PPA on the fence concerning California Online Poker Bill AB 9

On day 1 of the new legislative session in California, Assemblyman Mike Gatto made a bold move, introducing an internet poker bill to state legislators. Officially tagged AB 9, the new California online poker bill seems to be little more than the rehashing of previous attempts, but with a few unique paragraphs added. The Poker Players Alliance (PPA) offered its initial reaction on Thursday, which wasn’t appositive one, but said they need more details before choosing which side of the fence to hop down on.

The key issue for the PPA was a new element that would require online poker players to facilitate certain transactions in person. Once registered, a player would have to make their very first deposit, as well as their first withdrawal, at an authorized land-based facility. Gatto’s California online poker bill also obligates players making a substantial deposit or withdrawal –the actual amount was left blank, although Gatto estimated anywhere from $300 to $10,000 – to make that transaction in person.

AB 9 specifies that licensed casinos would be primary destinations for physical monetary transfers. However, in addition to California casinos and card rooms that hold a license to operate online poker, the measure would sanction smaller casinos around the state to act as “satellite service centers”. Gatto said that, in this manner, every person in California should be no more than 1 hour away from an eligible casino or satellite service center.

According to the Assemblyman, his online poker bill has two major benefits. First, he explained that the deposit/withdrawal requirements would help to boost the land-based gambling industry for both tribal casinos and commercial card rooms, especially supporting smaller, locally owned businesses that may fear cannibalization.

Secondly, the Assemblyman said that facilitating early and sizable transactions in person will help to eliminate underage gambling and money laundering. The Poker Players Alliance was less acquiescent to that second point.

“If [Gatto’s] doing it because he thinks it’s a way to get people into the casino, that’s one thing,” says John Pappas, Director of the PPA. “If he’s doing it because he thinks it’s a way to stop minors from playing or people from fraudulently withdrawing money, he needs to be informed that safeguards already are in place online that not only the Internet poker industry is using but all sorts of e-commerce.”

Pappas wasn’t exactly on board with the idea that Gatto’s online poker bill will increase foot traffic at small casinos and poker rooms either. The PPA believes gambling establishments would have more success if they use online poker to attract new customers that don’t already frequent cards rooms, then use special incentives to bring those new players into the live realm. Smaller casinos and card rooms who join forces with the bigger brands would also be able to increase patronage via similar incentives.

“The problem here,” Pappas explicated, “is that enthusiasts are likely to make that effort, but the average consumer isn’t going to, and I think for the health of the game we need both enthusiasts and the average consumer.” Pappas called the poker industry an “ecosystem”, saying Gatto’s online poker bill, as written, is an “unproven model”.

Furthermore, Pappas questioned the bill’s suitability. “The previous model of people being able to register, deposit, and withdraw all online is proven to work, so why are we creating one more barrier that could perhaps lead to an unsuccessful marketplace?”

Rather than opposing the new California online poker bill right out of the gate, Pappas admitted it’s too soon to take a side. “I think we have to better understand how this would work and get some feedback from the players themselves. From what I’ve understood about how online poker worked successfully in the past, the ability to deposit and withdraw from your computer was paramount.”