California Gambling & Poker Laws

California Online Gambling & Poker Laws
Legal California Gambling Laws

To many players, California - not Nevada - is the center of the poker universe.  The state has earned that reputation thanks largely to the card clubs that host high-stakes cash and tournament action year round.  When it comes to online poker, and gambling in general, players are likely to have a number of questions and concerns.  That's why we've assembled this guide to online poker in California that encompasses legal issues, history and the very latest regarding poker news from The Golden State.

Update as of 2016

This section is an updated version of the original article. While the the information on this page is correct, some new legislation might be in effect since thie page was originally written. We've left the orginal article in tact below the new information.

California Online Poker Legislation

California's path to legalized online gambling has been full of disappointments. Assemblyman Mike Gatto once claimed that California's legislature has seen 2 to 6 online gambling bills every year since 2008, with none of them being remotely successful. We pick up the story of that legislation in 2013, the year of our last update.

What Are "Bad Actors"?

Tribal gaming interests have fought over "bad actor" clauses in any online poker legislation. A "bad actor" is described in California's political terms as an online gambling operator who continued to accept real money play from Americans after the Unlawful Internet Gambling Enforcement Act (UIGEA) went into effect on December 31, 2006.

From 2007 to 2011, PokerStars continued to accept poker players from the United States. This continued until Black Friday (April 15, 2011), when the U.S. Justice Department seized the domains of PokerStars, Full Tilt Poker, and several other online poker sites. Indictments for 13 gaming executives were unsealed on the same day.

Eventually, PokerStars settled with the United States federal government by paying a $700 million+ fine. PokerStars executives remained indicted. Many believe those indictments were a major reason the owners of Rational Group sold PokerStars and Full Tilt Poker (which, by 2014, was owned by Rational Group). Amaya Gaming bought PokerStars for $4.9 billion and has since attempted to get the world's biggest poker site legalized in all US states which have regulated online gambling: Nevada, New Jersey, and Delaware. Delaware and Nevada barred PokerStars, due to bad actor clauses in their iGaming statutes.

Several states have discussed bad actor legislation, including Pennsylvania and California. California is the biggest prize in the online poker market in America. Tribes like The Agua Caliente Band of Cahuilla Indians and the Pechanga Band of Luiseno Indians have opposed PokerStars' inclusion in legal online poker. The Agua Caliente and Pechanga bands have led a coalition of tribal gaming interests in blocking PokerStars and insisting on bad actor clauses.

Meanwhile, the Morongo Band of Mission Indians and the San Manuel Band of Mission Indians lead a smaller coalition of tribes who want PokerStars included, as a key in having a succesful and profitable iPoker industry. The two bands signed a partnership with PokerStars. If ever online poker was legalized in California, PokerStars would support the Morongo and San Manuel bands' online poker sites -- a huge advantage for those tribes.

It is this split which is at the heart of California's inability to pass online poker legislation. As readers will see, California's representatives have launched repeated efforts to legalize online poker. It never seems to work, because neither faction can surmount the two-thirds barrier to passage of such legislation.

Failed Online Poker Legislation in California

To update our news from 2012-13, the Pechanga Bill did not gain traction in the legislature. Bad actor clauses which would have barred PokerStars from entering the California online poker market proved controversial, so the two-thirds approval needed was impossible.

Roderick Wright's bill was not able to pass in the California Senate. Sen. Wright might have supported an online poker bill in 2014, but he had to resign from office in that year, due to convictions on felony perjury and voting fraud charges. The resignation of several Democrats in 2014 cost the party its supermajority, and thus the best chances of passing an iGaming law. A strict party vote no longer can pass a law in California, making a complicated process even more complicated.

California Senator Lou Correa introduced SB 678 in 2013. Once again, this legislation proved to be insufficient to receive passage in the State Senate. Lou Correa's bill was described as a placeholder bill, so it might never have been a serious proposal. At the time that Correa's initiative failed, the Press-Enterprise newspaper ran an editorial which complained about the lobbying by Native American gaming interests in the state. The Press-Enterprise warned voters that "neither legislators nor average Californians should mistake Internet gambling for a public interest concern; the real issue is jockeying over private profits."

California Assemblyman Reggie Jones-Sawyer introduced an iPoker bill in mid-2013, but that bill languished in committee and never received a vote. In December 2014, Assemblyman Mike Gatto introduced AB 9, a bill which would have approved online poker. Assemblyman Gatto said he had fashioned a bill in 2013, but chose not to introduce it when Reggie Jones-Sawyer's bill was introduced.

Instead, Mike Gatto offered a bill which softened the bad actor clauses of previous bills. The bill banned "bad actors", but opened a pathway to licensing for PokerStars if its (at the time) new owner, Amaya Gaming Inc., could prove the company had moved on from the principles which caused it to break US law. When they heard of Gatto's proposed new law, the Morongo Band, San Manuel Band, and Amaya Gaming released a joint statement which said, "Unfortunately, AB 9 is a rehash of previously unsuccessful proposals." Mike Gatto's bill suffered a predictable fate in 2015, as it languished in committee.

Latest Bill: AB 2863

As of 2016, the latest online poker legislation is named Assembly Bill 2863. AB 2863 passed through the Assembly Appropriations Committee in late June 2016. The bill now goes before the California State Assembly. If the measure passes, it would go to the California Senate. If AB 2863 passed in the State Senate, then it would go to Gov. Jerry Brown for signing.

AB 2863 changes the equation on the PokerStars bad actor clause. Bad actors would be barred from licensing for 5 years, but they would have one "out" clause. If the bad actor paid a one-time $20 million fee, they would be allowed to enter the California online poker market immediately. Thus, if the new bill passes, PokerStars would be able to enter the California gaming market, if it pays an additional $20 million into the General Fund.

Proposition 48

Online poker legislation has not been the only gambling laws discussed in California these past years. When Station Casinos and the North Fork Rancheria of Mono Indians backed Proposition 48, it led to significant intrigue between rival tribal gaming interests.

The Table Mountain Rancheria Indians spent over $10 million to convince voters to vote down Proposition 48. The Pechanga Band of Luiseno Indians launched a controversial ad that the North Fork Rancheria Indians said was deceptive. The ad suggested that voters had voted overwhelmingly to limit gaming to 2004 venues, but Station Casinos was using an obscure tribe to push gaming in California. Proposition 48, also known as AB 277, was defeated at the ballot box.

The Basics of Playing Online Poker in California

You don't need to know much about California to know that poker is massively popular in the state.  Whether it's the constant action at the state's card rooms, the regular presence of California-based players on poker's world stage or the steady stream of online poker news coming from the state, everything points to one conclusion: Californians are playing online poker in numbers that far outstrip any other state in the US (and probably quite a few countries as well).

California's Top Legal Online Poker Sites

Like most gamblers, poker players want to know that they're playing at a reputable site which will offer a fair game.  We suggest only sites that are properly licensed and regulated in their jurisdiction, ensuring that Californians play only at legal poker rooms online.  The best of those legal poker choices for California players:

Can California Poker Players Sign up at Online Poker Sites?

Absolutely.  You may have heard in the news that a few states - such as New York and Maryland - are being denied access to the major US online poker rooms, but there are not any similar issues with players from California.  All of the major legal US poker sites covered on our site are open to poker players from California, meaning that it's about as easy as it gets for Californians to play online poker for real money.

Online Poker: Is it Legal in California?

Our research has identified a number of issues that online poker players might want to consider before playing poker for real money online while in the state.  Note that we are not lawyers and therefore are not qualified to offer legal advice; instead, we are merely offering an informational reference highlighting certain parts of California law that could be germane to online poker players.

When reviewing the California code, here are some parts to pay extra attention to if you are an online poker player:

  1. Playing "any banking or percentage game played with cards, dice, or any device, for money, checks, credit, or other representative of value" (Section 330) qualifies as illegal gambling and is a misdemeanor.  According to gambling law expert I. Nelson Rose [1], a game of poker where the rake is based on a percentage of the pot falls under this definition thanks to what he calls "bad case law".
  2. Games where a fixed rate is raked appear to be outside the scope of California's anti-gambling laws, although other laws - such as the law that requires all gambling operators to be licensed (Section 19850) - could still render the game illegal.
  3. Encouraging others to play online poker (assuming the game in question is considered illegal) could itself potentially qualify as a crime (Section 318).
  4. California gambling law is influenced not only by law at the state level, but also at the local level. This means that legal attitudes toward gambling can vary from town to town and city to city in California.
  5. No aspect of California law directly mentions online poker or criminalizes the specific act of placing a bet online.

You should review the law for yourself before reaching any conclusion regarding what is and isn't legal.  This is especially true when it comes to gambling, which is often a tricky area of the law that can require assistance to successfully navigate.  You can explore the California state code here [2], and we suggest the California Bar Association [3] as a starting point for acquiring professional legal insight into the issue of online poker's legality in California.

Will California Regulate Online Poker?

Yes, but the real question is when California will regulate online poker.  The state is universally considered to be the most promising market for online poker, and the amount of money at stake almost ensures that regulation will take place at some point.

So what's hindering the process of bringing regulated online poker to California?  In a nutshell, the state has several competing players that have been unable to reach an agreement on how to structure online poker in such a way that all stakeholders share equally in the risk and the reward.

Unfortunately for online poker players in California, there's no clear path to agreement among all of the various groups (tribes, card clubs, horse racing interests, government, social groups, etc), so it will likely take the growth of an online poker industry in some other state to shock California into action and result in the state finally offering regulated, legal online poker to its residents. Senator Wright has introduced Bill SB 51, however its still on the table. Another bill introduced is the Pechanga Online Poker Bill, put together by eight California tribes, including Pechanga.

California Gambling Facts

History of Gambling in California

When prospectors found gold in California, it wasn't only the mining industry that boomed.  Gambling quickly became a massive part of the state's commerce, as unregulated outlets and licensed gambling halls jockeyed for the public's gambling dollar.  That boom receded as gambling's reputation declined across the US, but betting and wagering never vacated the state entirely.  State-overseen horse racing debuted in 1933, which marked the start of a slow but steady expansion of state-sanctioned gambling in California.

Regulated Gambling Options in California

You can take your pick between horse racing, a state lottery and Vegas-style tribal casinos within California's borders.  The lottery was enacted in 1984, and changes to the state law allows tribes to offer Class 3 gambling in the late 1990s.  California residents and visitors to the state can also play a variety of games at one of the state's dozens of licensed card clubs.

Does California Offer any Regulated Online Gambling?

Yes.  You can use the Internet to wager on horse races in California.  When it comes to other games, such as online poker, California has yet to introduce measures that allow casinos or other operators to provide licensed and regulated options to customers.

Recent California Gambling Headlines

California's appearance in gambling headlines is generally a result of some new delay or disagreement regarding the state's efforts to regulate online poker.  The state has been going back and forth on the issue for nearly five years now, and recent attempts to rally support for a revised approach also fell flat [4].

California Gambling Resources

Commerce Casino [5]. Considered by many to be the largest live poker room in the world, the Commerce Casino is a must-visit for any serious poker player.  Cash games run non-stop year round, and major tournament events are a regularly scheduled feature.

Gambling Law US [6].  This site provides in-depth information regarding gambling and state law, including an excellent article on the legality of online poker in California.

California Gambling Commission [7].  The central resource for state-sanctioned gambling information in California, the CGC website provides detailed facts and figures regarding all forms of regulated gambling in the state.

California's Place in Poker History

With so many poker players in the state, it's not a shock that the annual California State Poker Championship is such a major tournament event.  A number of celebrity poker players call California home, as do poker pros such as Annie Duke.  California was guaranteed a permanent spot in poker's record books in 2012, when Antonio Esfandiari (who was born in Iran but grew up in California) won poker's biggest tournament prize of all time - $18,346,673 - in the Big One for One Drop.

Sources & Citations For This Article on California Online Poker