California AB 431 Amendments Published, Bill Remains Empty Shell
The California State Legislature today published the amended text of Assembly Bill 431 (AB 431), which received a hearing last week before the state assembly’s Governmental Organization (“GO”) Committee and was passed on to a second procedural committee in a virtually unanimous vote.
However, the amended bill’s limited contents confirm that little has changed. Examining the amended text of AB 431 shows that the discussion of the formal regulation of intrastate online poker remains gridlocked by the hardline demands of a few of the state’s powerful tribal nations. Those tribes, increasingly dubbed the “Cali 7,” have for years demanded exclusivity regarding the offering of online poker in the United States’ most populous single state.
None of the limited changes made to AB 431 appear to bode well for its future. Changes made to the shell bill’s introduction change the focus of the bill from “authorization” to “declaring the Legislature’s intent to authorize,” thus rendering this version of AB 431 as more of a proclamation than an actual bill.
Here’s a sample of the change, from the bill’s overview.
This bill would authorize the operation of an Internet poker Web site within the borders of the state. The bill would require the commission, in consultation with the department, to promulgate regulations for intrastate Internet poker. The bill would require those regulations to include, but not be limited to, a licensing process for an individual or entity to become an operator of an Internet poker Web site and rules for the operation of an Internet poker Web site.
This bill would declare the Legislature’s intent regarding the authorization of Internet poker within the borders of the state. The bill would require the Legislature, among other things, to include consumer protections for Californians in any Internet poker framework that may be adopted by the Legislature to authorize Internet poker in the state, to ensure that framework provides a fair share of revenue for the state, and to include strict standards in that framework to ensure that the Internet poker games are fair. The bill would also make related legislative findings and declarations.
In other words, it’s now a do-nothing bill, making it easy to see why it passed the GO Committee on a 20-0 (with one “no vote recorded”) tally. It’s also to see why two of the most powerful “Cali 7” tribes changed their official stance on the bill from “against” to “neutral.” The Pechanga and Agua Caliente tribal nations had filed letters of opposition with the GO Committee in regards to the initial form of the shell bill, preferring alternate, exclusionary bills that they had helped draft. In the current version of AB 431, post-amendments, there’s simply nothing left to protest.
Though the shell bill remains quire brief, a couple of other changes continue the same neutering trend. One of the secondary battles being waged by the hardline “Cali 7” tribes is to attempt the state, via the California Gambling Control Commission, to be the final arbiter of “fitness” regarding approved operators.
For no apparent reason, it seems, other than to appease the Pechangas and Agua Calientes, the amended Ab 431 removes its single brief mentions of “California Gambling Control Commission” and “[US] Department of Justice.” Instead, the single phrase “operated by qualified entities” has been inserted, with no mention of who will be designated to judge operators’ qualifications. Note also that references to “commission” and “department” were also excised from the bill’s introduction.
The implication of that change is clear. It’s an attempt to continue the “bad actor” debate which has stymied all previous discussions of California online-poker bills over the past six years. The excision of the CGCC and DOJ as potential overseers is aimed squarely at Amaya-owned PokerStars, which has already signed software partnership deals with two other California tribes and three major LA-area card rooms in the event regulatory legislation is passed.
Despite the general enthusiasm and congratulations issued last week regarding the passage of the bill from the GO Committee, the reality is dim. Any actual regulatory proposals remain stymied, and appear unlikely to move forward in the immediate future. The only apparent advantage is that by passing the initial shell bill in the form that it did, beating a May 1st deadline, the GO Committee avoided a two-thirds’ majority “urgency” limitation that has contributed to the death of earlier bills.
Nonetheless, a version of AB 431 with actual meat on the bones isn’t going anywhere, by the latest indication. The current shell version of AB 431 was re-read and approved by the Assembly’s GO Committee yesterday, and is scheduled to be moved on to the Assembly’s Committee on Appropriations, another mandatory California legislation hurdle.