Steve Ruddock California online poker assembly Monday

Don’t look now, but online poker might be back in play in California.

Rumors are swirling that an amendment to AB 2863, Assemblyman Adam Gray’s latest effort to legalize online poker, is currently being considered, and that this amendment could solve the suitability issue that has been one of the key issues preventing an online poker bill from passing in the Golden State.

We shouldn’t have to wait very long before we see the new language.

According to Adam Gray’s Chief of Staff Trent Hager, who spoke to the Los Angeles Times this week, the online poker bill will be brought to the assembly floor on Monday. Hager went on to tell the Times, “and we will continue to work to move both consumer protection pieces [online poker and daily fantasy sports] forward.”

In addition to the Times story, multiple sources began hinting that the new amendment would address the Pechanga coalition’s suitability concerns.

First, editor Victor Rocha:

And in the latest edition of the Grove Report email newsletter, Chris Grove writes:

“… we’re getting pinged by several stakeholders with indications that an amendment to AB 2863 is in the works, one that would (again) revamp bad actor language. Details are fluid, but from what I’m hearing it’s not the kind of compromise that Amaya would be on board with (also hearing that there’s some level of pushback from within individual coalitions).”

All of these rumors caught the attention of the Poker Players Alliance, which tweeted:

The final hurdle has been reached

Earlier this year a compromise was reached with the horse racing industry, which left the suitability issue (previously referred to as a bad actor and tainted asset clauses) as the only major hurdle that needed to be addressed.

It’s unclear if the new suitability language will do the trick, as the two sides were miles apart when it was last discussed in late June. It seems unlikely that California will be able to “thread the needle,” as Rocha put it, considering how large a divide remains.

The Pechanga coalition was calling for PokerStars to consent to a 10-year sit-out period along with a $60 million one-time fee.

The PokerStars coalition, along with what’s become known as the coalition of the willing, had tentatively agreed to the current suitability language that calls on it to pay a one-time fee of $20 million in lieu of a five-year sit-out period.

That being said, even if the needle is threaded, a consensus agreement doesn’t yet exist when it comes to licensing fees, tax rates, or even the current amount of the horse racing subsidy.

So, even if some type of compromise is reached on suitability, there is still a lot of work left to be done before we get to a point where the bill has enough support to pass the legislature.

Groundhog Day

Now it’s time for the “cold water” portion of the program.

Chris Grove’s tweet appears to suggest that the new compromise might bring the Pechanga coalition on board, but at the same time would cost the support of the PokerStars coalition.

We’ve been down this late-session-push road before in California, and nothing of substance has materialized. While the continued talks are a good sign, there is still a lot of work to be done, and a lot of compromises to be reached in what amounts to about three weeks.

And what about the Senate?

Even if the bill does manage to get out of the assembly, the state senate seems uninterested in taking up the matter. In the same LA Times column that quoted Gray’s chief of staff, senate leader Kevin DeLeon was also asked about online poker and daily fantasy sports.

The Times quoted DeLeon as being, “not in a rush” to put a regulatory system in place for DFS or online poker.

Also of note, DeLeon’s chief of staff, Dan Reeves, told the Times that while an online poker bill is active in the assembly, the DFS bill missed a deadline and is “technically dead,” but could be revived by Gray.

Steve Ruddock
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