Steve Ruddock sports betting DFS bills California

With online poker expansion talks at a standstill, California Assemblyman Adam Gray is turning his attention to other forms of gambling expansion, namely sports betting and daily fantasy sports.

Gray introduced two new bills on September 10, one that could legalize sports betting and one that would legalize fantasy sports in the Golden State.

The legislature is now out of session until 2016, but because California uses a two-year cycle (2015/2016) these two bills will be waiting when lawmakers return.

Gray was able to introduce these bills by using the inventive “gut and amend” workaround available to California lawmakers – we first introduced you to the gut and amend process in a May 2014 article when iPoker legislation was facing a looming legislative deadline.

Gut and amend allows California lawmakers to take an existing bill that has met all of the legislative requirements, and more or less erase it and replace it with a completely different bill. This allows the bill to overcome certain legislative deadlines, but the new bill does need to pass both houses before it can be sent to the governor.

Sports betting

Unlike the ongoing attempts by New Jersey to override the federal sports betting ban, Gray’s sports betting bill (AB 1441), dubbed the California Interactive Sports Wagering Consumer Protection Act, seeks to preemptively legalize sports betting in California should the federal government change or repeal the 1992 Professional and Amateur Sports Protection Act (PASPA).

In addition to changes at the federal level, legalizing sports betting in California would require a change to the state’s constitution. This unenviable task requires the passage of a bill by a two-thirds vote in both houses of the legislature, followed by ratification by California voters on a statewide ballot referendum.

Like the state’s online poker expansion efforts, the sports betting bill will almost certainly cause plenty of infighting between the state’s varied gaming interests, as Gray’s bill would authorize tribes, card rooms, and racetracks to offer sports betting; this comprehensive licensing has been a major point of contention in the state’s online poker fight.

More information on Adam Gray’s AB 1441 sports betting bill can be found here.

Fantasy sports

Gray’s fantasy sports bill (AB 1437), the Internet Fantasy Sports Game Protection Act, would not only legalize daily fantasy sports contests at both online and at brick and mortar locations, it would also bring the industry under the regulatory umbrella of the state.

Eleven other states have looked into legalizing fantasy sports in recent years, but California is just the third state to explore legalizing and regulating the industry – Texas and Illinois being the others – and seems the most serious.

Under Gray’s bill, to offer DFS contests to California residents, companies like DraftKings and FanDuel would have to apply for and receive a license from the California Department of Justice.

The licensing fees and tax rate to be imposed on DFS operators have not been worked out at this time.

More information on Adam Gray’s AB 1437 DFS bill can be found here.

Implications for PokerStars in California

If daily fantasy sports is legalized and regulated in California, one of the companies that will almost certainly set up shop is StarsDraft, the DFS site affiliated with PokerStars and owned by Amaya Gaming.

As we speculated a few weeks back, Amaya’s DFS launch could help pave the way for PokerStars’ licensure in California, making it very difficult for PokerStars’ naysayers to call them bad actors when they already possess a similar license to offer DFS contests.

You can read a more complete breakdown of the potential ramifications of Amaya (PokerStars) entering the DFS market here.

Steve Ruddock
Steve Ruddock - Steve is one of the most recognizable names in the online poker media space. He brings his deep knowledge and equally deep well of opinions to his coverage at CaliforniaOnlinePoker.com.