California GO Committee Passes DFS Bill AB 1437; Poker Yanked from Hearing

The California state legislature returned to the topic of state-regulated online gambling yesterday, by hearing testimony and debate regarding two of three bills tentatively scheduled for consideration in the coming weeks.  The California House’s “GO” (Governmental Organization) Committee concluded its days work by passing on a nearly unanimous vote a bill, AB 1437, that would formally legalize and regulate daily fantasy sports (DFS) in the Golden State.

Seal_of_California.svgGO Committee Chairman Adam Gray’s AB 1437, the “Internet Fantasy Sports Game Protection Act,” was passed through to the California House’s Committee on Appropriations for additional consideration.  AB 1437 passed with ease after some political jostling during the day, eventually flying through on an 18-1 vote, with two committee members not present to vote.  The only committee member voting against AB 1437 on Wednesday was Marc Levine, an opponent of DFS who wrote a letter to California’s Attorney General in November asking her to take action against DFS sites operating quasi-legally, in a manner similar to the actions taken against DFS giants DraftKings and FanDuel in New York.

AB 1437, should it eventually pass, would implement state-level authorization in exchange for a share of the profits, in the form of upfront license fees and an ongoing percentage of revenue garnered by the licensed sites.  It also includes the usual bevy of player-verification and responsible-gaming requirements, along with an age 21 that would make the bill unpopular with college-aged sports fans.  Nonetheless, the bill as passed to the Appropriations Committee is far from a finished product, with several elements subject to change.  Even the amount of the initial licensing fee to be charged to DFS providers remains blank in the current version of the legislation.

That AB 1437 was able to come to a vote came only after pressure from the “Cali 7” group (now actually about nine tribes) changed the day’s original agenda.  These hardline, gaming-intensive tribal nations succeeded in removing two other gaming bills from being considered during the hearing.  One of those is GO Chairman Gray’s online-poker bill in California, AB 147, which has attempted to appease all interested groups, including the state’s racetracks and Amaya (PokerStars), the latter of which was specifically targeted in rival legislation that specified a Stars-targeting “bad actor” exclusion demanded by the hardline tribes.

Those nine or so tribes, including such powerful gaming groups as the Pechanga and Agua Caliente nations, also want to see the state’s pari-mutuel facilities excluded from online gaming in California (excepting horse and dog racing), demanding exclusivity to most forms of online gambling in California.  The stalemate in which the tribes have held hostage the online-gambling desires of California’s consumers has dragged on for several years, and shows no signs of ending any time soon.

Several groups expressed disappointment with the internet-poker legislation being pulled from consideration, including the California Nations Indian Gaming Association (CNIGA), which immediately issued a statement asking for a “political miracle,” in that Gray’s compromise poker bill receive thorough consideration.

Another bill, dealing with the authorization of legal sports betting in California, was also forced to be pulled.  That bill, AB 1441, was also introduced by Rep. Gray last year.  However, that bill has a lower priority, since it would go into effect only if the US federal government reverses itself on its standing PASPA law, which bans all forms of traditional sports betting outright in 46 of the 50 US states.

In addition to the incomplete DFS bill, the GO Committee did pass along one other bill.  AB 1335, also introduced by Gray, is unconnected to online gambling specifically but instead deals with all aspects of California tribal gaming, in that it continues and clarifies existing revenue-sharing protocols between the state’s tribal gaming operators and most of the the state’s over 100 tribal nations, most of whom have not constructed land-based casinos.


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