After some highs and lows in 2016, it turns out California will once again consider the issue of online poker regulation in 2017.
Earlier this week, Assemblyman Reggie Jones-Sawyer filed a new bill with the purpose of legalizing online poker.
AB 1677, or the Internet Poker Consumer Protection Act, is the latest attempt to make California the fourth state in the U.S. to regulate online poker sites.
Unfortunately, a close look at the bill leave many doubtful that this bill will get any traction whatsoever.
The Quick and Dirty
Online poker licenses will be granted only to California card rooms and Tribal casinos. Licenses will cost $12.5 million and be good for seven years. The licensing fee will towards future taxes.
California racetracks will not be allowed to apply for a license but they will receive a stipend of 95% of the first $60 million of revenues collected. Racetracks can partner with a service provider provided that half of the money collected from their partnership goes to track.
Tax rates based on gross gaming revenues are as follows:
- $150 million and under - 8.847%
- > $150 million - $250 million - 10%
- > $250 million to $350 million - 12.5%
- > $350 million - $15%
Then There's the Suitability Language - Or Rather a Lack Thereof
The one part of the bill that everyone was waiting to see was what type of suitability language, or bad actor clause, would be incorporated into this bill.
Instead, Jones-Sawyer has chosen to overlook this point and instead is planning on leaving the matter up to regulators.
Last year, a clause was floated that would have given PokerStars an option to buy out of a potential ban. However, at the last minute that was changed to a hard 5-year ban and PokerStars and their coalition immediately pulled their support from the bill.
With a lack of suitability language most are already betting against this bill in expectation of a lack of a consensus from California Tribes.
Was This a Legitimate Attempt or a Placeholder for 2018?
The question now becomes whether AB 1677 is a legitimate attempt to regulate online poker in 2017 or if it was merely filed to keep the conversation going for another year.
In its current form there doesn't appear to be a path forward unless something drastic happens such as PokerStars abandoning their bid for a license.
Even such a drastic measure may not be enough as long as there's a lack of significant suitability language. Until there are some changes in that aspect, don't expect any significant movement from this bill in 2017.