Gatto Pulls AB9 from California Online Poker Hearing

Mike Gatto – the author of California´s first online poker bill this year – has announced that he is withdrawing his proposals due to a lack of consensus.

Next Wednesday – 8^th July – the Californian Assembly Government Organization Committee has a meeting scheduled to hear amongst other things Mike Gatto´s and Reggie Jones-Sawyer´s proposals for online poker in California (respectively AB9 and AB167). Unfortunately there will now be a gap in the schedule as Assemblyman Mike Gatto has announced that he is withdrawing his proposals because there is no consensus on the issue yet.

Gatto´s bill was the first to be introduced into the Californian legislature this year, and was the one which was most favored by tribal gaming communities as it contained a “bad actor” clause and excluded racetracks from providing online poker in California. Early amendments to the bill removed the necessity for players to register in person at a casino for an online poker account, but there has been little movement forward since.

Gatto Postpones Bill Rather than Abandons It

In the press release announcing the withdrawal of AB9 from next week´s “GO” committee hearing, Gatto said that he was cancelling the hearing of his proposals, but not giving up on legislation as his bill has an “urgency clause”, which means it can be resuscitated at any time:

I am canceling next week’s hearing of my Assembly Bill 9.  I believe this is the right thing to do at this point because there is no consensus on the issue yet.  My bill has an “urgency” clause, and thus it can be resuscitated at any time.

Over the past three years, I have met with representatives from nearly every software provider, card room, gaming tribe, racetrack, and internet-poker operator who has an opinion on the subject.  I gave my word to both supporters and opponents of AB 9 that my goal was consensus, and that I would not move forward with anything that achieved less than that.

I will continue working to craft legislation on which the interested parties can agree, and which is good for the people and treasury of the state of California.

It is not yet known whether Reggie Jones-Sawyer will follow suit and pull his proposals from the hearing. Jones-Sawyer´s AB167 contrasted sharply with Mike Gatto´s proposals inasmuch as it allowed bad actors and racetracks to apply for licenses. The proposals were heavily criticized by the Poker Players Alliance for suggesting that poker players should be charged with a felony if they were caught playing at unregulated poker sites.

Could the Tribes Go It Alone?

With the likelihood that there will be no online gambling legislation passed in California this year (or next year or the year after), an interesting alternative proposal has been suggested by Martin Owens – a Californian attorney specializing in gaming law – that the tribal gaming communities could establish their own internet gambling operations under existing laws.

Writing for CalvinAyre.com, Owens – who was retained by the Ilpay Nation of Santa Ysabel tribe prior to the introduction of their online bingo operation – notes that many tribes are now self-regulating after having successfully conducted Class II gaming for a period of three years. Owens suggests that Class II games such as bingo and poker could be offered online by the tribes without state approval.

His reasoning is based on the fact that the existing states that have regulated online gambling (Nevada, New Jersey and Delaware) have stipulated in their legislation that a bet is considered to be placed at the location where the gambling server is situated. If the tribal gaming servers are situated on tribal sovereign territory, Owens argues, then the state has no control over the operation.

Not only would this interpretation of the law enable tribal gaming communities to provide an online poker service to residents of California but, in theory, there would be no restriction on them accepting bets from players situated anywhere in the world.

It is certainly an argument that would receive a higher profile if Sheldon Adelson´s “Restoration of Americas Wire Act” (RAWA) was ever to receive federal approval!