AB 167 – California Online Poker Bill

By John Mehaffey

California Assemblyman Reggie Jones-Sawyer has introduced AB 167, a new California online poker bill.  The bill is titled the Internet Poker Consumer Protection Act of 2015.

AB 167 Highlights

  • 4-yr licenses with 4-yr renewals
  • $10,000,000 one-time licensing fee.
  • Taxes taken from licensing fee at 8.5% of gross proceeds
  • Poker only
  • Players must be 21 years of age or older
  • Internet cafes illegal
  • 270 days for gaming commission to set regulations
  • Creates Internet Poker Fund and Unlawful Gambling Enforcement Fund

Who Could Offer California Online Poker?

AB 167 would allow licensed card clubs, Indian tribes, and racetracks to offer online poker sites.  These entities would be able to create joint partnerships, provided all involved qualify for a license.  A qualifying licensee must have at least five years of gaming experience while in good standing in California.

Tribes that accept wagers from outside of their reservation in violation of this law would be automatically excluded.  This may be aimed at tribes that have come under fire for spreading online bingo and other games.

Poker-Only

Poker would be the only game permitted.  Symbols or devices that mimic slots or other house games would be prohibited. Pai Gow Poker is specifically forbidden, even if banked by players and not the house.

Language in the bill states that the house can have “no stake in who wins or loses,” making it so that only games played among customers are permitted.  This may also protect players from some of the table segregation policies some sites in other markets have attempted to restrict winning players.

Affiliates

Marketing affiliates would be considered service providers.  Affiliates must go through the same licensing procedures that apply to software providers and other similar service providers.  This includes affiliates paid through any manner, not just revenue share.

Player and Operator Penalties

There are penalties that make offering unlicensed online gaming in California a felony.  The same penalties apply to players.

Players would not be permitted to connect to California poker sites in public locations.  It would also be illegal to create a business for the primary purpose of allowing online poker access.

Gaming Commission Duties

The gaming commission was left with the duty of creating many policies.  These include:

  • Underage and problem gambling
  • Resolution of player disputes
  • Gaming technical standards, including hardware and software
  • Licensing and work permit issuance and guidelines
  • Most Suitability standards
  • Poker game rules and charges

No Clear Bad Actor Clause

AB 167 does not include a clear bad actor clause.  The language states:

(5) The person has associated with the criminal profiteering activity or organized crime, as defined in Section 186.2 of the Penal Code.

(6) The person has contemptuously defied a legislative investigative body, or other official investigative body of a state or of the United States or a foreign jurisdiction, when that body is engaged in the investigation of crimes relating to poker, official corruption related to poker activities, or criminal profiteering activity or organized crime, as defined in Section 186.2 of the Penal Code.

It also excludes those that have been convicted of a felony at any point or many misdemeanors in the past 10 years.  This may keep companies and individuals that have been indicted in the past out of the market, but not the current version of PokerStars, at least based on this language.

Rake and Tournament Fees

Rake would be charged through the standard used in California poker rooms. A set amount per hand that may be tied to the amount at certain stages of a cash game would be taken as oppose to the traditional percentage of the pot used by all other poker sites. It can be changed based on the limits. Tournament fees would be taken and added onto the amount that is included in the prize pool.

Sites Would Launch on Same Day

All licenses go into effect on same day. The suggestion in AB 167 is one year after regulations are set, but the gaming commission may change that. Companies that wish to cease operations must provide 90 days notice to the gaming commission.

Employees and Equipment Based in California

All employees with contact with players must be located in California. Player support must be available 24 hours a day, 7 days a week. All major components of the online poker business must also be located in California.

Player Verification

California poker sites must verify that a player is 21 years of age or older before accepting action. This will be done by comparing the submitted information to government databases. A credit card or other financial instrument must match the address confirmed through this database. Players that cannot be verified must go through a documentation check.

Geolocation would be required to determine whether a player was located in California at the time of play.

Banking

All credit and debit card deposits must have the words “Internet poker” in the description. Cash and money orders could only be accepted in person at licensed gaming establishments. Credit may not be extended.  Regulators could approve any financial instrument for deposits and withdrawals.

Problem Gambling

Problem gambling information must be displayed when a person registers an account and with every login to an online poker account. Players must be able to set limits on deposits, losses, and time played.

Account Creation

Accounts may be created in person, by mail, and over the Internet. Players must provide a Social Security Number to create an account.

Full bill text of AB 167 may found here.