California Online Gambling Hearing Set for Wednesday

California PokerThis coming Wednesday, California´s Governmental Organization Committee will hold a meeting to discuss online sports betting, DFS and online poker.

After a massively disappointing year for advocates of regulated online gambling, 2016 looks set to get off to an interesting start with a meeting of California´s Governmental Organization (“GO”) committee on Wednesday January 6.

On the agenda is the California Interactive Sports Wagering Consumer Protection Act (AB 1441), the Internet Fantasy Sports Game Protection Act (AB 1437) and the Internet Poker Consumer Protection Act (AB 167).

Little information has been released about the witnesses that will be addressing the committee or whether any of the proposals will go to a vote, and it is widely expected that the hearing will only be “informative” in nature to bring committee members up to speed on recent developments.

Online Sports Betting in California

Chairman of the GO Committee – Adam Gray – introduced proposals for the regulation of online sports betting back in September. His bill allows for licensed operators to offer online betting on sports and expands on the terms and conditions (but not the licensing fees) that online sports betting providers will have to operate under.

The success of the bill is largely out of Gray´s hands. The federal Professional and Amateur Sports Protection Act (PASPA) prohibits sports betting of any description outside of four states that were exempted in 1992 when the Act was first enacted. Gray would also need a change to the state´s constitution for his proposals to become law.

Daily Fantasy Sports in California

The situation regarding Daily Fantasy Sports in California is much different, as Internet Fantasy Sports betting already exists due to a carve-out in the Unlawful Internet Gaming Enforcement Act (UIGEA). The reason that a bill has been introduced to regulate the activity is that lawmakers are concerned about the lack of protection for players and also consider that DFS could provide a healthy revenue stream for state coffers.

GO committee member Marc Levine has already asked attorney general Kamala Harris for an opinion on whether DFS is illegal in California (he claims that it is illegal), but the AG´s opinion is unlikely to be released prior to Wednesday´s committee hearing – which kind of makes the hearing of the bill immaterial. Also expect some input from tribal leaders on this subject, as they expect to be included in any future DFS legislation.

Online Poker in California

Interestingly, the Bill to be discussed at Wednesday´s hearing is not Adam Gray´s “shell” bill AB 431, but Reggie Jones-Sawyer´s [geolink href=””]AB 167[/geolink]. Jones-Sawyer´s proposals for online poker in California never made it to a committee hearing last year – the GO committee favoring Gray´s watered-down and ambiguous proposals – and are likely to be vehemently opposed by the Indian tribes due to its lack of a bad actor clause and the inclusion of racetracks.

These are the two primary objections that stalled the progress on online poker legislation in 2015 and, unless significant headway has been made with bringing the tribes on board with the proposals, AB 167 is likely to go no further than the committee stage. This is despite the legislation of online poker in California now being described in the GO committee agenda as an “urgent measure”.

The Prospects for Advancement

With online sports betting proposals needing an amendment to federal law and a constitutional vote, and the regulation of Daily Fantasy Sports subject to an opinion from AG Kamala Harris, there is little prospect of either of these two bills moving on from the committee stage at this point. Opinion is divided about the prospects for the regulation of online poker in California in 2016, with industry observers holding opposing views.

The once optimistic Steve Ruddock (OnlinePokerReport) now considers the prospects for online poker in California a “quagmire”, while James Guill (OnlinePokerNY) has had a prop bet with Jennifer Newell (PokerUpdate) that there will be no regulation of online poker in California in 2016 – a view that I agreed with last week in my article about “[geolink href=””]California´s Confusing Online Poker Landscape[/geolink]”.

PocketFive´s founder Adam Small summed up the mood of most industry observers when he tweeted:

Maybe there will be a surprise come out of Wednesday´s GO committee hearing, but – as in previous years – don´t hold your breath!

Jacqueline Packett
Jacqueline Packett