‘Bad Actor’ Clause Slipped Into California Online Poker Bill: Could Spell End

• Poker Players Alliance objects to so-called "bad actor" clause that would prohibit PokerStars from entering California market
• Approximately half of the parties pushing for legalized online poker in the state are working in conjunction with Stars
• These proposed amendments would restrict competition and leave players dissatisfied, the trade organization claims
• Deadline to submit bill is August 31 or else it gets scratched

Last minute amendments to a bill in California that would legalize online poker in that state has the grassroots organization Poker Players Alliance in a tizzy.

These proposed amendments would restrict competition and leave players dissatisfied, the trade organization claims.

In actuality these so-called “bad actor” clauses would prevent Web poker companies that have previously operated in the "grey" US market from doing business in California.

More specifically, PokerStars would be excluded.

Not only is PokerStars among the biggest backers of the PPA, they are also one of the top players vying for a piece of the California market.  In fact, Stars is working in conjunction with around half of those legal land-based casino operators, mostly Tribal casinos.

A statement released by the PPA this weekend says that, with said amendments inserted, the California bill likely stands zero chance of passing.  

The statement reads in full:

“We are deeply disappointed that Chairman Adam Gray has chosen to play politics at the behest of special interests. The proposed amendments threaten to doom the iPoker legislation for which we and our members have advocated for years. Since the Internet poker debate began in California nearly ten years ago, PPA has been the only consistent voice urging lawmakers to license and regulate Internet poker. During this time, our message remained consistent: protect consumers and promote competition. Unfortunately, some of Chairman Gray’s proposed amendments undermine this principle.

“A last-minute insertion of so-called “bad actor” amendments would, in reality, just be an anti-competitive measure that would single out Amaya/PokerStars and their California tribal and cardroom partners from participating in the regulated marketplace. And, while some are purporting that this is a temporary five-year ban, an examination of the proposed amendments reveal that it is actually a lifetime ban. This raises serious constitutional issues and calls into question whether a bill with this language would ever be enacted, assuming it could even pass over what is sure to be stiff opposition. Most importantly, these amendments threaten to prolong consumers’ wait for regulated online poker in California.

“Also, the purpose of these amendments itself it flawed. Exclusion of Amaya/PokerStars would be detrimental for many reasons. California consumers would be left without one of the most trusted and popular online poker brands in the world. For years, California players have awaited the return of PokerStars and its proven technology. Their presence in markets increases competition, raising the bar for all operators to offer consumer-driven products. This was seen most recently in New Jersey. These amendments, were they to become law, would also mean that the operator with the most experience in protecting online consumers – from blocking underage access and mitigating problem gambling to collusion prevention and anti-money laundering measures – would be permanently forced onto the sidelines. This would be a loss not only for the consumer, but for the entire state of California.

“PPA does not believe anyone should be entitled to a license to operate Internet poker in California. We feel a license to operate is a privilege that must be earned through a vigorous vetting process and that questions of suitability should be left to independent California state gaming regulators. Legislating a “bad actor” provision would strip regulators of that independent role.

“We urge Chairman Gray and other members of the Assembly to pass legislation licensing Internet poker, but without this anti-competitive provision. We want an iPoker market that is strong, safe, open and competitive. That is the best result for California consumers.”

The California legislature has until August 31 to submit bills for the 2016 period, otherwise all bills must be rewritten and the voting process started anew in 2017.

- Ace King, Gambling911.com