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California Needs the Revenue Generated by Online Poker

Written By: PokerNet.com | April 12, 2012 | Posted In Poker News

California news state that Californians wager about $13 billion a year on online poker alone, a number too high to ignore. Due to this, a bill is being proposed by Sen. Darrell Steinberg (D-Sacramento) and Sen. Roderick Wright (D-Inglewood) introduced a bill that would allow online poker to be played within the state.

The Internet Gambling Consumer Protection and Public-Private Partnership Act of 2012, also known as the Senate Bill 1463 was introduced in February to allow Internet poker to be offered in California by authorized cardrooms, Indian tribe casinos, horse racing tracks and online horse wagering sites that have been in operation for at least three years prior to licensing.

The bill is expected to generate “hundreds of millions of dollars” for the state in the fiscal year 2012-13. Currently, California is said to face one of its most concerning budgetary crises in its history. State politicians already looked to the possibility of online gaming to help with the budget.

The bill, when it finally becomes a law will make operators able to apply with a 10-year license once the regulatory framework has been done. If the license if granted, operators will pay licensing fees of $30 million, credited against gross gaming revenue proceeds for the first three years of operation.

However, the bill states that only online poker will be allowed for the first two years of regulation. According to the bill, “After that two-year period, the department may phase in other games allowed under the California Constitution and the Penal Code.”

Wright has previously pushed for bills regarding online poker but all were in vain. The recent changes in the Department of Justice’s stance on online poker make him and the supporters of the bill hopeful.

A coalition of Indian tribes and card room operators are ready to stand behind the online poker bill, but only if California gaming establishments, not out-of-state interests, can be licensed and only if it’s poker.

However, only a handful of tribes support the bill because others are afraid that they wouldn’t be able to compete with the big companies. They are concerned that the digital shift to online gambling will put a huge dent in their revenue from brick-and-mortar casinos. Tribes contribute hundreds of millions of dollars in revenue and gaming compacts to the state and make major donations to political campaigns.

Another issue is about huge social and economic impacts that come with the expansion into regulating online gambling. “Increases in crime and all of the money it takes to deal with that. Increases in unemployment, increases in homelessness, increases in welfare,” said the California Coalition Against Gambling’s James Butler. It is advised that politicians should smooth this out before making any big steps.

But those won’t change the fact that the gambling industry renders billions. “Right now, millions of Californians are playing online poker and every dollar goes off-shore,” said Andrew Governor of the California Online Poker Association. We want to ensure that money stays in California.”

Source: Poker News

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