California’s horse racing industry has officially thrown its weight behind Assemblyman Adam Gray’s online poker bill (AB 2863). Nine industry leaders wrote to Gray last week to pledge support for the bill, which is due to receive a hearing of the California’s Assembly Committee on Governmental Organization on Wednesday.
And well, they might. In its current form, the bill would exclude the racetracks from participation in a future online poker market, for which the industry would be compensated to the tune of $60 million per year when, and if, online poker gets up and running in California.
Support for the bill is dependent on several key elements, according to the letter. First, the $60 million stays. And it should be considered a “baseline number.” The industry is not prepared to negotiate on this, the leaders said.
$60 Million Buys Industry Approval
The letter also notes that the tax rates have been left blank in the bill, although 15 percent plus a $15 million licensing fee had been mooted in an earlier draft. Since the $60 million fee is to be solely funded by license fees and taxes, said the letter, the fees, and tax rates need to be decided upon so the industry can assess the likelihood that the $60 million will be available.
“Our continued support for the legislation is predicated on the ultimate reasonableness of those numbers,” it emphasized.
“On a related point,” it added, “we believe AB 2863 should be amended to confirm that in the event the $60 million minimum was not fully funded in a given year, there would be a carry over into the following year(s) with first dollars from future i-Poker license fees and tax revenues going to cure the deficiency.”
Pechanga Demands Amendment
The racetracks’ support for the bill, and acceptance of their own non-participation could be a dramatic breakthrough. Many tribal operators have been steadfastly opposed to the horseracing industry’s inclusion in the market, and the various stakeholders’ inability to agree on who should be eligible for licenses has been a major barrier to the success of previous bills. The horseracing industry’s letter of support is a big compromise and potentially a major hurdle overcome.
Division remains, of course, between the Pechanga and Morongo coalitions. The latter wants to see an inclusive market and one that would not exclude PokerStars, with whom it has a commercial agreement while the Pechanga tribe and its allies wish to retain the “bad actor” language of bills past.
Last week it emerged that the bill had been amended at the behest of the Pechanga collation to contain impartial language on suitability standards for prospective licensees. The amendment permitted the coalition to adopt a neutral stance on the bill rather than one of opposition.
