California Gambling Laws

Can you believe it?

Online gambling, with the exception of horse racing, hasn’t been legalized in California. Nevada and New Jersey both beat them to the punch. So did Delaware.

Really? You guys are slacking.

Kidding aside, things are looking up. Experts suggest that we may see a bill pass within the next 12-18 months.

What’s holding them back? Two things.

One, the 2014 elections. That alone suggests that regulation will be pushed to 2015.

Two, no one can decide on what rules they want to push through. On one side, you have people lobbying for state-to-state pacts. On the other you have the Indian tribes that want to keep online poker in California, opt out of federal legislation, implement bad actors clauses, and have guidelines that keep any one casino from monopolizing the market.

It’s not that California needs to consider intrastate poker, though. According to Richard Schuetz, the commissioner for the CGCC:

“We have 38 million people,” he said. “We’re the eighth largest economy in the world. We’re bigger than Canada, so it’s not a case like Nevada that has 2.7 million people. We have more poker tables in the state of California than every other state in the nation.”

My guess is that non-tribe members want to maximize their revenue potential by making pacts with other states and improving player liquidity. And who can blame them? California has been in a budget crisis since 2003, experience a shortfall in the billions of dollars. They could really use the $200-$300 million per year that experts claim the state could make in (online) gambling revenue. They could probably make more if they agreed to intrastate pacts and federal legislation, if and when that time ever comes.

Who knows. For now, we’ll just have to wait and see. There are lots of bills being introduced, sent back to be changed, and then sent to be reviewed again.

It’s progress, sure – but it’s slow progress.

Cali Gambling Laws in Progress

There has been several attempts to legalize online gambling / poker in California. The following are the most publicized attempts.

  • SB 1463 – This would create a structure for intrastate gambling. This bill is frowned upon by the Indian tribes though, because they don’t want to be involved in intrastate poker.
  • SB 40 – This received support from the California Gaming Association. This is a big deal, considering that this consists of 75% of all licensed card rooms in the state.
  • SB 51 – Also known as the Internet Gambling Consumer Protection and Public-Private Partnership Act of 2013. This would legalize online poker only, and would be limited to casinos already operating in California.
  • The Pechanga Online Poker Bill – This is still in action now. This would legalize online poker in the state only. It would also set a launch date for all operators so that no one gets a head start.
  • SB 678 – Only online poker would be legalized. It would address internet cafes, and exclude companies that broke federal law (post-UIGEA, for example).

 

Current Gambling Laws in California

The following is a cliff-note version of the current gaming laws in California.

Home (Social) Poker Games – Home poker games are legal so long as no one is taking a cut of the action That means no fees or rake is taken. You can only win money from the other players.

(2) As used in this section, "controlled game" does not include any of the following:

(D) Games played with cards in private homes or residences, in which no person makes money for operating the game, except as a player.

Commercial Gaming – Brick and mortar casinos are (obviously) legal. Pure dice games, such as craps, aren’t allowed. Neither are house-banked games. The exception to both is if they’re in an Indian casino.

Sports Betting – Not allowed in California.

Lotteries – These are legal.

Horse Racing – Legal, even online.

If you have any questions about the state laws, we recommend that you speak with a lawyer. You can also read them yourself here: http://www.gambling-law-us.com/State-Laws/California/

California Gambling Timeline

Here are some of the most important dates in the last couple of years regarding the efforts to legalize online gambling in the state of California.

January 29th, 2014 – Roderick Wright, the senator behind SB 51 and 1463, was convicted on 8 felony counts of voter fraud for lying about his place of residency. As such, he was forced to resign as Chairman of the Senate Governmental Organization Committee. He was the state’s largest proponent of legalizing online poker.

December 20th, 2013 – A study was done that showed that online poker in California could be worth up to $384 after a decade of legal online gambling. It would be worth $263 million in it’s first year.

July 10th, 2013 – It was reported that PokerStars may have found a partner in Hawaiian Gardens so that they could operate in the state. However, the odds are against them because the majority of bills introduced have bad actors clauses. A bad actors clause would prevent businesses that accepted bets post-UIGEA from receiving a license.

February 22, 2013 – California Senator Lou Correa introduced SB 678. This would legalize online poker only and include a bad actors clause. SB 678 is sponsored by the Sam Manuel Band of Mission Indians.

December 19th, 2012 – SB 51 was introduced by Senator Roderick Wright. This bill is also known as the Internet Gambling Consumer Protection and Public-Private Partnership Act of 2013.

February 24th, 2012 – SB 1463 was introduced by Roderick Wright and Darrell Steinberg.