California Racetracks Offered $60m in Annual Payments in New iPoker Legislation Amendment

CaliforniaAssemblyman Adam Gray of California introduced AB 431 some time ago to try and see online poker approved and regulated within the state. In January, Gray filed an amendment to the measure that would provide the racetracks of the state with $60m in payments annually in exchange for the racetracks to give up the option to being active in participating in the online poker gaming industry of California.

The subject of the racetracks involvement in the online poker industry of the state has long been a point of contention. The tracks want to be involved while tribal interests feel that the racetracks do not belong in the industry.

With the changes to AB 431, the bill now moves from being a shell bill to one that has specifics. A tax rate would be set at 15% for licensing to offer online poker in the state, with licensing limited to tribal casinos and the card rooms of the state. $15m would have to be paid in deposits and then future tax payments would be deducted from this amount. As many as two poker sites could be operated by each license holder.

The plan then provides the tracks of California with $60m of the state’s annual online poker revenues, 95% of that money going towards the racing purses as well as the retirement plans for the pari-mutuel employees. The remaining 5% would be used for state agricultural fairs.

Late last week, Gray held a meeting with tribal leaders of the state to try and gain support for his plan for online poker gaming. The Indian tribes have been strongly opposed to the tracks being involved in online poker as they state that the racetracks have never offered poker before and allowing them to do so now would be in violation of the exclusive rights listed in the gaming compacts between the tribes and state.

The tracks have not responded as of yet on how they feel about the amendment to Gray’s bill. It will be interesting to see if the tracks are okay with the payment or if they want to be able to offer full gaming as well alongside the card rooms and casinos of the state.


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