The California tribes blocking passage of the state’s latest online poker bill have proposed strict conditions for allowing PokerStars to get a license.
In a letter to Assemblyman Adam Gray obtained by Gambling Compliance scribe Chris Krafcik (@CKrafcik), the seven-tribe coalition led by the Pechanga and Agua Caliente bands reiterate their longstanding opposition to Gray’s AB 2863 legislation but offer specific remedies to alleviate their concerns.
The coalition has steadfastly objected to PokerStars participating in California’s online poker market due to the site having continued to serve US residents following the 2006 passage of the federal Unlawful Internet Gambling Enforcement Act (UIGEA).
The fact that Stars’ former owners sold their baby in 2014 to Canada’s Amaya Gaming doesn’t alleviate the coalition’s concerns over the use of Stars’ ‘tainted assets’ – software, databases, brand, etc. – because Stars used the post-UIGEA period to establish its brand’s preeminence among US poker players.
Gray recently amended AB 2863 to impose a five-year ban on operators who served US customers post-UIGEA, although this ban could be circumvented if an operator paid a $20m penalty. The Pechanga coalition has argued that this sum represents a trifle for a company the size of PokerStars, so the coalition has proposed upping the ante.
POKERSTARS’ LOST DECADE?
The coalition wants Gray to impose a mandatory 10-year ban – beginning the day California’s online poker market takes its first legal wager – on any online gambling service provider who took US wagers after Dec. 31, 2006.
The coalition says this represents a “significant concession” from its previous request for a permanent prohibition on so-called ‘bad actors.’ The coalition wants a similar 10-year ban on tainted assets, regardless of whether ownership of said assets has changed.
Even after that 10-year ban expires, the coalition wants bad actors to pay $60m into the state’s proposed Internet Gaming Enforcement Fund, which aims to police the newly regulated market by blocking access to unauthorized sites.
Finally, the coalition wants Gray to amend his bill’s non-severability provisions to prevent the possibility of future lawsuits overturning the coalition’s proposed suitability and eligibility amendments.
The coalition notes that its 10-year ban has some precedent, as Nevada imposed a five-year ban on bad actors when it became the first US state to launch a regulated online poker market in 2013.
The coalition has publicly rejected accusations that its continued opposition to online poker legislation means it is ‘obstructionist.’ The coalition’s letter to Gray claims that their amendments will allow him to achieve “all of the primary purposes of your measure” while ensuring that bad actors face “clear consequences” for their actions.
PROGNOSIS NEGATIVE
There was some scuttlebutt earlier this week that suggested an Assembly floor vote on AB 2863 was imminent but these rumors appear to have been false. The state legislature will adjourn at the end of this week and won’t be back in session until July 31.
When the legislature does return, it will have only one month in which to push AB 2863 over the hump. The legislation has been deemed an urgency statute, meaning it will require 2/3 approval by both of the state’s legislative chambers, and the state Senate has been ominously quiet this session regarding the online poker issue.
Obviously, it ain’t over till it’s over, but it appears that unless Gray bows to the coalition’s demands, AB 2863 is well and truly over.
