No sure who you are wol, but thanks for the updates, how is this different from the sb51 bill?
Ty in advance I'm a legislation noob.

No text available yet for this bill, but Correa is the same guy who introduce Senate bill 40 in 2011 - a Tribal backed bill.

Nice, must be a good sign that the California tribes like this guy. Lets just hope that we don't get disappointed again.

The posted text for SB 678:

http://www.leginfo.ca.gov/pub/13-14/...introduced.pdf

Which is, as Wol said, just a placeholder at this time. You can subscribe for email notifications of updates to the bill here:
http://www.legislature.ca.gov/cgi-bi...&nro=678&act=1

first off, i'm not sure how the nevada legislation isn't a bigger deal than it is right now on this site, secondly shouldn't all outreach to california officials (on our end) be persuading them to work with nevada instead of turning california into a tribe-run island?

i can't possibly imagine it's in our best interest to have SB678 pass, even not knowing what exactly is in it

really? I disagree.

Aside from the last minute addition of a five year penalty box for PokerStars, the Nevada amendment was fully expected to come this month ever since the Governor called for it last summer, so it wasn't news.

If there was any chance of California (or any other State) actually agreeing to the type of compact NV is proposing, it might be something to get excited about, but no State (especially California, the motherland of 'consumer protection') is going to turn it's regulation over to Nevada.

It's a particularly absurd notion in California because of the Tribal stakeholder influence and the fact that NV is right on it's border - a State with no income taxes, meaning that not only would CA be giving up sovereignty over regulation, the revenue for regulation, the jobs and site revenues, they would also likely see an exodus of winning players relocating across the border to save on income taxes.

The type of compacting NV is proposing is fatally flawed for the same reasons the Reid/Kyl bill's only chance was that no one ever got a chance to read it, but unlike an amendment to a must pass Federal bill, there is no opportunity to 'slip' an interstate compact through the CA legislature.

Suggesting that compacting would be better for players than whatever is in SB678 is like arguing that a winning powerball ticket is more valuable than whatever is in brief case #3 on 'deal or no deal'.

The problem is that NV isn't offering CA players a winning ticket, the odds of the compacting ticket winning are as remote as the powerball, and like brief case #3, SB678 has realistic chance of containing something better than the current offer - Merge, Revolution, etc.

I can see some scenarios where CA might opt to compact with NV:

1. Only CA cardrooms and tribes (or consortiums of them) could be licensed by NV as an Operator of Interactive Gaming within CA.

2. These licensees could subcontract any company licensed by NV as (or apply for their own license as):
Service Provider License
Manufacturer of Interactive Gaming Systems License
Manufacturer of Equipment Associated with Interactive Gaming License

3. Players in CA & NV could sign up and play on both CA & NV sites.

4. CA and NV sites can pool their players.

5. CA sites would pay the NV license fees.

6. Both CA and NV sites would pay a $10M advance deposit to CA against future revenue taxes in order to accept players from CA.

7. CA sites would pay 13% tax on any revenue generated from players in CA playing on CA sites, split 3% to NV and 10% to CA.

8. CA sites would pay 13% tax on any revenue generated from players in NV playing on CA sites, split 6.5% to NV and 6.5% to CA.

9. NV sites would pay 13% tax on any revenue generated from players in CA playing on NV sites, split 6.5% to NV and 6.5% to CA.

10. NV players would pay CA income taxes on any winnings generated when playing on a CA site (but not when playing on a NV site that is pooled with a CA site).

I don't see anything on this that would even remotely raise any interest from CA, perhaps if the licensing 'deposit' were raised to $100M for Nevada sites it would raise an eyebrow, but CA government would still want the servers located in and regulated by CA.

Caesars/MGM are hoping to compact/legislate their way around duplication, but they are wasting their money on lobbying that would be better invested in that duplication, because the only way liquidity is ever going to be shared is if regulation is shared/duplicated.

In the credit card industry there are certain States which are better for tax purposes, other States better for collection purposes, interest rates permitted, late fees, cash advance charges, etc.

A company would love to be able to simply pay a ($10M e.g.) fee to be licensed in each of those States without needing to duplicate their entire business, but State governments don't work that way, the reason they set their regulations a certain way is to bring in corporate offices and jobs - no jobs no licenses.

So what companies have done is set up entire corporate headquarters in five or more States, the company I worked with literally had every transaction regulated by DE, OH, IL, SD and UT, plus had to maintain a full customer support staff, IT, etc, etc.

That's how the grown up world works when a State is literally issuing you a license to print money, the AGA needs to wake up and accept that, a 'patchwork of regulations' is what this country was founded on, so the sooner they stop banging their head into the granite wall of Federalism the better off we'll all be.

Ah, so you agree - there could be some scenarios where CA might compact with NV.

Not 'compact', but simple reciprocity agreements to share liquidity are extremely possible - perhaps inevitable if the stakeholders ever stop aligning themselves in a circular firing squad formation - to quote Sue Schneider.

If Caesars gets licensed in both States, regulated in both States, with the only thing shared being the tables rather than the players, the only issue that CA might have with allowing that would be the income tax exodus concern, but that could be managed/negotiated.

This pipe dream in which Nevada is going to be the 'gold standard' regulator and CA players are going to be playing on their sites directly is simply pissing in the wind though, CA is the State that sued and beat the Federal government for the right to regulate it's own nuclear power plants!

Regulation is what California does best (or at least more) than anyone outside of Washington DC, they wouldn't trust Nevada to regulate their garbage collection let alone their gaming industry - and CA Tribes would have to surrender sovereignty to a neighboring State, so even if the legislature did somehow all end up on the right payroll to approve that kind of compact, it would end up in litigation for remainder of the decade.

Well, buddy, shared player pools for liquidity is all we really need.

Indeed, but shared liquidity through reciprocity agreements requires that we need CA to pass their own bill first and set up it's own regulatory scheme before anything can be shared.

Bringing us back to my original point, 'we' shouldn't oppose CA SB678 in favor of Sandoval's Reid/Kyl-lite interstate compact proposal, for the same reasons 'we' should never have opposed any of the previous CA bills in favor of Federal legislation - State-by-State (peer-to-peer) is a realistic way for liquidity to be shared.

CA is never going to volunteer to be a spoke on Nevada's hub, Ian Imrich suggested on IMGL that CA would succeed from the union before allowing it to happen, so not one ounce of player energy should be spent opposing CA (or any other State) authorizations in favor of Nevada's fantasy.

Hey Folks -- I am going to be in Sacramento next week meeting with lawmakers regarding the introduced Wright bill and also Correa bill. If there are player specific provisions or concerns you'd like me to address during these meetings I would appreciate your thoughts. Feel free to respond ITT or send me a PM.

Thanks,

John A. Pappas
Executive Director, PPA

Let the market set the rake rate. $5 rake per hand no matter what would be devastating to longterm health of the poker economy.

Mandating rake for no flop would be an absolute calamity and I would never put a dime online.

Realistic ones?

Allow the Horseracing Industry to compete is about all I got.

Agree with this. Would like other California companies to be able to compete as well, such as Zynga and Yahoo.

is california as anxious as say nevada to get a deal done or is it more of a whenever it happens it happens kind of thing

As far as interstate compacts go, California will undoubtedly be the toughest nut to crack. The basic reason for this is obvious: no one doubts that a California-only market would still be very lucrative. To that extent CA would feel itself bargaining from a position of strength and would naturally seek a lot of concessions before opening its market to outside interests.

Except that, legally, it is very likely that there are Constitutional restrictions on just how protectionist CA laws can be in this area. While some would argue that because gambling/poker is traditionally a state interest online gambling/poker should also be a state interest, I think the inherent interstate nature of the internet will trump that tradition.

Under the prevailing "Dormant Commerce Clause" jurisprudence of the US SCT, a commercial activity that is otherwise legal under state law cannot be denied to out-of-state companies simply because they are out-of-state entities. While significant in-state regulation does not by itself disqualify a law, it is subjected to heightened scrutiny if it discriminates against out of state businesses in some way. There are limitations, as was shown recently by the case that said NY could not prohibit out-of-state wineries to ship wine if NY allowed in-state wineries to do it.

While it is difficult to say just how much, this legal principle does weaken CA's position to go it alone to some degree.

Interesting times, eh?

Skallagrim

impress upon them the many benefits to interstate player pooling.

warn them about any trouble amateur players may run into wrt their ability to net wins and losses when reporting taxes.

thank you and godspeed

Great incite as always, thanks Skall

This is a valid point, but even in the cases where the DCCD argument prevailed (direct shipment of wine), it took up to eight years to resolve, and the resolution prompted some States to ban all direct wine shipment to avoid discrimination, others to severely limit the amount of wine per customer.

In that case, the court ruled that the States "provide little evidence for their claim that purchasing wine over the Internet by minors is a problem. The States now permitting direct shipments report no such problem, and the States can minimize any risk with less restrictive steps, such as requiring an adult signature on delivery."

Obviously minors gambling online truly is a problem, the means to resolve that problem require regulation, and requiring the transactions to occur entirely within the State is both a reasonable step and one endorsed by Congress under the UIGEA.

Moreover, the EU commerce rules are essentially equivalent to the US DCC non-discrimination doctrine, and countries such as Italy which have completely ring-fenced their play, but allow anyone to apply for a license so long as the meet the same requirements as Italian companies, have been ruled lawful regulatory schemes rather than economic discrimination.

Where the EU has ruled laws discriminatory is when they take the lottery approach blocking all but the government from offering interactive gaming, making the intention of the scheme clearly economic rather than consumer protection.

But the US differentiates in that area from the EU because of Federal lottery law, though written prior to interactive gaming, Federal lottery laws were specifically designed to protect States from competition from other States in the area of gambling, which much like the MFA for the business of insurance effectively grants States the right to monopolize gambling so long as the revenue is for government rather than commercial gain.

Cliffs:

1) A DCCD challenge in CA could take years and be unlikely to achieve a desired result even if it prevailed.

2) A DCCD challenge would be unlikely to prevail in CA so long as outside operators have an opportunity to apply for software licensing.

3) A DCCD challenge might not even be successful against lottery monopoly States like Delaware.

California doesn't even need that. They can support their own player pool just fine. The other states need them, not the other way around.

Definitely not the same sense of urgency. NV/NJ wanted to get it done because they want to be in a position to siphon off as much money from bigger states as they can - they both know they will make very little off of their own gamblers.