In what has become almost an annual event for the past decade, a proposal for the intrastate legalisation on online poker in California has again surfaced in the state Assembly.
The indefatigable Assemblyman Reginald Jones-Sawyer, undeterred by his past failures to achieve success, is again the man behind the new bill AB 1677, the Internet Poker Consumer Protection Act, which is similar to past proposals and proposes a solution to keep the racetracks on-side whilst in effect excluding them from an i-poker market in which they have expressed a strong interest.
That solution is to create the California Horse Racing Internet Poker Account, which in effect buys off the racing industry with the prospect of an annual payment amounting to 95 percent of the first $60 million earned by i-poker operators each fiscal year. Racetrack owners would also be permitted to act as service providers, retaining half the revenues they earn from this activity in partnership with licensed online poker operators.
Assemblyman Jones-Sawyer’s problem, as always, is achieving some sort of consensus from a toxic mix of interested parties that includes online poker operators (notably Pokerstars), card room and racetrack owners and competing tribal gambling interests. In the past this has presented insuperable hurdles and previous measures have repeatedly run out of time.
AB 1677 again proposes that suitable i-poker operators apply for state licensing, with a 7-year licence costing $12.5 million which can be credited toward tax on GGR.
The tax rate would be set at 8.847 percent of GGR where GGR is $150 million or less a year; that goes up to 10 percent of GGR for companies that achieve revenues of $150 million to $250 million.
The sliding scale of taxation continues upward, with operators earning between 250 million and $350 million paying 12.5 percent and those with GGR over 350 million annually paying 15 percent of GGR.