Following a meeting of key tribal gaming groups on Thursday in Sacramento, and the release of new draft legislation, prospects of a newly drafted iPoker bill showed signs of life this week.
An amendment to last year’s AB 431 online poker legislation was filed last month by its creator, California Assemblyman Adam Gray. In exchange for bypassing active participation in California’s proposed regulated online poker market, state racetracks would instead be the recipients of a yearly subsidy of up to $60 million.
Up until last month, AB 431 wasn’t much more than a shell bill offering little detail. Now however, the language of the bill includes a 15 percent tax for the online poker licenses to established state card rooms and tribal casinos, only. A deposit of $15 million would be required from licensees, with a deduction of future tax payments. Those obtaining a license would be able to operate no more than two online poker sites. Other specifics of Gray’s plan include California race tracks receiving the first $60 million of yearly revenue from online poker, with 95 percent going towards pari-mutuel employee retirement and racing purses, while state agricultural fairs would receive the remaining 5 percent.
Deemed an urgency statute, a two-thirds favorable vote in both the upper and lower house will be required for the bill to proceed. If successful, the state has 270 days from passage to pen the necessary regulations.
The state’s tribal gaming industry has fiercely opposed the addition of online poker to tracks’ existing advance deposit wagering sites. The industry feels the addition would be a violation of exclusivity provisions of tribal-state gaming compacts. The meeting of tribal leaders convened on Thursday by Gray, was an attempt to garner support for his plan, and end the eight-year stalemate between the tribes and racetracks. However, concern was expressed by California Nations Indian Gaming Association (CNIGA) chairman Steve Stallings regarding the financial provisions of Gray’s bill. And while a representative of the tribes that have partnered with Amaya Gaming’s PokerStars brand said AB 431 would not be opposed, Stallings believes “the total economics of the bill don’t work,” according to CalvinAyre. He believes that the expenses associated with the launch of the state’s poker market will mean the sites won’t see a profit for the first four years. A sentiment echoed by the tribal coalition, led by the Pechanga Band of Luiseño Indians and the Agua Caliente Band of Cahuilla Indians, that historically has provided the biggest roadblock to the progress of online poker legislation.
Efforts to legalize online poker in California began nearly a decade ago, but due to the inability of tribes to come to an agreement on bill language, in particular “bad actor” provisions and including race tracks in licensing eligibility, in recent years those efforts have been stymied. And beyond the tribe’s agreeing that race tracks should not be included in the legislation, apparently little progress was made at Thursday’s meeting.