The California legislature continues debate on legalizing online poker and the regulations controlling the game.Two major issues appear to be delaying their decision.
- Insertion of a bad actors clause in the regulations and
- Whether to allow horse racing tracks to participate.
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Bad Actors Language
Since it has been used with more frequency as more states consider licensing and regulating online poker rooms, you may be familiar with the term “bad actors” clauses. If your state has yet to debate the merits and/or downsides of permitting online poker, you may not be sure how it applies to Internet poker room legislation.
A “bad actor” is any online gaming organization that continued to do business after passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006. Inserting a bad actor clause in its legislation is the option of each state. However, there are significant differences in the bad actor language that may reside in the regulations.
New Jersey initially included the clause in their original legislation, but removed it before they implemented the law. Therefore, any online poker operator can apply for a license in New Jersey. Conversely, Nevada has a strong bad actor clause, preventing any operator who did business after UIGEA from applying for a license for 10 years. In Nevada, this prevents online gaming icons like PokerStars and Full Tilt from even applying to operate for a decade. Delaware, like New Jersey, chose not to include a bad actor clause, allowing any legitimate operator to apply for a license.
Horse Racing Tracks
While it’s assumed that the California legislature can come to some agreement and compromise about a bad actor clause, the lawmakers now have a more stringent position regarding race tracks. They state that “horse racing tracks can’t be a part of the market whatsoever.” This position leaves little room for agreement and compromise.
The 13 native tribes supporting online poker legislation are lobbying strongly for a bad actor clause as part of the legislation. These unified tribes also have requested the exclusion of race tracks as licensees. Both positions reflect a natural fear of competition.
However, one tribe and three card clubs (that are partnering with PokerStars) have stated that are not opposed to having horse racing tracks participate in the legislation. Currently, however, both the state assembly and senate bills include language prohibiting race tracks, at the insistence of the unified 13 native tribes.
The race tracks believe they still have some powerful allies in both houses of the California legislature, while stating that it is “wholly unacceptable to have a bill that excluded them.” The tribes, however, make it very clear that it’s equally totally unacceptable to their side to have the race tracks included in the pending legislation.
These diametrically opposing positions may lead to shelving both current bills, which would effectively eliminate any legislative action for this year at least. This potential result will help neither of the opponents, nor any California residents hoping to play online poker. In fact, while the parties seem amenable to compromising on the bad actor language, the tribe and race track representatives indicate no such conciliatory attitude on the horse racing track inclusion/exclusion issue.