California Senate Bill 1463 is the latest effort to allow for an intrastate online poker in the State of California. Introduced on February 24, 2012 by State Senators Rod Wright and Darrell Steinberg, this bill is similar to the one introduced in 2010 by Wright, which was known as SB 45.
According to the bill, it would “establish a framework to authorize intrastate Internet gambling.” More specifically, SB 1463 would allow authorized operators to apply for licenses to operate gambling websites in the state. These licenses would be valid for ten years, and would only allow operators to offer games specifically authorized by the state government.
This bill would initially allow only for online poker to be offered to players. However, after two years, California could approve additional online gambling games if both state regulators and the state legislature approve of the additions Also, only games that are currently legal on California’s brick-and-mortar casinos would be allowed at online gambling sites.
In order to be an authorized operator, the prospective licensee must be either a federally recognized Native American tribe, or a private company already in the state’s gambling industry. That could include any of the states many card rooms, horse racing tracks, or off-track betting operators. However, all licensees are required to have a physical presence in the state of California, and all employees of the company or tribe who are directly involved with operating or supporting the California online poker site must be located in the state (though software developers and other similar employees may be from outside of the state. In addition, there are rules in place to prevent companies that allowed US players to play real money poker after 2006 from participating in California’s online poker framework.
To gain a license, operators must first pay a license application fee. While the amount of the fee has not yet been finalized, it appears that the cost would be between $1 million and $5 million. If a license is approved, the licensee must then also pay a $30 million license fee at the beginning of the ten-year license term. This is actually a prepayment of a 10% tax of each site’s monthly revenues; while sites would have to report their revenues every month, they would not pay additional taxes until after they’ve passed the $300 million mark in total revenues.
For players, signing up for these sites would be relatively easy. The sites would only be available to players aged 21 and over, and they must live in the state of California. In order to register for a site, players would be required to give some basic information, as well as identification that would prove they were 21 years or older, as well as their Social Security number. Players would additionally have the option to set up loss limits, deposit limits, or even block themselves from playing on California’s licensed sites entirely.
While battle lines are still being drawn between supporters and detractors of SB 1463, it’s likely that opinions will be divided in a similar manner as with other online gambling proposals. Many feel that the added revenue from the sites is critical for California given its current budget deficit, while others oppose the bill based on fears of increased problem gambling. The state’s many Indian tribal groups are also split on internet gaming, with some seeing it as a way to gain additional revenue and others fearing that they’ll be left out in the cold while larger groups dominate the online poker landscape.