Steve Ruddock PokerStars Coalition support letter CA online poker amendments

On Wednesday, we found out Assemblyman Adam Gray’s online poker bill underwent some plastic surgery, as several proposed amendments were added in an attempt to deal with the two key remaining issues believed to be preventing the legalization of online poker in California.

On Thursday, the PokerStars coalition, comprised of Amaya (PokerStars), and their California allies, the Morongo Band of Mission Indians, the San Manuel Band of Mission Indians, Bicycle Casino, Commerce Casino, and Hawaiian Gardens Casino, sent a letter of support for the bill.

The coalition wrote in part, “We applaud Assemblymember Adam Gray for moving the ball forward on iPoker and addressing the final two key issues in his bill AB 2863.” The letter concludes by saying, “For too long this issue has left consumers vulnerable and we are hopeful that 2016 brings closure, and a safe, regulated and competitive marketplace.”

you can read the full statement at the end of the column.

The two resolved (?) issues

If you haven’t seen the new amendments, I broke down the new version of AB 2863 in a column yesterday. So without going to deep into the changes, here’s how they fit into the PokerStars coalition’s letter, which indicated these were the final two issues left to be dealt with.

First, the proposed amendments provide precise numbers for the licensing fees and taxation rates operators would be obligated to pay.

More importantly, the bill now possesses a compromise that could solve the longstanding stalemate over the handling of suitability, namely, whether the bill should contain a bad actor clause that punishes online gaming companies that have operated in U.S. markets in the past. Bad actor clauses are widely believed to target one company, PokerStars, but do extend to other entities.

The bill has moved the bright line for accepting U.S. wagers from December 31, 2006 to December 31, 2011. This change serves to keep bad actor language in the bill, but moves PokerStars out of the unsuitable category (the company offered online poker games to U.S. players through April 15, 2011) and into the suitable category.

A company like Bovada (Bodog) would still find itself unsuitable for licensure based on this language.

Is PokerStars ok with the database concession?

In exchange for the moving forward of the suitability date five years, it appears Assemblyman Gray is asking PokerStars to forfeit its California database.

When I opined that this could be a point of compromise in 2014, a PokerStars representative called this a nonstarter, saying, “disallowing PokerStars’ database could be viewed as an unconstitutional taking and is not something on the table.”

As late as April of this year, the coalition was still against the idea, mentioning it in a letter of support sent in April, but its position seems to have softened a bit:

“Our coalition does have some concerns with the bill as drafted and proposed amendments that we have seen. Namely, we are concerned about provisions that would restrict the ability to use customer databases, as that will only serve to stunt the growth of the iPoker market and the revenues available to the state.”

If I had to speculate, I would imagine PokerStars and its allies could live with this exchange. The real question is: Is this really a point of compromise that can end the stalemate?

Is the Pechanga coalition ok with the new suitability language?

Even if PokerStars is amenable to conceding its database, this doesn’t mean the Pechanga coalition will concede to the new cutoff date for bad actor language.

PokerStars may not like losing the database, but if I can continue to speculate, it’s hard to believe Pechanga and its allies will consider the loss of their database (a database that is already five years out of date) a fair exchange for dropping their support of a complete prohibition on PokerStars.

Bottom line: The new bill is certainly specific, but we still don’t know if these “compromises” have universal support.

My guess is no.

Full Statement from the PokerStars coalition

“We applaud Assemblymember Adam Gray for moving the ball forward on iPoker and addressing the final two key issues in his bill AB 2863. This is a step in the right direction and we look forward to working with him and bill co-author Assemblymember Frank Bigelow in the coming weeks to get AB 2863 across the finish line.

“Our coalition has long-supported a competitive online poker marketplace in California that offers choices and strong consumer protections; rigid suitability standards; strict oversight of operators and licensees; and provides a financial return to the state.

“Our coalition commends Assemblyman Gray and his leadership both last year and this year to authorize and regulate online poker. For too long this issue has left consumers vulnerable and we are hopeful that 2016 brings closure, and a safe, regulated and competitive marketplace.”

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.