Unless you’ve been under a rock, you know that California is broke. The budget deficit for next year is projected at somewhere between $25 and $30 billion. That has caused legislators in the Bronze Golden State to look at online poker as a revenue source.
Back in 2006, Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA). The UIGEA made it illegal to accept bets from illegal Internet gambling operators. But the law didn’t criminalize any gambling; rather, the law looks to state laws to see if the gambling activity is legal or illegal. Online poker sites exist, but the operators are overseas. The two largest sites, PokerStars and Full Tilt Poker, operate in European tax havens.
California legislators have looked at the amount of money being bet, and decided they’d like to get their hands on it. Is it to help make better poker sites for the players? Of course not; it’s a simple revenue grab. The state needs money, and for Democratic legislators who want to increase the size of state government (or keep it as large as it is today), revenue is needed (California voters haven’t approved a statewide tax increase in some time and aren’t likely to in the near future). This is an easy way to get money, right?
The problem for the legislators proposing this is that everyone wants a piece of the pie. Indian tribes (who control most gambling in California) want a piece, the legal cardrooms in California (i.e. Commerce Casino, Bicycle Casino, etc.) want their piece, and the Indian tribes that don’t have gambling want their piece. As for the players, well, if you expect anything player-friendly out of the California legislature, you’re betting with a pair of sevens into a full house. If anything passes in Sacramento it’s almost certain that the existing sites will be made illegal (under California law).
This news story gives an accurate flavor of what’s happening in Sacramento. As for what’s next, probably more bickering and dithering. After all, that’s one thing the California legislature is good at.