California's Internet poker bill heads to full Assembly

ARCADIA, Calif. – Legislation that would legalize Internet poker in California and provide California racing interests with a $60 million annual subsidy passed the Assembly Committee on Appropriations by a vote of 14-1 on Wednesday.

The legislation is expected to be heard next by the full Assembly. The bill passed the Assembly’s Government Organization Committee by a vote of 19-0 in April.

Assembly Bill 2863 allows Internet poker licenses to be awarded in the state and dictates that racetracks receive compensation from license holders as a consolation for losing the exclusive market on legal online wagering. Currently, horse racing is the only form of legal online gambling in California through account-wagering providers. Poker license holders must pay the state $12.5 million for the right to conduct poker games, according to text from the legislation.

Before being enacted, the bill must pass the Assembly and Senate and would require the signature of Gov. Jerry Brown. The bill has the support of several racetracks, horsemen’s organizations, and labor unions, who have argued that the bill will allow California racing to compete with other states that gain revenue for purses through casinos.

The bill requires that $60 million be collected each fiscal year and deposited in the California Horse Racing Internet Poker Account, which would be dispersed by the California Horse Racing Board. The annual subsidy would be divided between racetracks and horsemen in the form of purses.

Such a subsidy would enhance purses at a time when California tracks have struggled to attract additional business to raise purses. For its summer meeting that begins July 15, Del Mar has enacted a 10 percent reduction in overnight purses after business failed to meet expectations in recent seasons, leading to a debt in the purse pool of more than $1 million.