California Takes Different Tack for Online Poker Regulation

For the second time in as many sessions, State Senator Lou Correa (D-Santa Ana) has introduced a measure to authorize intrastate online poker in California.

The bill, designated SB-678, would enact the Authorization and Regulation of Internet Poker and Consumer Protection Act of 2013. The text of the act is just 77 words long and provides that internet poker sites “may be operated within the borders of the state”, subject to a licensure and operational regulatory framework to be established by the California Gambling Control Commission.

Correa has been a vocal proponent of online poker in the Golden State. He first introduced a California online poker bill in July 2011. At the time he noted that 2 million Californians played online poker weekly and claimed that the bill would generate 1,300 new jobs and $1.4 billion in state revenue. The bill was amended several times in committee but never made it to a full floor vote.

Correa has changed tactics with SB-678 by postponing the development of intrastate online poker’s regulatory framework to a later date. His 2011 bill spelled out in some detail exactly how intrastate poker would work in California, inviting dissent from powerful, competing California poker interests: tribal casinos; state-sanctioned poker rooms; brick-and-mortar casino groups; and existing overseas online operators. This time around, he has kicked the can down the road by requiring the California Gambling Control Commission to spell out those regulations.

While Correa’s tactic invariably would delay the deal of the first hands of regulated online poker in California, it may improve the bill’s upfront chances for passage. With no regulatory questions to quibble over, lawmakers will be confronted with a simple choice of either favoring or opposing the regulation of online poker in California.

As prospects for a federal online poker bill dim by the day, industry advocates have set their sights on California as the most likely of the large-population states to authorize online poker. They argue that the player liquidity provided by California’s sizable pool of online poker players is necessary to make online poker viable at the state level. Some also believe that the entry of a large-population state like California into the online poker regulatory market will create a domino effect in other states across the country.

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