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California’s Online Poker Bill Dies Without a Vote to End 2016 Legislative Session

In a year defined by progress, 2016 will conclude without California finding a way to pass online poker legislation.

On August 31st the state’s legislative session came to a close for the year, but without anywhere near the required two-thirds of State Assembly members aligned in support, Assembly Bill 2863 wasn’t even subjected to a vote.

The latest failure marks a full decade of futile efforts, after California lawmakers were unable to bring opposing factions together and strike the bargain needed to secure passage of Assemblyman Adam Gray’s bill.

The particular political gulf which couldn’t be bridged concerned the bitter divide between a coalition of local Native American tribes and worldwide online poker titan PokerStars.

The tribal coalition, led together by the Pechanga Band of Luiseno Indians and the Agua Caliente Band of Cahuilla Indians, represents a hardline element within California’s broader network of tribes which opposes the re-entrance of PokerStars within any newly formed statewide online poker marketplace. Native American tribes in general represent a powerful lobbying entity in California’s political arena, operating over 60 brick and mortar casinos which collectively form a $7 billion market.

At the heart of this coalition’s refusal to readmit PokerStars is the company’s conduct following the federal government’s passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2016.

For maintaining a presence within the United States between 2006 and 2011 – willingly serving American players in spite of the law, including customers in California – PokerStars has been labelled as a “bad actor.” Specifically, the bad actor charge claims that PokerStars now holds an unfair competitive advantage over online poker companies which willingly withdrew from the U.S. market after UIGEA’s passage.

Throughout the last few months both sides have butted heads. PokerStars agreed in principle to pay a flat $20 million penalty fee for bad actor violations, and to avoid an extended exclusionary period, while the hardline tribes countered by insisting on a $60 million fine and a five-year ban.

PokerStars refused this proverbial line in the sand, and along with its own tribal coalition including the Morongo Band of Mission Indians and the San Manuel Band of Mission Indians, called for lawmakers to reject AB-2863 as currently constructed.

As a result, the necessary two-thirds level of approval in the State Assembly never materialized, and AB-2863 was left to die without a vote.

Accordingly, John Pappas – director of the Poker Players Alliance (PPA) – was hesitant to express any optimism as to the chances of AB-2863, or any online poker bill in California for that matter, securing passage in 2017 and beyond:

“I think Assemblyman Gray deserves a lot of credit for carrying this issue as far as he did. Ultimately, he was trying to get a bill passed and he ran into two very dug-in factions that weren’t going to give ground. I’m hoping that this whole episode hasn’t soured him on supporting good policy in the future. I think everyone will retreat, lick their wounds and see what makes sense for 2017.

Hopefully the opposing sides can really sit down and hash out the issues to come up with some sort of agreement. Until that happens, I don’t see this happening in California, and from a consumer standpoint that’s the biggest disappointment.”

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