How Federal Laws Affect the Betting Atmosphere in California
While progress was made in the last few years to garner the quell the opposition of the horse racing industry, the bad actor clause remains the final sticking point on which there is no compromise. The most recent attempt at a bill in by longtime online poker supporter Assemblyman Reggie Jones-Sawyer was met with such resistance to compromise on the bad actor debate that the bill was considered dead by mid-April.
The move came about due to the exhaustion of funds over many years pertaining to this issue with no clear resolution in sight, but it leaves the PokerStars group weakened, now boasting of the Morongo tribe as the only Native American faction on board with the removal of the bad actor clause.
Future developments regarding this coalition may make way for a new round of talks. Not even two full months into and news emerges that California will not pursue online poker legislation this year. Even the future of online poker in California is unclear and seems dependent upon the upcoming US Supreme Court decision regarding sports betting.
According to one legislator. California has 88 cardrooms currently operating throughout the state, not including those inside many of the 62 tribal casino operations. The vast majority of cardrooms run smoothly and legitimately, staying well within the guidelines of the California Gambling Control Commission CGCC and federal gambling statutes.
However, the number of incidents. California is a haven for cardrooms. This is in addition to the tribal gambling operations in California, which currently total 62 casinos.
While state legislators have yet to find agreement. In the most unsurprising online poker news, California will not legalize online poker in It was all but certain that nothing would happen after the initial movement in the first few months of the year.
News out of the Golden State in March indicated that lawmakers had little confidence. Online poker legislation has been tougher to pass in the United States than most poker players and fans ever anticipated. And it is not going to be an easier in Michigan, no matter the positivity of State Senator Mike Kowall or the plethora of negotiations in progress. Officials at the FTC said the merger would create an illegal monopoly. The path to legalized online poker in California has been full of disappointments.
After significant progress in that resulted in yet another failure, and a total of ten years of attempts to legalize and regulate California real-money online poker, the issue was put on indefinite hold in due to a stalemate that has caused many lawmakers and interested parties to leave the discussions in frustration.
Californians are playing Internet poker in numbers that far outstrip any other state in the US and probably quite a few countries as well. We suggest only sites that are properly licensed and regulated in their jurisdiction, ensuring that Californians play only at legal poker rooms online.
Therefore, the conclusion that playing online is technically illegal in California is no longer correct. But about half the states also make it a crime to make a bet under some circumstances, even though nobody is ever charged any more.
But other wagers are not forbidden. It is not a crime to buy a lottery ticket, even in an illegal numbers games. I think the better, more legally supportable, conclusion is: Here is my analysis and reasoning to support that conclusion. California Penal Code Sec. The conclusion Professor Rose reaches is correct for the situation where the player bets in an online poker game that is NOT also a percentage game. This is because playing poker for money in California is legal so long as the particular game being played does not run afoul of the other provisions of the law.
Social home games are an example. As long as no one makes money, other than as a mere player, it is OK to play in a real money home poker game. In addition, playing in duly licensed California cardrooms does not run afoul of the prohibition because those cardrooms charge players in a manner that is not considered to be a percentage rake. However, the conclusion is incorrect where the player bets in an online poker game if that game is a "percentage game.
Usually the fee takes the form of the website operator being entitled to a rake that is a percentage of the money in a given pot, limited to a maximum amount.
In tournament play there is an entry fee that may be viewed as a percentage of the buy-in amount each player pays, the sum of which buy-ins make up the prize pool to be split among the winners, since the amount increases as the buy-in amount increases.
I am not aware of any online real-money poker games that do not have a rake or entry fee for most real-money poker games and tournaments. I believe the existence of the rake or entry fee makes the poker game a percentage game, all of which are banned as a class by Section Three different methods of calculating the amounts to be paid to the house by players were considered: The court held that if either of the first two methods is used, then the game will be a percentage game.
Only the third method was determined to be a permissible form the house could use and still avoid having the game be declared a percentage game. I believe the rake in real-money online poker games and tournaments falls into either or both of the first two categories mentioned in Sullivan.
In response to several court decisions in California in and , California Penal Code Section j was adopted. Fees charged for all wagers shall be determined prior to the start of play of any hand or round.
The actual collection of the fee may occur before or after the start of play. Ample notice shall be provided to the patrons of gambling establishments relating to the assessment of fees. Flat fees on each wager may be assessed at different collection rates, but no more than three collection rates may be established per table. The first version of this law was passed in In the statute was amended to its present text, which allows fees to be collected "before or after the start of play.
An informal telephone discussion with a member of the California Department of Justice Gaming Division on December 15, , confirmed that view as well as the fact that the Division has not issued regulations interpreting how to calculate collection fees.
The following language has been added to the law: The initial problem with the online cardrooms is that they follow the Las Vegas Style "no flop, no drop" rule. That is, if everyone folds to the big blind or the dealer button in stud then no rake is taken in Las Vegas, or in the online cardrooms. This alone would violate the quoted statute, which requires that if a flat fee is involved, the amount must be known in advance, the charge being taken either before or after the hand is completed.
This, too, violates the statute and technically makes the playing of online poker illegal under Penal Code Section for those who are in California when they play. Under the statute it is conceivable that different amounts of flat fees could be charged on different wagering rounds, but not on different amounts in the pot. The cited provision of Section j was adopted in response to several California court decisions in and that construed what was meant by a percentage game.
The provision of the statute that was adopted approved a fee collection scheme that the court in Sutter's Place, Inc. Kennedy , 84 Cal.