California Assemblyman Mike Gatto Pushing Online Poker Bill for 2015

December 3rd, 2014 | by Brian Corlisse
California online poker bill Mike Gatto

Assemblyman Mike Gatto has introduced a new bill that would regulate online poker in California. (Image: Rich Pedroncelli /AP)

If Assemblyman Mike Gatto has any say in the matter, California online poker will be a hot topic again in 2015, as a bill to regulate the industry in the state has already been introduced to the State Assembly.

Gatto (D-Glendale) introduced the measure, known as AB 9, which would allow for the regulation of intrastate online poker sites in California, and resembles another proposal made by a coalition of tribal interests over the summer.

In particular, two of the biggest sticking points in the draft legislation suggested from the tribal coalition still remain in Gatto’s legislation. First, the only entities welcome to operate an online poker site in the state would be Native American casinos or commercial card rooms.

This policy will undoubtedly upset the state’s powerful horse racing industry, as it has in the past.

Bad Actor Clause Still Present

Secondly, the bill still contains a so-called “bad actor” clause that would keep out any company that continued to offer online poker in the United States after the end of 2006. As always, the big player affected by this would be PokerStars, which has had severe difficulty in earning licenses in regulated US markets to date.

Gatto’s bill includes language that makes it clear that even companies that have purchased bad actors should not receive licenses, meaning that Amaya Gaming would likely fare no better than PokerStars would have before it was acquired by the Canadian firm. However, there is also a section that says this provision can be waived if the company can provide “clear and convincing evidence” that it would not “adversely affect the integrity of, or undermine public confidence in, intrastate Internet poker.”

Satellite Service Centers Could Give Smaller Players a Role

While California could likely support more online poker rooms than New Jersey or Nevada, the number of viable sites would still be limited. That may have been the reasoning behind one new feature of Gatto’s bill: a requirement that players register for accounts and make their initial deposits in person.

These in-person deposits can either be made at a casino or card room that operates the site, or at “satellite service centers,” which can be located at any card room or tribal casino in the state.

Such a move would allow smaller venues that can’t support their own online poker rooms to be a part of the industry by accepting deposits and processing larger withdrawals. That, in turn, will also generate more traffic in these locations, which could offer secondary benefits.

“A lot of people in the gold rush got rich selling shovels,” Gatto told PokerNews,”and we think we have a proposal that has shovels in it now.”

In a statement released by Gatto’s office, the Assemblyman said that California is potentially missing out on a great deal of money by failing to regulate online poker.

“The status quo is a lost opportunity,” Gatto said. “California could receive significant revenue for merely regulating and legitimizing an industry that Californians already participate in but send their dollars overseas.”

While the bill may give online poker an early start in 2015, it seems unlikely that the bill will gain any traction in the near future. Gatto said that he hopes some sort of consensus can be reached among the various gambling interests in the state by August.

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