On Wednesday the California Assembly Appropriations Committee held a hearing on AB 2863 in what many thought would result in a vote to move the online poker bill to an Assembly floor vote.
However, the committee failed to vote on the measure and rather proposed several amendments that impact suitability and fiscal concerns.
Fiscal Amendments Would Assure that the States Gets Some Revenue
A pair of amendments recommended by the Appropriations Committee addresses both the stipend to be paid to the horse racing industry and the up-front license deposit.
As the bill is presently written the first $60 million in tax revenue will go to the horse racing industry. The committee wrote that the current tax structure would not guarantee any income to the state.
Rather, they propose that 10% of all annual tax revenue be put into the General Fund and the remaining 90% distributed to the horse racing industry until the $60 million stipend is met. Afterward, all of the additional tax revenue would go to the General fund.
Next, the committee addressed the up-front license fee. As presently drafted the $12.5 million fee would go to the general fund and the fee would not be counted as a prepayment for future taxes.
The committee said that some opponents called this prohibitive and recommended that half of the fee be offset by reduced taxes on gaming revenues.
Committee Recommends Bad Actor Restrictions With Payout Clause
The committee also addressed the suitability language in the bill and recommended two changes.
Their first amendment they called for is a limitation on the accrued assets of bad actors.
They recommend that California Gambling Control Commission "impose limitations and conditions on how assets, such as customer lists, databases, or any other assets deemed to provide the applicant an unfair competitive advantage, are utilized."
Specific restrictions would be determined by the CGCC.
Next, the committee recommends that anyone that took online bets from January 1, 2006 through December 31, 2011 not be allowed a license in California until January 1, 2021.
However, the committee also recommended that bad actors could pay a one-time fee of $20 million (in addition to the license fee) to be allowed to participate in California online poker before 2021.
Pechanga Coalition Still Opposed, But Will They Be Able to Block
Not surprisingly, the Pechanga coalition led by the Pechanga Band of Luiseño Indians and the Agua Calienta Band of Cahuilla Indians are still opposed to the bill as its presently drafted.
They issued a letter of opposition to AB 2863 sponsor Adam Gray and the Appropriations Committee on Monday. Their opposition is seen as one of the driving forces behind the amendments and the delay in the committee voting.
The Pechanga Coalition has long been the driving force blocking online poker regulation in California but some believe that the tides are turning in the favor of iPoker supporters.
Last week, the group known as the PokerStars Coalition voiced their overwhelming support for AB 2863. That coalition consists of 21 tribes, card rooms, the horse racing industry and PokerStars.
The Morongo and San Manuel Mission Indians are the tribes headlining this coalition along with the Bicycle Casino, Commerce Casino and Gardens Casino (formerly Hawaiian Gardens). The Rincon, United Auburn and Pala tribes are also part of this group.
With the ever-increasing size of this pro-iPoker coalition, some are beginning to believe that they are assembling enough political clout to counteract the Pechanga.
Whether this is true remains to be seen but we will begin to get an idea of where things will go in the next week or two.
The next hearing on AB 2863 is scheduled for June 29 but this could be bumped up to next Wednesday if lawmakers get a new draft together quickly.