Poker Ends Till 2017

CaliforniaThe closure of this year’s legislative session in the state of California has meant a final decision on the online poker bill will remain pending till 2017 and online poker will continue to be illegal this year.

California has campaigned hard for the legalization of online poker for a number of years and it appeared that the bill would get approved finally in 2016, but it wasn’t to be.

Sponsored by Assemblyman Adam Gray, the bill had been the closest that any poker bill has reached to being presented for an Assembly vote, raising hopes that it would be cleared this year.

Industry experts were hopeful since a lot of ground was gained this year including an agreement with the horse racing industry. However fierce disagreements over the suitability clause brought it to a standstill.

The suitability clause seeks to address gaming operators who continued to offer their services to Americans after the Unlawful Internet Gambling Enforcement Act was implemented in 2006. A powerful tribal coalition led by Pechanga and Agua Caliente raised objections especially against PokerStars and did not want them to enter the Californian market since they believe that the PokerStars gained an unfair advantage by operating in California illegally and building a considerable player database during this period of time.

Gray attempted to introduce a compromise between the two factions by proposing a soft 5-year ban that could be waived with a $20 million fine. But when the tribe objected to it, he introduced a mandatory five year ban which was strongly opposed by PokerStars and its in-state partners. The PokerStars coalition pointed out that the terms of the ban could permit a lifetime ban on PokerStars as the bill did not include an end date for the lifting of the ban on the use of assets that were operational after Dec 31 2006, providing only an end date for covered persons.

Lawyer Keith Sharp, who represents PokerStars’ in-state partner cardrooms said that that the omission was an intentional attempt to ban PokerStars for life. The pitched battle over the bad actor clause has left the passage of the bill an open question.

In a statement, John Pappas, director of the Poker Players Alliance an advocacy group for online poker said

I think it leaves a much larger philosophical question about what is doable in California. The most recent episode showed that putting in a bad-actor provision doesn't help advance the bill, so the question everyone should be focused on is what would help advance the bill. It's a very open question that I don't think will be answered anytime soon