California Looks to Online Poker for Financial Help

February 26, 2012

Last Friday, a new online poker campaign was launched in California. The Internet Gambling Consumer Protection and Public-Private Partnership Act of 2012, if passed, will permit intrastate online gambling in California. The bill dictates that only poker would be allowed for the first two years of regulation.

Pending a regulatory outline, eligible operators can apply for a 10-year license and if accepted, will have to pay a licensing fee of $30 million, credited against monthly revenue.

This bill seeks “to provide hundreds of millions of dollars annually for the public services that have been cut repeatedly during the state’s budget crisis” in hopes that at least $200 million will be earned for the state in the fiscal 2012-2013 year. This all looks great on paper, but it won’t be good on paper. California Governor Jerry Brown has made it publicly clear that he is skeptical that legalized online gambling would solve the cash-strapped state’s economic problems.

California’s tribal casino community, which pays hundreds of millions of dollars every year to the state for gaming contracts, is divided on regulation. Gaming experts took the cause to Washington in earlier this month to shed light on how a federal Internet gambling bill would affect the tribes. One attorney testified that the large licensing fee imposed by California would leave tribal casinos helpless.

Neighboring state, Nevada, has already legalized intrastate online poker and are close to licensing.


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