A coalition of tribal governments, card rooms and online operators will gather next week in Sacramento in support of Assembly Bill 2863, California’s latest online poker bill, as further hearings begin on whether the nation’s largest state will legalize Internet poker.

Assemblyman Adam Gray, who is the author of AB 2863 and chairman of the Assembly Committee on Governmental Organization, scheduled a committee hearing on the measure for Wednesday.

Steve Stallings, chairman of the California Nations Indian Gaming Association, said there is real optimism among supporters that online poker will be legalized this year.

He attributed their confidence to the work Gray has done settling a number of issues, including addressing the concerns of California’s tribes and racetracks.

“We are closer than we have ever been,” Stallings told GamblingCompliance. “It’s poised to go as long as we can get it out of the Assembly by the end of the month.”

On April 13, the so-called PokerStars coalition sent a letter of support for AB 2863 to Gray, saying the bill would protect consumers and create a regulated industry.

“On behalf of a broad coalition … we write in support of your AB 2863, your bill to protect consumers, create jobs, and strengthen our state’s economy by authorizing and regulating intrastate, Internet poker in California.”

The letter also reminded Gray of the work the coalition has done since 2008 to “vet this policy issue” with legislators and other interested parties.

“Authorizing online poker will be good for millions of consumers and poker players who will benefit from a safe, regulated, commercial gaming environment where they are protected and assured that the games are fair and honest,” the coalition said.

The PokerStars coalition includes its parent company, Amaya, the Morongo Band of Mission Indians, San Manuel Band of Mission Indians, The Gardens Casino, the Commerce Hotel Casino, and The Bicycle Hotel Casino.

The two-page letter heaps praise on Gray for his leadership skills, and his transparency in supporting online poker legislation in the Assembly.

Gray introduced the Internet poker bill in February.

The coalition did express some concern over AB 2863’s proposed restrictions on licensed online poker operators’ use of consumer databases. The coalition said it believes those restrictions “will only serve to stunt the growth of the iPoker market and the revenues available to the state.”

Efforts to pass an online poker bill in California have ebbed and flowed over the last nine years, with Gray hoping a proposed $60m annual revenue stream for racetracks will solve one of the most vexed issues facing legislation.

According to AB 2863, the payment comes from the first $60m of revenue in a given year, with the payment being split between various groups within the horseracing industry in California.

However, recent insider trading allegations brought by Quebec financial regulators against former Amaya CEO David Baazov and other executives might complicate efforts to legalize online poker in California.

The coalition’s letter did not address the insider trading charges and investigation into PokerStars’ parent company Amaya. Both Baazov and Montreal-based Amaya have denied the allegations.

But David Quintana, a lobbyist who represents the Viejas Band of Kumeyaay Indians and the California Tribal Business Alliance, said what Amaya’s problems have done is taken an issue that “is already very complex and political and now added a touch of combustibility.”

“If they thought they would get it passed this year, their road just got much more complex,” Quintana told GamblingCompliance.

“It’s going to be a tough haul with PokerStars. We would have had a bill two years ago, without PokerStars’ hand in this. It’s the PokerStars issue.”

On Thursday, an amended version of Gray’s bill was posted on the California Assembly Committee on Governmental Organization’s website.

Among the four changes to AB 2863 was that the bill no longer requires the approval of the Appropriations Committee, removing one barrier to the bill’s passage.

The other two changes to Gray’s bill dealt with companies allowing players to gamble on a website before being licensed.

“The bill would become operative when criteria are established by statute addressing involvement in Internet betting prior to the state’s authorization of Internet poker pursuant to its provisions,” said new language added to the bill’s Legislative Council’s Digest.

Those opposed to PokerStars participation in California cite the company’s so-called “bad actor” status for formerly serving U.S. residents without permission.

It was not clear if the new language in AB 2863 was added after a meeting with opponents of licensing PokerStars in California.

The U.S. Department of Justice shut down PokerStars in April 2011 charging the company with bank fraud, money laundering and operating an illegal gambling business. PokerStars settled those charges in July 2012 and agreed to forfeit $547m to the U.S., although the company admitted no wrongdoing.

Carlos Valdez, deputy director of public affairs for the California Nations Indian Gaming Association, said tribal leaders recently held a meeting with Gray where the focus was “suitability standards.”

In a statement emailed to GamblingCompliance, Valdez said he was “hopeful that we can come to a consensus on some of the outstanding issues.”

“The biggest issue is on suitability, we are supportive of stringent suitability standards that protect California players but allow the industry to thrive.”


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