Proposed Amendments Made for California Online Poker Bill

CaliforniaAB 2863 is an online poker bill sponsored by Assemblyman Adam Gray that would see online poker gaming begin within the state of California. Earlier their week, David Fried, a gaming attorney of the state, released proposed amendments for the bill which would open the market to PokerStars, as the company would be considered suitable for offering operations, as well as citing additional information.

The amendments to the measure are reportedly not official as of yet but wording has been added to the bill that would take out the unknowns, including licensing fees, tax rates and who fits in the ‘bad actor’ category.

The most notable amendment to the measure does concern the ‘bad actor’ language. A new unsuitability standard has been proposed for operators who will be able to take part in offering services. In the new language, the measure would place a date of December 31st 2011 instead of the same date but in 2006. The 2006 date is put in place in online gaming bills to coincide with the passage of the Unlawful Internet Gambling Enforcement Act.

With the change, the online poker bill would fit in line with the changes made by the Department of Justice in the US in regards to the Wire Act. This would allow companies such as PokerStars to take part as the company exited the United States online gaming market after the Black Friday indictments of April 2011, despite continuing to operate after the passage of the UIGEA in 2006.

With the amendments, it states that operaters who do not clear the new date can still qualify if they are able to prove that individuals who were key to ignoring the cutoff are no longer affiliated with the company.

Also included in the amendments is a licensing fee of $12.5 million which is higher than the $10 million listed in previous drafts of the measure. The new fee amount is not credited against future tax payments. Tax rates will be based on the size of the online poker market. A rate of 8.847% will be set if the annual gross gaming revenues for licensed operators is less than $150 million. The percentage will increase to 10% if the revenue comes in at $150 million to $250 million annually. Additional percentage increases will take place at higher revenue amounts including 12.5% with $250 million to $350 million with 15% set for amounts exceeding $350 million.

Also included in the amendments is a shortened time frame for land based casinos to be in operation. Casinos and cardrooms of California only need to be in operation for three years to qualify for online poker operation.


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