California racetracks offered $60m sweetener in online poker battle
Amendments to bill AB 431 offers best chance yet of regulatory progress in the Golden StateÂ
California racetracks could be offered a $60m sweetener in return for stepping down as eligible online poker licensees, potentially removing one of the last major barriers to a regulated online poker market. [private]
The role of the racetracks has held back regulatory progress of late, but under the latest version of bill AB 431 they would be offered up to $60m per year in funding if they exclude themselves from the online poker industry.
But there is no guarantee the racing sector would receive the full $60m each year; the bill states they would receive 95% of the first $60m in taxes collected from licensed online poker operators.
The annual income would be split into three funds; 95.4% to the purses, 2.3% to the retirement fund for California jockeys, and another 2.3% for the pensions of general racing employees.
AB 431 was previously a skeleton bill with little detail, but the latest amendments have put flesh on the bones and reveal taxes would be set at 15% of GGR.
That, however, means online poker would have to generate at least $400m each year for the tracks to receive the full $60m – in New Jersey, online poker generated just $23.8m in 2015, down 18% on the previous year.
A $15m deposit would be required to obtain a license â which would go towards the 15% monthly tax â and only tribes and cardrooms with at least five years gaming experience would be eligible.
Each licensee would be allowed to operate two branded skins and there is no bad actor clause, appearing to pave the way for PokerStars and Full Tilt to enter the fray.
Gaming regulators would have 270 days from the billâs passage into law in which to draft regulations, meaning the market could in theory go live by the end of the year.
Prior to the latest amendments AB 431 Â made âhistoricâ progress through the legislature, becoming the first online poker bill to be voted on a pass out of Commitee.
The state has made  rapid progress with daily fantasy sports legislation, but last week the Morongo and San Manuel tribes threw a spanner in the works by openly opposing the bill in its current form.
Both tribes raised concerns of legalizing the sector, and called for the bill to be amended so that it includes online poker.