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California Moves Closer to Intrastate Online Poker

California Moves Closer to Intrastate Online Poker 0001

The bill by California Assemblyman Lloyd Levine (D-Van Nuys) which would lead to the legalization of intrastate online poker in California has cleared a significant legislative hurdle and is on its way to the Senate Appropriations Committee in August, its final stop before coming before the full State Senate for a vote. If the bill is passed, and signed by the governor, California would become the first state to legalize intrastate online poker for its residents.

The California Gambling Control/Intrastate Online Poker Legalization Act, AB 2026, as originally written, was designed to require the preparation of a study within the state Department of Justice on the suggested guidelines and structure for the regulation of online poker within California. As it has moved through the legislative process, however, the bill's focus shifted from merely studying and making recommendations with respect to online poker, to actually authorizing and implementing online poker within the state.

In an interview shortly after he first introduced AB2026, Levine said, of his bill, "This is an attempt to do what the federal government allows – provide people who want to play in California at least the opportunity to play internet poker in a way that they can be certain is safe and regulated."

The UIGEA – the Unlawful Internet Gaming Enforcement Act – ended legal internet poker in the United States and sent poker websites offshore. There is an exemption in the federal law, however, which permits each state to allow intranet (meaning within-state) – but not internet – poker so long as certain conditions are met. According to Assemblyman Levine, his bill would meet those conditions by regulating internet poker provided by companies located in California to those players living in California. And, indeed, the California legislative counsel examining the proposed law agreed that "the operation of online poker for intrastate transactions qualifies under the UIGEA exemption and does not violate the four federal Acts referenced in UIGEA."

When the bill was first introduced in the Assembly back in February, the stated purpose was merely to study the legalization of online poker in the California. But, after its approval in the Assembly and a heated debate in the Senate Governmental Organization Committee (GOC), the bill that is heading to the Senate Appropriations Committee next month is quite different. As amended last month in a 6-to-1 Committee vote, the bill now requires the California Bureau of Gambling Control to consult with the California Gambling Control Commission (CGCC) in order to adopt regulations for the establishment of intrastate online poker by July 1, 2009.

Poker Voters of America President Jim Tabilio said his organization, which serves as the bill's citizen sponsor, is extremely pleased with the favorable Committee vote. "It's a good sign that the legislators are taking this issue seriously, understand the importance of the bill and are asking the right questions," said Tabilio. "The plan going forward is to bring together the potential stakeholders to help craft a final version of the bill that protects Californians who play online and maximizes revenue for the state."

Opponents of the bill include tribal gaming organizations worried that, at worst, they would be excluded from any new online poker business, or, at the very least, would have to amend their existing gaming compacts with the state to be able to participate in this new arena. So far, only the Morongo Band of Mission Indians has registered a formal opposition to the bill, and that was only on procedural grounds based on the bill being amended from a study bill to one which would be implemented. But, the other gaming tribes are no doubt closely monitoring the progress of Levine's bill. Indeed, the support and involvement of tribal gaming is viewed by some as key to the bill's passage. "If they're not going to play, it's not going to happen," said Tabilio. "We want the tribes to be able to play."

The bill requires that "licensed gambling establishments" would have to register with the Commission and would be charged a registration fee. According to AB 2026, "a licensed gambling establishment shall offer intrastate internet poker only on a network approved by CGCC containing internet websites that are registered with CGCC to offer that service. A licensed gambling establishment shall not offer internet poker independent of that network." The bill also makes provision for measures to be taken to ensure player protection.

"We said four months ago that the goal of Poker Voters of America was creation of a regulated online intrastate system that conforms to Federal law and protects California players by licensing legal, secure and regulated alternatives to offshore online poker," said Tabilio, speaking to the media following the committee hearing. "[The Committee's] vote confirms that we're on track to accomplish that goal."

California, estimated to be the home of some two million online poker players, has been the focal point for the move toward legalizing online poker for some time. Last year, California poker player Anthony "Tuff Fish" Sandstrom started a petition to initiate a state-run online poker site for residents of the state. His petition was approved by the California Secretary of State, and scheduled for the February 2008 ballot, but was later withdrawn by him and not pursued any further.

Assemblyman Levine is hoping for implementation before the end of 2009. "It's about trying to set up a system to allow people the freedom to play poker on the internet," he told the Gaming Industry Media in an interview. "So we hope to have this bill passed through the legislature by the end of August and signed into law in the fall. My hope is that it would go into effect in January of next year. We would then have the Division of Gaming control and the attorney general's office spend whatever brief period of time they would need to do to draft the appropriate regulations and hopefully, optimistically, sometime the middle of next year we could actually have legal poker online in California."

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