The odds of regulating internet poker in California just got worse as Assemblyman Mike Gatto has essentially given up on his CA online poker bill, AB 9. Mike said in a statement that, due to having found “no consensus” on the issue, he’s removing his measure from the committee hearing scheduled for next week.

Assemblyman Gatto was the first of several politicians in the Golden State to introduce a CA online poker bill in the 2015-16 legislative session. AB 9 hit the table in December of 2014 as one of the first measures presented in the state.

Key Features of Gatto’s CA Online Poker Bill AB 9

Gatto’s proposal provided a framework for authorizing, regulating and licensing online poker operations in California. When AB 9 was first introduced, the Assemblyman noted that his CA online poker bill would give both players and operators “certainty and security that will legitimize the game, support locally-owned businesses, and keep much-needed revenue in the state.”

AB 9 had several distinct parameters set in place to limit the state’s internet poker market to restricted operators. Only licensed tribal casinos and commercial card rooms would be permitted to participate (i.e. no horse racing tracks), and a ‘bad actors’ clause stated that any operator who accepted California players after December 31, 2006 (post-UIGEA) would be prohibited from obtaining a license.

While the horse racing industry and Amaya Gaming (owner of PokerStars & Full Tilt were opposed to AB 9, there were many tribal gaming operators and card rooms who supported Gatto’s CA online poker bill. The most significant among them was the Pechanga Coalition, a 7-tribe strong group of California tribes who are staunchly opposed to competing with PokerStars or the horse racing industry if and when internet poker is authorized.

Gatto says “No Consensus” means ‘No Go’ for AB 9

In a press release issued on his website yesterday, Mike Gatto explained why he’s giving up on his CA online poker bill.

“I am canceling next week’s hearing of my Assembly Bill 9.  I believe this is the right thing to do at this point because there is no consensus on the issue yet,” wrote Assemblyman Gatto.

He did point out, however, that “My bill has an “urgency” clause, and thus it can be resuscitated at any time.”

He went on to speak of the hard work he’s put into internet poker legislation since 2012.

“Over the past three years, I have met with representatives from nearly every software provider, card room, gaming tribe, racetrack, and internet-poker operator who has an opinion on the subject.  I gave my word to both supporters and opponents of AB 9 that my goal was consensus, and that I would not move forward with anything that achieved less than that,” Gatto said.

Although AB 9 is all-but dead at this point, the Assemblyman promised to continue his efforts towards establishing a framework for the authorization of online poker in California. “I will continue working to craft legislation on which the interested parties can agree, and which is good for the people and treasury of the state of California.”

The race is back on in California as the first online poker bill has been introduced to the state government. Proposed by Assemblyman Mike Gatto, this new online poker measure contains some interesting key alterations compared to previous attempts. While the context would greatly benefit land-based casinos and card rooms, horse racing tracks won’t be permitted to participate, and neither will PokerStars.

Starting with the most important text for online poker players in California, we’ll examine the newly revised ‘bad actors’ clause. It reads much like the old one supplied by Assemblyman Reggie Jones-Sawyer, where any operators that accepted Californians since 2007, (thereby breaching the UIGEA of 2006), are prohibited from obtaining a license. However, the amended section also eliminates operators that were acquired by a new parent company after breaching that law.

In reference to bad actors, Gatto’s online poker bill reads:

Hence PokerStars, under the new ownership of Canada-based Amaya Gaming, would be excluded.

Racing tracks won’t make the grade either, according to Gatto’s legislation. The bill says regulators should license “only those entities that are otherwise eligible to offer real-money poker games within the state that have significant experience operating in a regulated land-based gaming facility environment.” Therefore, the state would license “only those entities in California that have experience operating card rooms and tribal gaming facilities that are currently permitted to offer live real-money poker games”.

The bad actors clause and exclusion of racing tracks from participation in a California online poker market have been two of the most debated arguments since the state first began discussing legalization years ago. However, Gatto did say in an interview with PokerNews that he is not opposed to amending the bad actors clause or exclusion of racing facilities.

To get more tribal casinos and card rooms on board, the online poker bill was designed to ensure that all land-based operations are not cannibalized by online poker, including the smaller operators around the state. The bill would require new players to make their first deposit in person at the website’s corresponding casino or an associated ‘satellite service center’ (smaller casino / card room associated with the operator). In addition, deposits and withdrawals that exceed a certain amount must be made in person at a similarly eligible location. Gatto explained that every Californian should be at least within one hour of such a location, and that it would ensure all establishments are still patronized all over the state.

The actual minimum/maximum purchase and withdrawal amounts associated with that section were left blank in the text of the online poker bill. Gatto later said that the amount could range anywhere from $300 to $10,000. He also justified the in-person payment requirements as being added to help eliminate the threat of underage gambling and money laundering.

It should be noted that Assemblyman Reggie Jones-Sawyer is still expected to introduce a revamped version of his previous California online poker bill in the near future. That new bill is supposedly being scripted to allow more operators to participate in the industry, including PokerStars and possibly racing tracks.