California Assemblyman Mike Gatto says he will approach the 2015 online poker debate in his state with an open mind. Gatto was the lawmaker who introduced a new gaming bill on December 2, so he appears to be signalling to other interested lawmakers he is ready to make a deal. Mike Gatto's legislation is referred to as "AB 9".
Mike Gatto's bill has similarities to the legislation proposed by a tribal gaming coalition in the summer of 2014, though his bill also contains several key differences. Marco Valerio conducted a phone interview with the state assemblyman recently. He asked questions on California's chances of having a poker bill signed into law in 2015, along with Gatto's thoughts on the "bad actor" issues which are addressed in his proposed law.
Mike Gatto's Interest in iGaming
When asked how long he's been interested in online gambling, Mike Gatto said, "I've been interested in it since approximately 2001. That was the second year of law school for me...I read some papers by some of the authorities in Internet gaming law: I. Nelson Rose, people like that. It's something I've followed for about 14 years now."
Assemblyman Gatto said he had written iPoker legislation in 2013, but says he was asked by his committee chairman to defer to Assemblyman Reggie Jones-Sawyer, who had similar legislation. Gatto added, "I willfully did not move forward with my bill last session, but I spent this year researching a framework that would make sense, and I came up with some ideas that we thought made really good sense, so I decided to go ahead and introduce a bill this year."
Gatto recounted a long history of failure for California lawmakers who've tried to pass an online gaming bill. He said, "There have been anywhere from two to six proposals every year since 2008. Obviously, the fact that none of them have been signed into law...that weighed into my decision to get involved."
History of California iPoker Bills
Gatto said all legislation involving Internet gambling has two major constituencies to consider: the external one and the internal one (or industry). External considerations involve law enforcement, parents groups, church groups, and others who would have concerns about the ethics of legalization and the problems inherent in enforcing such laws. Gatto said such group are concerned about underage gambling, problem gambling, and money laundering issues.
Many Interested Parties
He pointed out that religious groups in particular want their ideas considered when enacting new laws, so he kept their thoughts in mind when writing his bill. They tend to have concerns with gambling in general, so a good law considers concerns external to the industry.
Gatto said the second major force in such legislation are the interested parties--that is, those insider group who have a personal stake in the legislation. In this case, Assemblyman Gatto was talking about the dozens of tribal gaming casino operators and the smaller number of private casino interests in California. Besides Nevada, California has the largest casino gambling infrastructure in the United States. These many groups need to be consulted and considered.
Complicated Legal Situation
For that reason, California presents a particularly complicated path to the passage of an iPoker law. One might think have an large native land-based gaming industry might clear the way for online gambling, but that isn't always the case. As followers of the US online gambling laws are aware in the past year or so, land-based gaming interests are often the most hostile to online gambling. The case of Sheldon Adelson, chairman of the Las Vegas Sands, is a perfect example. Such executives often find new parties to the gaming industry to be rivals.
In California's case, many of the Native American tribes of the state are pushing for a "bad actor" law that would ban PokerStars from California iPoker. PokerStars is the biggest real money online poker site in the world, but it has a history of trouble with the U.S. federal government. From the passage of the UIGEA law in 2006 until the Black Friday investigation was announced in 2010, PokerStars accepted US players. Many consider them a bad actor, for that and other alleged crimes. Though PokerStars paid $700 million-plus to clear their corporate charges, is under new management, and has no association with the executives accused of wrongdoing, many think they should not be allowed to profit off of California's Internet poker industry.
Interstate Poker Compact
At the same time, other US states are likely to have licensed PokerStars sites. These states might join a interstate poker compact, which could boost the size of a site's poker community and increase its tournament jackpots to world-class status. Under such circumstances, a state wanting to have the best iPoker community probably wants to leave enough room for PokerStars. One tribal casino already has a deal with PokerStars, if they are ever allowed in the state. California's lawmakers have had trouble reconciling all the conflicting interests in the case, which is why they couldn't pass a bill in 2014.
Online Poker Laws in 2015
Now, Mike Gatto believes he has a bill that can reconcile those differences. His bad actor clauses are not as rigid as the previous bills' wording made it, so he thinks he can bridge the gap between the sides.
He also thinks his bill will create momentum, by making iPoker more of a practical reality to those involved in the negotiations. Assemblyman Gatto told Valeria, "I think addressing the external concerns will create momentum, which in turn will make things feel more real for the internal players, and that ought to make them come to the table with more seriousness about arriving at some sort of agreement."
