Anti-PokerStars bill expected to pass California assembly Monday

Operator could face five-year ban from the state if internet poker bill progresses as predicted

A bill that would ban PokerStars from operating in California for the next five years is expected to pass the state’s Assembly on Monday, according to industry experts.

The online poker bill AB 2863 was amended this week with new ‘bad actor’ language which would penalise PokerStars in an effort to gain support from local gaming tribes and get the bill approved before the legislature adjourns on August 31.

The changes include a five year penalty on companies who accepted or facilitated wagers from American customers after December 31, 2006 (i.e PokerStars) as well as a flat 10% tax rate on gross gaming revenue instead of the previously proposed sliding scale.

The amendment also gets rid of a clause which would have let ‘bad actors’ avoid the five year ban by paying a one-off $20m fine.

“PokerStars will oppose this, preferring no bill to one that restricts them,” California gaming lawyer David Fried told EGR. “But if [bill sponsor] Assemblyman Gray has the support of his Democratic Caucus and some of the Republicans, this bill will pass the Assembly Monday.”

Gray’s own chief of staff told the LA Times the bills “should” secure the two-thirds of the vote necessary to move onto the Senate.

The changes are said to be supported by a powerful coalition of 10 tribes involved in the state’s gaming industry, including the Pechanga Band of Luiseño Indians and Agua Caliente Band of Cahuilla Indians.

A statement from PokerStars and its own tribal allies said the newest version of the bill “arbitrarily and unfairly bans one operator from competing with the supporters of these amendments in the iPoker market indefinitely”.

“These amendments target a single company, Amaya, with provisions that would prevent the company from ever securing a license. It is our understanding amendments were presented to members as imposing a ‘five year penalty box’, when in reality these provisions would effectively create a lifetime ban for Amaya,” the statement said.

Rivals argue that PokerStars was able to build a substantial customer database while active in the US after the online gaming ban in 2006 and before ‘Black Friday’ in 2011 when other operators had left the market.

“The PokerStars brand was at the forefront of the player’s mind which would hand them an advantage when California opens its digital doors,” Brian Mattingley, chairman of 888 Holdings, told EGR prior to yesterday’s news.

“There is definitely a case for first-mover advantage in California and it’s because of that I believe a period whereby PokerStars is absent from the market could neutralize any unfair advantage.”