Online Gaming in California

California has been trying since 2008 to pass online poker legislation, but the existing stakeholders in the state – the Native American tribes, horse tracks and commercial card rooms – haven't been able to agree on a course of action. That lack of consensus has doomed all proposed legislation to date, and the state has shown no interest in licensing and regulating online casino games.

In 2014, much like in 2013, two bills to regulate and license online poker were introduced. Just like in 2013, neither bill was voted on. The key sticking points in 2014 were the horse tracks and the bad actors clause.

In previous years, the bad actors clause was a provision designed to prevent PokerStars and other online gaming sites that had taken U.S. bets after the Unlawful Internet Gambling Enforcement Act was passed in 2006 from entering the California market. In 2014, the bad actors clause was updated to apply to Amaya Gaming, which had purchased PokerStars.

Some card rooms and tribes want PokerStars to enter the market, but many do not. This is one of the many reasons online poker legislation has failed to gain traction.

The other big impediment to online poker in California is the inability of existing stakeholders to settle on a role, if any, for the horse racing industry. The horse tracks in California want to offer online poker, but most Native American tribes are adamantly opposed to giving the horse tracks any role in the online poker market. As a result, online poker legislation is at a standstill.

The effort to pass online poker legislation gained some momentum again in 2015. On 27 April 2015, the Assembly Governmental Organization Committee (GO) voted unanimously in favor of advancing AB 431, marking the first time an online poker bill received a committee vote in California.

In May 2015, AB 431 was released by the Assembly Appropriations Committee, thereby sending the bill to the Assembly floor. There were supposed to be three hearings on the bill in summer 2015, but the hearings were called off. The legalization of online poker in California in 2015 was officially off the table.

On 19 February 2016, Assemblyman Adam Gray introduced AB 2863 in an effort to regulate online poker.

The bill passed the Assembly Governmental Organization Committee on 27 April 2016, with a 19-0 vote. California's horse racing industry approved of the bill, which stated that the industry would receive up to $60 million per fiscal year from online poker revenue.

The California Assembly Appropriations Committee passed the bill on 22 June 2016, after the addition of several amendments, including a bad actor clause that aimed to exclude operators that accepted California poker players after UIGEA.

Despite momentum, the bill was shelved on 31 August 2016.

AB 1437, introduced in January 2016, was approved by the California Assembly and sent to the Senate, but ultimately faced insurmountable hurdles and failed to progress further. The bill would have regulated sports betting in the state.

In February 2017, the Internet Poker Consumer Protection act was introduced by Assembly member Reginald Jones-Sawyer. The legislation is similar to Assembly member Adam Gray's AB 2863, aiming to build on progress made last year.

In early 2018, California lawmakers indicated for the first time in several years that it was not introducing an online poker bill and would table the issue for the foreseeable future.

In July 2018, a group called Californians for Sports Betting filed a sports betting initiative,but it would not qualify until the 2020 election.

The state constitution prohibits sports betting and would require a voter referendum to make the change.

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