California Online Poker Hearing to Resolve Bad Actor Issue?

California PokerLater this month, California lawmakers will hold an online poker hearing and it’s quite likely that the bad actor issue will be discussed.

Whether that issue will be resolved is another matter. The insider trading allegations lodged against Amaya CEO David Baazov last month have muddied the situation considerably, resurrecting a problem that many had considered almost moot after the state of New Jersey issued PokerStars a transactional waiver to operate in the Garden State.

While PokerStars has merrily jumped to the top of the ring-fenced New Jersey online poker market, its prospects of participating in the same market in California are not as rosy. PokerStars belongs to a coalition that includes a half-dozen California tribes and cardrooms, partners that may now be questioning their alliance with the gaming giant in light of the charges that forced Baazov to take a leave of absence from Amaya.

Hearing Set

The California Assembly Governmental Oversight Committee is set to convene on April 27 to consider Assemblyman Adam Gray’s online poker bill known as the Internet Poker Consumer Protection Act of 2016. The bill was introduced in February and caused quite a stir with its language that calls for the horse racing industry to get a $60 million annual subsidy in return for not operating any poker sites.

The bill, AB 2863, contains no bad actor language designed to keep out operators who remained in the U.S. online poker market after the Bush administration passed the UIGEA in 2006. But that issue is still one that stakeholders who are not part of the PokerStars coalition will almost certainly push for, especially now that parent company Amaya is in a bit of hot water with regard to who may have purchased stock in the company and when.

The website of the Governmental Oversight Committee has yet to list the particulars of the topics to be broached at the hearing on the 27th, but it is difficult to imagine that the legislators will adjourn without the words “bad actor” being mentioned. If ever there was a time for opponents of the PokerStars coalition to speak their mind and cite the need for the inclusion of bad actor language, this hearing is it. However, keep in mind that the insider trading allegations have yet to be proven.

Progress or Regress?

While hopes were high at the start of 2016 for California to make progress and perhaps enact online poker legislation this year, the outlook is not as promising as we near the end of April. In addition to the uncertainty surrounding Amaya/PokerStars, the offer of $60 million to horsemen on an annual basis to stay away is certain to be extremely unpleasant to some of the parties involved.

The subsidy looks too good to be true to some. A guaranteed $60 million without the headaches and risks associated with running poker sites? That’s like finishing first without having to run the race.

We will know more following the hearing on AB 2863. The proposal was seen as progress when first introduced two months ago. But online poker regulation in California may be heading in the opposite direction due to complications associated with stakeholders being unwilling to budge on allowing PokerStars in, as well as the added dilemma of paying racetracks to remain on the rail.

Jacqueline Packett
Jacqueline Packett