California iGaming gambling legislation

California lawmakers will mull several state bills that could affect both land and online gambling efforts this year (Image: Michael Macor, The Chronicle)

A new California gambling bill approved last week by the State Senate could up taxes and review regulatory procedures on the Golden State’s ever-expanding gaming industry. Introduced by Sen. Leland Yee (D-San Francisco), SB 601 will go under the microscope of a gaming policy advisory committee comprised of both industry executives and members of the public, with the goal of determining whether the existing regulatory structures that are in place are aiding or abetting California’s current and future economic outlook.

Regulatory Review

Additionally, the panel will review the impact of the state’s numerous card clubs on both state and local tax flows, as well as on fees to both. Yee said he is exploring the possibility that more non-Indian gaming outfits could help boost California’s ever-struggling coffers to become fuller.

“Despite the good news we’ve seen in budget projections, I think it’s always worth looking at new revenue sources for our state,” noted Yee. Once the committee review is complete, the new bill will move on to the state Assembly for further assessment.

Of course, as Newton so wisely noted, for every action there is a similar and equal reaction, and nowhere does that hold truer than in the world of gambling legislation. No sooner was SB 601 brought to light than the California Coalition Against Gambling Expansion (CCAGE) popped up, declaring that the new bill was nothing more but a gateway drug for loosening regulatory procedures for operators.

“SB 601 should be amended to require a balanced look at the laws and regulations governing gambling, including not only their impeding effect on the industry, but the social and economic costs inevitably related to gambling expansion among California families and communities — e.g., increased debts, foreclosures and bankruptcies, divorces, suicides, etc.,” said CCAGE in a letter to legislators about the bill.

Many Viewpoints, Little Agreement

Of course, California has a myriad of factions and viewpoints when it comes to gambling, so SB 601 is hardly the only legislation on the table in this arena right now.  Also under review are SB 678 – introduced by Sen. Lou Correa (D-Santa Ana) – also known as the “Authorization and Regulation of Internet Poker and Consumer Protection Act of 2013,” a bill aimed at legalizing online poker only, which has the support of eight Indian tribes.

Then there’s SB 51 –  the “Internet Gambling Consumer Protection and Public-Private Partnership Act of 2013” – introduced by Sen. Roderick Wright (D-Inglewood). Of course, having been found guilty on eight counts of perjury and voter fraud last week, Wright  may have more to worry about  than gambling legislation right now.

With 38 million residents to draw from, California holds by far the most promise of any U.S. state to make big bucks from online gambling. In fact, a recent study conducted jointly by the market research firm PokerScout along with consulting firm Academicon  revealed the Golden State has a $263 million revenue potential for its first year of iGaming, should it decide to legalize it, and a $384 million possibility for year 10. That being said, other states – such as Delaware – have proved to be pretty far off in their initial projections so far, but with California’s huge population base, there’s way more potential for hitting the mark or close to it in these projections.