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California Online Poker Bill Pulled From Hearing

Legislation Won't Be Considered Wednesday

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The first week of 2016 was set to have an online poker bill in California considered in a hearing, but the proposal unfortunately has been pulled from the hearing’s agenda.

Lawmakers in the state’s Governmental Organization Committee will have a hearing Wednesday at 1:30 p.m. local time in Sacramento, but a measure previously on the agenda was Assembly Bill 167, legislation introduced early last year by Assemblyman Reginald Jones-Sawyer (D-South Los Angeles).

The bill is seen as favorable to racetracks and PokerStars, two potential players in the California intrastate web poker market that some tribal gaming groups don’t want to be dealt a hand.

Some tribes want the inclusion of a so-called “bad actor” clause which would prevent PokerStars from doing business in California because of past run-ins with the federal government. PokerStars settled with the U.S. government in 2012 without admitting wrongdoing for more than $730 million, and roughly two years later the company was sold to Amaya Gaming Group for $4.9 billion. Last year, PokerStars received an online gaming license in New Jersey.

The state of Kentucky late last month ordered PokerStars to pay $870 million for illegally doing business with roughly 34,000 Kentuckians from 2006 to 2011.

PokerStars has nearly 70 percent of the global online poker market.

Six powerful tribes wrote a letter last March calling AB 167 “fatally flawed,” and saying:

Our Tribal Governments have invested many hundreds of millions of dollars in brick-and-mortar operations that create tens of thousands of jobs for Californians. We did so in reliance on the rights granted by the people of California and the compacts we have negotiated with the State in the exercise of those rights. Legislation like AB 167 – which could threaten these rights, these substantial investments, and so bitterly divide California Tribes – should not move forward solely for the sake of supporting a business model that might possibly benefit a few tribes in the short term, to the certain and permanent detriment of all other tribes, not to mention, the citizens of California.

A coalition including PokerStars, leading California card rooms and two tribes have opposed legislation as well. That group said that a different bill would “establish artificial competitive advantages for some.”

California stands as the largest potential online poker market in the country.

It has been estimated that the state’s online poker market could eventually be worth more than $380 million a year. Between 2009 and 2010, California players accounted for 16 percent of U.S. revenue and four percent of worldwide revenue in online poker.

California’s tribal gaming industry is the largest in the country. Tribal gaming is a $28.5 billion market in the United States, with the California region representing $7.3 billion of that figure.

AB 167 was one of several online poker bills considered last year in the Golden State. A different California online poker bill advanced out of the same legislative committee in April. It was the first time any California lawmaker had ever voted on an online poker bill, but no momentum was realized.