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Poker Groups React to California Online Poker Bill

As you have probably read by now, considering you are perusing this website, California Assemblyman Mike Gatto (D – Los Angeles) introduced Assembly Bill 9 this week in yet another attempt to legalize and regulate online poker in the most populous state in the U.S. The “Internet Poker Consumer Protection Act of 2015,” as it is called, is already coming under fire from groups who see it as nothing more than an attempt to protect gaming interests in the state, rather than customers.

One of the first reactions came from a group dubbed the “Pokerstars Coalition,” comprised of Native American Tribes and California card rooms that have agreed to team with Amaya Gaming, the parent of PokerStars, to offer online poker when and if it becomes legal in California. The tribes are the Morongo Band of Mission Indians and the San Manuel Band of Mission Indians and the card clubs are the three largest in the state – the Commerce Card Club, the Hawaiian Gardens Casino, and the Bicycle Casino – so this is no tiny, voiceless rebel group whatsoever.

The coalition issued the following, brief press release about Assembly Bill 9:

As a coalition, we are committed to working with legislators and our other partners in the gaming community to pass Internet poker legislation in 2015 that establishes a vibrant, competitive marketplace, provides superior consumer protections, and ensures that the state receives a reasonable return. We are convinced that the various interests must work together if we are to be successful in establishing a well-regulated environment and the best-in-class Internet poker industry for California.

Unfortunately, AB 9 is a rehash of previously unsuccessful proposals. Any bill that seeks to establish artificial competitive advantages for some, while denying Californians the best online poker experiences, will only serve to divide the community and will be opposed by our coalition.

The “artificial competitive advantages” refers to the “bad actor” clause included in the bill. It seeks to make any poker operators who offered games to Americans after the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA) ineligible to receive licenses:

In order to protect the integrity of, and promote public confidence in, intrastate Internet poker, the Legislature finds that licenses should not be granted to those entities and persons who knowingly engaged in unlawful Internet gaming after December 31, 2006. In addition, the Legislature finds that the use for intrastate Internet poker of brand names, trademarks, customer lists, software, and other data associated with, or developed or used in connection with, unlawful Internet gaming after December 31, 2006, is likely to undermine public confidence in intrastate Internet poker and to be inconsistent with the purpose of this chapter to protect the people of California by  permitting regulated intrastate Internet poker that has no connection to previous unlawful Internet gaming activity.

This obviously affects PokerStars, as it continued operating in the U.S. until Black Friday in 2011. The saving grace for Stars has thought to have been its purchase by Amaya Gaming earlier this year. Amaya is in the clear when it comes to the bad actor clause and since it is in charge of PokerStars now, rather than Stars’ former ownership and management, the common thinking goes that PokerStars should not be lumped in as a bad actor. But Assembly Bill 9 goes further, saying that assets acquired by an otherwise eligible company are still banned:

“Covered asset” means any brand or business name, including any derivative brand name with the same or similar wording, or any trade or service mark, software, technology, operational system, customer information, or other data acquired, derived, or developed directly or indirectly from, or associated with, any operation that has accepted a bet or engaged in a financial transaction related to that bet from any person in the United States on any form of Internet gaming after December 31, 2006, except when permitted under federal law and laws of the state where the player was located.

The coalition basically says all this is bullshit and is an effort to shield the state’s Tribes and card rooms from strong, legitimate competition. They all know that PokerStars would have the chance to dominate the industry as it does now internationally, so it is in the interest of existing special interests to do whatever they can to legally block them. Forget protecting customers, lets protect ourselves.

The other group that has spoken out while not taking a formal stance on the bill, is the grass roots poker advocate group, the Poker Players Alliance (PPA). In an interview with, PPA Executive Director John Pappas takes a slightly more tactful approach in commenting on the bill’s exclusion of certain potential applicants, saying, “We’ve always felt they should open it up to all possible participants and it shouldn’t be limited to just card rooms and tribes. The more applicants, the greater the potential for a better product. The bill also specifically excludes Amaya and we think that’s unwise and unfair.” ppa logo

Pappas also takes aim at one of the more unique parts of the bill, which would require initial deposits and certain subsequent deposits and withdrawals to be made in person, either at a casino, card room, or licensed satellite service center. It is supposedly a sort of “know your customer” effort to satisfy critics afraid of potential money laundering or play by children, but Pappas thinks it is an awful idea.

It defeats the purpose of online poker, to be able to deposit from your computer. I think it’s someone’s misguided understanding on how to establish synergies between brick-and-mortar casinos and online players. There are other ways to bring people to your properties.

I don’t know if this is a good solution for smaller Indian Tribes either. The smaller tribes are typically remote, so requiring people to go to those casinos to sign up is defeating yourself before you get off the ground. What you want to do is get people playing online and then get them to the casino. Certainly the most diehard enthusiasts will sign up in person, but there are hundreds of thousands that wouldn’t bother to.

Assemblyman Gatto did tell that the satellite service center idea is supposed to be a way to help smaller, more remote casinos by giving them the chance to take extend their footprint and give them a way to take care of customers from whom the casino might not normally be convenient.


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