UPDATED TO INCLUDE BILL DETAILS
As promised, California’s latest attempt to legalize, regulate and (more importantly) tax online poker made its appearance on Friday (read it here). Senate president pro tempore Darrel Steinberg and longtime online gambling proponent Sen. Rod Wright waited until the absolute final day on which new legislation could be proposed this year to drop SB 1463 into the legislative queue. (Late Friday afternoons are typically when politicians choose to drop news or legislation they’d prefer undergo as little media scrutiny as possible.) The Los Angeles Times quoted Steinberg spokesman Mark Hedlund parroting the usual malarkey about wanting to protect consumers from unscrupulous international operators when we all know it’s really about Cali wanting to print some of that sweet, sweet online poker money.
A few highlights:
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California plans poker-only for the first two years following the initial issue date of any license. Other games “allowed under the California Constitution and the Penal Code” may be phased in after the two years. But the legislature would have 90 days to reject any new game approved by the state DoJ.
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There’s no limit on the number of licenses.
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Eligible licensees include licensed card-rooms, federally-recognized California tribes holding a tribal-state gaming compact, plus horse racing bodies and ADW site operators licensed by the California Horse Racing Board.
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Applicants could not have accepted any wager from persons in the United States on any form of Internet gaming that has not been affirmatively authorized by law in the state or the United States after December 31, 2006, or has been the holder of a direct or indirect financial interest in a person or entity that has accepted such a wager.
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A licensee and all of its subcontractors would have to be organized in California. The licensee, its facilities, its bank accounts related to its intrastate online gambling operations, and its registered players’ bank accounts shall be located entirely within the state.
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License applicants will submit a fee of no less than $1m and no more than $5m, depending how much investigative work regulators feel is warranted to determine an applicant’s suitability. Any money left over once the background check is complete will be refunded to approved applicants. Conversely, if more checking is required, the applicant will be required to provide the necessary sum.
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All initial licenses to take effect on the same date “not later than Jan. 1, 2014”.
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There will be a mandatory license review in year three of the initial 10-year license.
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A licensee may enter into contractual agreements with one or more licensees for the purpose of ensuring adequate player liquidity, subject to the approval of the department.
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The state reserves the right to opt out of, or opt into, any federal framework for Internet gambling, or to enter into any agreement with other states to provide Internet gambling. However, unlike some other states’ online poker bills, there is no explicit provision to enter into such agreements with other countries.
MONEY STUFF
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It is the intent of the Legislature in enacting this act to ensure that the state realizes a minimum of $200m of General Fund revenue from licensing fees during the 2012-13 fiscal year.
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Any entity licensed to operate an intrastate Internet gambling Web site shall remit to the Treasurer a nonrefundable license fee in the amount of $30m. This amount shall be credited against fees imposed pursuant to subdivision (b) on the licensee’s gross gaming revenue proceeds for the first three years of operation. Upon depletion of the license fee, the department shall notify the licensee to commence monthly payments to the state equal to 10 percent of its gross revenues.
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Each licensee shall pay a regulatory fee, to be deposited in the Internet Gambling Fund in an amount to be determined by the department for the actual costs of license oversight, consumer protection, state regulation, problem gambling programs, and other purposes related to this chapter.
IOWA-TCHU TALKING ‘BOUT, WILLIS?
In his latest “Ask the Gov” YouTube video, Iowa Gov. Terry Brandstad said he was “very skeptical” about the future prospects of the SB 3164 online poker bill that cleared the Senate State Government Committee this week. Brandstad claims (and polls back him up) that most Iowans aren’t in favor of seeing any expansion of gambling in their state, leading Brandstad to dub the bill’s chances of passage once it hits the legislature as “very doubtful.”
The good guv’s opinion must surely depress the hell out of Richard ‘Skip’ Bronson, CEO of US Digital Gaming (USDG). Bronson is a staunch proponent of intrastate online gambling, even though his “end-to-end business solution for legalized online gambling” outfit has been around since 2009 without having signed a single deal to provide any state with anything. However, in Iowa’s previous flirtations with online poker legislation, USDG appeared to have the inside track at finally getting the nod. Now Iowa seems to be taking itself out of consideration before it even gets started. But Bronson’s been here before. As he told The Independent’s Stephen Foley: “I was sitting with a governor the other day and he said, ‘I want to do it, I’m ready to do it, but can you please get someone else to go first?'” Home of the brave, huh?
