Just when it seemed that California might skip trying to regulate online poker in 2017, lawmakers finally file a new bill.
The good news is that California has officially reentered the race to regulate online poker. The bad news is that the bill is still lacking regarding suitability.
Jones-Sawyer Steps Up to Champion iPoker
Assemblyman Reggie Jones-Sawyer has filed AB 1677, the Internet Poker Consumer Protection Act, his most recent attempt to legalize and regulate online poker in California.
Jones-Sawyer has filed similar legislation in the past but Assemblyman Adam Gray stepped forward in 2016 as iPoker's champion.
Last minute maneuvering by Gray effectively killed any chances of a bill passing last year and most questioned whether anyone would try again in 2017.
New Bill Includes Racing Compromise But Little on Suitability
Taking a page from 2016, Jones-Sawyer included the same compromise with the horse racing industry in AB 1677. Racetracks would get a yearly stipend of 95% of the first $60 million collected each year by iPoker operators.
They could serve as service providers prided that at least half of the revenue goes to the track. Considering that there was little true opposition to this agreement, there's little reason to believe this will be a sticking point.
However, we cannot claim the same when it comes to suitability. Overall, there's no real "bad actor" clause to speak of and rather, Jones-Sawyer prefers to leave that matter to regulators.
This is in line with his previous attempts to pass iPoker regulations in the past. Unfortunately, this will probably be a sticking point for tribes and likely to cause further delays.
Taxes and Fees
Looking at the financials of the bill, things seem pretty standard. State-run card rooms and Indian tribes can apply for a seven-year license for $12.5 million.
The fee will go towards future taxes and the tax rate is a progressive one based on revenue. The default rate is 8.847% provided that annual revenues are under $150 million for the industry.
The rate goes up to 10% for revenues up to $250 million and then 12.9% for revenues up to $350 million. Should the state exceed $350 million, the tax rate is 15%
Bill Not Likely to Move in Present Form
In its present form, there's little chance that this bill does more than pass committee yet again. The obvious reason, as has been the case for years, is suitability.
AB 1677 does nothing to resolve an issue that has plagued the state for years and PokerStars has proven they are not willing to compromise in any meaningful way.
Some Tribes, particularly the Pechanga Coalition, will accept nothing less than a meaningful pound of flesh from PokerStars.
The language in the bill virtually guarantees a gridlock on the matter, so don't expect anything to change unless Jones-Sawyers modifies that portion of the bill.