Assemblyman Adam Gray
has amended his bill to legalise online poker in California, setting out tax
rates based on collective revenue and attempting to compromise on the disputed
issue of ‘bad actor’ clauses.
This compromise would
allow PokerStars to enter the market even with such a clause in place.
Assembly Bill 2863 aims to block operators that took
bets in the United States after December 31st, 2011, from entering the market,
altering the standard start date for such a clause which has
historically been December 31st, 2006.
The 2006 date was
originally set to reflect the passage of the Unlawful Internet Gambling
Enforcement Act (UIGEA). It has been pushed to 2011, presumably to acknowledge
the year in which the Department of Justice cracked down on iGaming operators
in the US .
Gray’s amended bill
also sets out tax rates based on collective statewide revenue, with companies
earning up to $150m taxed at 8.847 per cent. Those with revenue between $150m
and $250m will pay a 10 per cent tax; revenue of $250m and $350m will be taxed
at 12.5 per cent and companies earning more than $350m will be taxed at 15
Licensing fees for
operators have also been raised from $10m to $12.5m.
The bill was first
introduced in February this year, originally without any ‘bad actor’ language,
and allows federally recognised California Indian tribes and card clubs that
have been active for five years or more to apply for seven year operating
licences. These licensees will be able to operate two skins under one licence,
with liquidity pooling permitted.
While the amendments
are yet to be formally filed, PokerStars’ coalition of partners in California
has hailed Gray’s attempt at a compromise on the bad actor issue, something
that has frequently proved to be a stumbling block for iPoker legislation in
comprising Morongo Band of Mission Indians, San Manuel Band of Mission Indians,
California's three largest card clubs – Commerce Casino, Hawaiian Gardens
Casino and Bicycle Casino – and PokerStars owner Amaya said in a statement: “We
applaud Assemblymember Adam Gray for moving the ball forward on iPoker and
addressing the final two key issues in his bill AB 2863.
“This is a step in the
right direction and we look forward to working with him and bill co-author
Assemblymember Frank Bigelow in the coming weeks to get AB 2863 across the
“Our coalition has
long-supported a competitive online poker marketplace in California that offers
choices and strong consumer protections; rigid suitability standards; strict
oversight of operators and licensees; and provides a financial return to the
state,” it explained.
commends Assemblyman Gray and his leadership both last year and this year to
authorize and regulate online poker. For too long this issue has left consumers
vulnerable and we are hopeful that 2016 brings closure, and a safe, regulated
and competitive marketplace.”
It remains to be seen
whether California’s other tribes can accept the compromise,
with little time remaining for the bill to pass. The state’s legislative
session ends August 31st, but the Assembly does not sit in July due to its
summer recess. Aside from the state Budget Bill, which is subject to a vote on
June 15th, the deadline for new bills to pass into law expired on June 3rd.