The authorities of California are considering a draft bill on legalization of online poker

The authorities of California have announced about a new initiative intending to legalize and regulate online poker. The said initiative was introduced by Reginald Jones Surveyor, one of the members of The California State Assembly. The executive proposed a draft bill AB 1677 “On internet poker consumer rights protection¨. Provisions of the document cover all the previously described norms of online poker regulation functioning in the country.

Taxation of licensees

According to the draft bill AB 1677, licenses are issued to poker rooms operating on the territory of California being valid for 7 years. The cost of such a license accounts for $12, 5 mil. charged by local fiscal authorities. Taxation of poker room owners and operators will be calculated according to the annual rate of the company’s revenue. The higher the incomes are – the higher taxes operators pay.

Based on the text of the draft bill, there were proposed the following interest rates:

  • An annual revenue less than $150 mil. is taxed at 8,847%, more than $150 mil. – 10%;
  • A revenue exceeding $250 mil. for the 12 months – 12,5%;
  • A revenue exceeding $350 mil. a year– 15%.

Partnerships and the legal framework

Legislative initiatives introduced by Jones Surveyor contain a couple of regulations regarding gaming providers that should be attested and get a certain approval from the Californian regulators. The said regulation authorities have to confirm additionally operators’ rights to function on the territory of the state, as well as to check their reliability. Betting websites offering horserace-betting services can become service providers for poker licensees. Cooperation conditions of this kind imply 50% allowances for the benefit of betting providers out of the total revenue of online poker rooms.

The draft bill AB 1677 also contains one contradictory allowance. According to the said initiative, 95% out of the first $60 mil. gained by the authorities out of poker will be transferred to state horserace-betting operators. In return, poker operators will get a possibility to place pre-deposit ADW stakes on their websites.

Expert opinion

Gambling experts doubt that income rates out of online poker will account for $60 mil. Betting communities involved into horserace-betting express the same opinion. A year earlier the said betting community filed a written petition to the Californian legislators asking to fill the state´s budget deficit with funds charged from betting operators.

Note, please: back in 2016, The California State Assembly dismissed the initiative of the same draft bill on legalization and regulation of online poker. On the same occasion, the local mass media announced that the members of The California State Assembly wouldn’t be considering it.

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