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California Racetracks Get Behind Online Poker Bill

Horse Racing Industry Happy With $60M Annually From I-Poker Industry


California is set to have an online poker hearing Wednesday, and just days ago the state’s politically powerful horseracing industry signaled its support for the latest version of online poker legislation on the table.

The crucial I-poker hearing, the first of its kind this year, will be at 1:30 p.m. local time in Sacramento, and it will take place in the Assembly Committee on Governmental Organization. The online poker bill, which was introduced in February, is classified as an “urgency” measure. The state has looked at the issue for at least the past six years.

According to a report from Daily Racing Forum, a letter was sent to Assemblyman Adam Gray, author of the legislation, indicating that the $60 million annual payment is a figure that the racing industry likes. The only online wagering currently allowed in the Golden State is on horse races, so if the tracks can’t operate online poker they want to be compensated. Only tribal gaming groups and commercial card rooms in the state would be online poker operators under the bill.

Online poker operators would be able to partner with approved technology firms to run the games. It has been estimated that California’s online poker market could support between six and 10 online poker operators, thanks to a market potentially worth nearly $400 million.

It’s the largest market in the nation, but there is a limit on how many poker sites there that could survive. California has a population of roughly 39 million people.

The three-page letter dated April 20 was signed by executives with Del Mar, Los Alamitos, the fair circuit, California Thoroughbred Breeders Association, California Thoroughbred Trainers association, Jockey’s Guild and two labor unions representing racetrack employees.

“On behalf of the California horse racing and breeding industries, we write to express our appreciation to you and your staff for your efforts on AB 2863,” the letter said. “More specifically, we write on behalf of the racetracks, fairs, jockeys, pari-mutuel clerks and thousands of California horse owners and trainers who have invested hundreds of millions of dollars into our state’s economy to support the $2.5 billion horse agribusiness.”

The tracks said that the $60 million is non-negotiable.

“We recognize the $60 million annual payment in AB 2863 is intended to compensate the racing industry for being excluded from eligibility for i-Poker licenses, the loss of the industry’s current Internet gaming exclusivity in the State, and the projected loss of market share for [advanced deposit wagering]. Given this sizeable impact on our business, we must condition our support for the legislation on a firm commitment to maintain the $60 million minimum payment throughout the legislative process. We are not prepared to negotiate on this baseline number.”

“We note that the current draft of AB 2863 contains blanks for the up-front license fee and tax rate,” the letter added. “Because the $60 million fee is to be solely funded from license fees and taxes, we must look closely at what the actual fees and rates are to assess the likelihood that the $60 million will be available.”

Another key component to the racing industry’s support for the bill is that the legislation won’t “preclude a horseracing association from participating in future Internet gambling activities that do not include Internet poker.”

For now, California is only considering peer-to-peer, non-house banked poker, and not other online casino games like the ones that run in the states of New Jersey and Delaware. Nevada, which has online poker, does allow mobile sports betting.

Last April, an earlier version of Gray’s bill passed out of the committee, which was the first and only time ever that a California online poker bill was voted on. The tracks supporting this year’s bill provides a lot of optimism for more progress. In order to become law, the bill must pass both the Assembly and Senate and then be signed by the governor.

Just last week, AB 2863 was amended to revise its position on the so-called “bad actor” issue, which could prevent online gambling companies that facilitated games for Americans between 2006 and 2011 from participating in California online poker.

Tags: California


over 6 years ago

Corruption...i mean err uhh capitalism at its finest.