Limited Bad Actor Clause Added to California Poker Bill
Compromise is a good thing most of the time. We all want to get our way all the time, but that’s not realistically possible, so the best solution is usually to act like adults and come to an agreement that can make both parties happy, even if it doesn’t give us all that we had originally hoped for. We don’t have to “win” a negotiation for it to be a success; we just have to end up with something that is fair to both sides.
PokerStars is not feeling good about any sort of compromise in California right now. According to multiple media outlets this past week, an amendment to the state’s online poker bill, AB 2863, has been added in order to shut world’s leading online poker room out of the market for five years.
For years now, a hardline coalition of Native American tribes, led by the Pechanga Band of Luiseño Indians and the Agua Caliente Band of Cahuilla Indians, has tried to get lawmakers to include a “bad actor” clause in any online poker legislation, barring any operator who offered games in the U.S. after the UIGEA was passed in late 2006 from every being able to acquire an internet gaming license in California. Another coalition of tribes plus the state’s largest card rooms and PokerStars have allied on the opposite side of the issue. Recently, the hardline group has softened its stance slightly, but not enough to let go completely of its bad actor desires.
The amendment that has reportedly been inserted into AB 2863 at the behest of the anti-PokerStars tribes would allow operators like PokerStars entry into the California market, but only after they sit out for five years. While that wouldn’t necessarily kill PokerStars’ long-term chances in the Golden State, it would deal them a serious blow because other sites would have a five-year head start on building customer loyalty.
There was some talk of including a clause that would let sites like PokerStars pay a $20 million fee to erase the waiting period, but that didn’t happen.
A second amendment was also added to AB 2863 that aims to set a flat 10 percent tax rate on gross gaming revenue, rather than a graduated scale which starts at 8.64 percent and grows to 15 percent for the largest operators. The flat rate clearly favors the large operators, of which Pechanga and Agua Caliente are two.
With the California legislative session winding down, it is possible that AB 2863 could come up for a vote in the full Assembly on Monday, though according to Online Poker Report, that vote is now less certain, as two more politically powerful tribes, the Viejas Band of Kumeyaay Indians and the Lytton Band of Pomo Indians have expressed opposition to the amendments and may have pressured the bill’s sponsor, Assemblyman Adam Grey, to cancel a possible Mondayvote.
The interesting thing here is that the Viejas and Lytton tribes want the bad actor clause. What they want, though, is for it to be a full five years. The amendment stipulates that the PokerStars ban would end in 2022, but because it could take years for all of the regulations to be drawn up and licenses to be issued, PokerStars could potentially only have to sit out, say, two or three years from when sites are actually up and running. Thus, the two tribes want the amendment redefined as instituting a five-year ban that starts from the day the first virtual cards are dealt.
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