Steve Ruddock California online poker bill AB2863 progress

After an expected vote turned into a contentious debate during what was expected to be a routine hearing last week, the California Assembly Appropriations Committee took a second crack at passing Assemblyman Adam Gray’s online poker bill, AB 2863, on Wednesday.

This time, the committee succeeded.

After another round of proposed amendments designed to quell the concerns of some lawmakers on the committee were considered, and even though only one was adopted, the Appropriations Committee did vote on AB 2863 Wednesday. And it did pass the bill – with virtually every member who voted yes doing so with reservations.

AB 2863 is now eligible for a vote on the Assembly floor.

The passage by the Appropriations Committee can technically be called progress, but anyone watching the hearing would find it hard to categorize it as such, as a slew of unresolved issues hang over the process.

The legislative progress of AB 2863 is making is more or less a case of the can being kicked down the road. Everyone seems quite willing to pass the bill out of committee, but unwilling to support the bill.

Legislators are making it crystal clear that despite an affirmative vote in committee, they reserve the right to vote no if the measure comes up for a vote on the Assembly floor.

New fiscal amendments shot down

The recently proposed amendments to AB 2863 would have done little to bring the two coalitions of stakeholders closer together – movement that seems impossible, as both sides seem unwilling to budge from their current positions.

Instead, these amendments were aimed at garnering support in the legislature, as several members of the Appropriations Committee expressed concerns over some of the fiscal elements of the bill last week.

Interestingly, despite all the hemming and hawing at the last hearing, none of the fiscal amendments were adopted.

These failed amendments included:

  • Dropping the percentage of revenue placed in the horseracing fund from 90 percent to 85 percent.
  • Half of the proposed $12.5 million licensing fee would be used towards future taxes owed.

Suitability language changes again

One amendment that was adopted on Wednesday aimed to make the suitability language in AB 2863 more palatable to the opposition group and to certain legislators – or at the very least, to make it more difficult for them to rally supporters.

Despite swinging the pendulum back in the direction of the Pechanga coalition on this issue, the swing wasn’t far enough, and representatives from the six tribes that make up the opposition group all remained opposed to the bill.

The new suitability language moved the bright line date back to 2006 (it had previously been moved forward to 2011), but offered a potential reprieve, provided:

  • The company pay a $20 million fee or waits a period of five years;
  • Tainted assets (to be determined by regulators), such as player lists, acquired between 2006 and 2011 are prohibited;
  • Owners and executives that were with the company between 2006 and 2011 are no longer involved.

As noted, this stricter suitability language did not win over the hearts and minds of the Pechanga coalition, and several committee members also voiced concerns over this issue.

One step forward and two steps back

During the hearing we also heard several new “concerns” expressed by lawmakers, ranging from punishing players who use offshore sites, to adding a second subsidy for non-gaming tribes.

There was also talk of much stricter suitability language, foreshadowing the debate we will likely see should the bill be brought up on the Assembly floor.

Despite all of these “policy” issues that still need to be worked out, the general mood among the committee members (based on their statements) seemed to point to the bill getting a shot on the Assembly floor.

Rincon statement

Just after AB 2863 cleared the Appropriations Committee, Rincon Chairman Bo Mazzetti issued the following statement:

“On behalf of the Rincon Band of Luiseño Indians, I applaud the Assembly Appropriations Committee for passing Assembly Bill 2863 and moving the bill to the Assembly Floor. We thank the Assembly Leadership and Assemblyman Gray for their leadership on this issue.

“Assemblyman Gray brought together an unprecedented group of Tribal governments, cardrooms, horse racing industry and labor groups to support Internet poker legislation.

“AB 2863 establishes a safe and secure environment for Californians to use today’s technology to play poker. The bill establishes a tiered tax rate that lets the state receive its fair share of revenue and adjust the rate to ensure that the industry can develop and grow.

“We look forward to the Assembly Floor vote in the coming days and the very real possibility of an Internet poker bill passing this year.”

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.