So by agreeing to not pursue online poker the tracks would make millions without lifting a finger. Hell of a clause.

http://www.onlinepokerreport.com/196...-online-poker/

This article can be a little misleading in regards to the $60M yearly payment to the tribes. Where it says "one-time license fee" it should say "one-time license deposit". It is an advance deposit the sites will pay upon licensing against their future gaming revenue tax payments (which the article says later on).

The bill is saying that each year, the first $60M in tax revenues from the poker sites goes to the race tracks (for various specified uses, but 95% to increasing the horsemen's purses). If the tax revenues fall below $60M, then the tracks get less. It is simply specifying how the tax revenues to the state from the poker sites will get allocated, and doesn't affect how much in taxes the sites pay each year. I don't see any reason that PokerStars or the tribes would object to this provision. Some of the politicians might.

Thanks for clearing that up PX.

...but I almost hate to see articles about these bills, always giving a glimmer of hope...then...sad tears.

CA isnt going to get $60million in tax revemues, probably ever but certainly not in the first fee years. 15% of a projected market in the $300 million range is much less, leaving nothing for the state. I havent read the bill entirely but it doesnt pencil out

Steve's articles, always good reads, but always positive and always pro-Pokerstars. All the poker media is at least cautiously optimistic though. But i still see a problem with the math

There is a difference between 'revenues' and ' receipts' with the latter being the tax dollars. If the horse track payoff is coming out of tax receipts I would say its a good deal for everyone but the state itself, which would get little to no revenue to even cover regulation

It's not $60M "guaranteed" to the race tracks per year. It's all of the tax revenues earned by the state go to the race tracks, up to the first $60M per year. It always pencils out, not matter how much gaming revenue actually comes in.

So the state will give all its share over to the tracks?

According to this bill in its current form, yes, up to the first $60M per year. That's the very first section of the bill. (Although actually it's only 95% of the first $60M - the other 5% goes to funding fairs and expos.)

You appear to be right, sorry for doubting. But in this case it seems even more unlikely to pass

Why? Who do you think will oppose it?

I must be missing something. How much tax per year is anticipated?

That's a pretty horse **** provision (pun intended). It's basically just stealing from taxpayers, in return for doing nothing. Maybe remove a zero and it *could* work, but it's still ("legally" using your political connections/power) stealing.

FFS, make these entities compete out in the real world in order to get paid. If you can't hack it in today's gambling market, you deserve to be out of business instead of sucking on the taxpayer mother-teet because you were around when Sears, Blockbuster, and/or Radio Shack were thriving businesses.

The tracks could still earn $$ through affiliate sign-up/revenue-sharing or something. It would/could also incentivize existing and new customers to come to their tracks (to cash out winnings in person, cross-promotions through a skin site, etc.). But that would require them to run their business out in the scary real world, so we're not going to see that happen.

The whole point of this provision is that letting the race tracks get licensed to run sites was a deal-breaker for many of the cardrooms and casinos. And not being included in licensing was deal-break for the race tracks. The bill simply couldn't pass either way. This new proposal gives a path to passing the bill without granting licensing to the race tracks.

I would expect the total amount ($60M) and the percentage of the take (95%) for the race tracks to be cut back somewhat before the bill advances. It will just be a matter of how much the race tracks will accept vs. how much the politicians will want to preserve for the state general fund.

Gramps is right, if these numbers are even remotely realistic . . . .

There won't anywhere near $60 million in tax receipts for years if ever (the game is in decline, the boom is over, not coming back), and for what tax money that does come to be diverted to horse racing instead of going to public services is not going to get much support from Democrats in the legislature.

The cost of regulation would make this bill cost the taxpayers money, not even revenue neutral.

Okay, read a little bit of the bill. Looks like the cost of regulation will be covered by specific fees, over and above whatever tax rate it ends up being. So the bill should be revenue neutral. But still . . . all of the tax revenue going to the Horse Racing Industry?

I guess we see how powerful the tracks are in CA, they get the state's entire share.

So, I'm guessing 15% just isn't going to cut it, and the new number that gets slipped in there is going to be more like 25%, just so there is a little somthin somthin for the treasury

I have a different guess. My guess is that the revenue tax will be the 15%, but the race track percentage share might get trimmed to something more like 50% of tax revenues, with $30M cap per year. Or maybe not. The California state budget is close to $250 BILLION dollars per year. A $60 million give-away to the horse tracks is minuscule in comparison. The CA state legislature already did a give-away to the race tracks when they eliminated in 2009 the $35M+ in annual licensing fees on the horse racing associations. It's not hard to imagine that they will support this additional give-away, especially since it will come from new revenues, not an existing tax revenue stream.

If this bill passes, unless I'm missing something, it will be a Felony if you play on an unregulated site like Bovada, America's Card room. gg if you live in that state and play online poker.

The rooms wouldn't even start for two years after the bill passes, but in the mean time, the unregulated sites will likely pull out of California, many did in NJ. So the window for launch is basically date bill passes + time it takes to promulgate and approve regulations (max 270 days) + 1 year "according to article".

The state is not even going to make much money off this. The bill gives 95% of the tax revenue up to $60 Mil to the Horse Racing industry, which is excluded from offering online poker. Seeing how online sites in other states haven't made much money, I'm sure the only entity that will profit from this will be the horse racing industry.

The bill does NOT allow for interstate packs. So everyone including myself that thought the only way regulated poker in the US was going to work was when a big state got up and running, and shared player pools with all the smaller states. Not happening if this bill passes. Maybe years from now they could add that, but I would not expect that anytime soon as in the next ten years. They are concerned about violating federal law regarding interstate gambling, which they avoid by keeping it in CA. Still a fail.

They will not allow anyone with out a SSN to play, which cuts out foreign tourists, illegal aliens, which is at least a few potential customers. I'm pretty sure you can buy into a cash games at Commerce if you do not have a SSN but not online poker.

There is nothing in the bill which gives players first-lien on the funds in the case of site bankruptcy; recourse in the case of theft of those funds; etc. The funds will be segregated but not protected. WSOP.com would likely be a player, and Ceasers is basically bankrupt. I doubt other lien holders are going to worry about online poker players if the go after Ceasers assets, so a real concern.

with Bovada up to #3 in traffic now, I'd say anyone in Calf that likes online poker should hope this bill does not pass. By the time you spread the player pool between several sites in CA, largest room will not come close to top ten in traffic on poker scout.

Too many lobbies in CA to ever get a bill passed anyway.

True, but it seems unlikely a player would be charged with a felony for playing online poker. It has been a felony in WA for ten years without a single player arrested.

This is also true, and I would expect the same thing. Carbon and ACR/BCP for instance, will not accept players from WA because of the felony provision. Those who had accounts early on can still play, but cannot transact. You can still transact with Bovada from WA but it is difficult (from what I understand lol).

This to me is the reason this bill will fail this time. Getting 2/3's to support a bill that goes through the motions for little to no return just to give gaming interests a market won't be that popular. Some tribes will also object to paying a tax that goes directly to the horse tracks they are trying to keep from making a buck off online poker in the first place. They would be better off letting the tracks try and fail at online poker.

Those are genuine shortcomings with this bill

There will be a Pokerstars Network with a half dozen skins right out of the gate. There will be a large enough player mass there to sustain games, and players will gravitate to the large player pool, eventually leaving the other sites without enough players to really make a buck.

I think there have been some realistic estimates on the potential size of the CA market, but those behind this bill apparently think they are way off, as in way too low.

So let's say the state gets none of the tax money from the sites. I thinking the sites will track deposits and withdrawals and report above certain amounts to the state. Then this turns into a money maker in the form of personal taxes.

Obviously this tax amount wouldn't be much. Thoughts?

the bill does include language that puts at least some of the burden on the poker sites to facilitate collecting state income tax.

I don't think the percentage of players who would be paying state tax on their poker play is very high

I've thought about this more and yeah the personal state taxes would be extremely small comparatively.

It will be quite interesting to see how the State Franchise Board regulates the collection of withholding and income taxes on online poker players. Will they require withholding on every tournament payout? Or on every withdrawal that represents winnings (i.e., is greater than the amount deposited by the player)? On every net cash game win for each table session?

Does anyone know how New Jersey does it?

Every win seems ridiculous but hey this is the government we are taking about.

Seems easier to just keep track of deposits and withdrawals.