When it comes to online gambling, the California legislature has proven it doesn’t do anything fast.
Legislation to legalize and regulate online poker has been on the table for the better part of a decade. There’s a chance that the current online poker bill will see a push to be passed before the legislature adjourns at the end of the month.
Meanwhile, momentum to pass a daily fantasy sports bill is nowhere to be found.
That bill being considered in the final two weeks of the session by the Senate would appear to be a longshot at this point. Why might that be? And what problems could a delay in passing a DFS bill cause?
The DFS bill, when last seen…
In January, it had looked like the DFS industry would get its first legislative victory in 2016 via California. A bill sped through committee hearings and then received just one vote against it in the Assembly.
Since then? It’s been pretty much crickets in the Senate.
The bill was amended back in June, and it was scheduled to come up for a committee hearing. That hearing never happened; nearly two months later, and the bill has seen no action.
While it’s possible that we will see the bill come up for a committee hearing and vote next week, the odds don’t seem to be in the legislation’s favor.
So what’s the hold up for California DFS?
There are a lot of variables in play that could be stopping progress on the DFS legislation:
A rougher road in the Senate
While the bill sponsor, Assemblymember Adam Gray, marshaled forces admirably in his chamber, there has been no parallel champion of the bill — at least publicly — in the Senate.
The only senator who has even mentioned the bill in recent months is California Senate leader Kevin de León, who said he was “not in a rush” on passing a fantasy sports bill.
Why he isn’t in a rush remains a bit of a mystery. But without the backing of the Senate leadership, the DFS bill seems likely to remain on the shelf.
Tribal opposition
Issues from the gaming tribes in California might be the biggest sticking point for DFS.
A letter surfaced back in February in which the San Manuel and Morongo bands of Mission Indians said they opposed Gray’s bill.
It was unlikely that it was a coincidence that action on the bill basically stopped soon after these tribes voiced their opposition.
There’s a possibility of the bill being amended — or a new bill surfacing — that would be more in line with the proposal for online poker. That might be a matter for 2017, not this year, however.
Legal issues
The legality of DFS in California — both as it currently stands and under the legislation — are both open questions.
Attorney General Kamala Harris was asked her opinion about DFS’ legality last fall. Harris is in the middle of a race for the Senate, however, and her dropping into the discussion now doesn’t seem a likely development.
Tribes have floated the idea that DFS operators in the state have been running afoul of the law. A reading of the state penal code on gambling would seem to give them at least a decent case.
The legality of the bill itself has been questioned by some of the tribes, the group Stand Up For California! and Assemblymember Marc Levine — the one “no” vote in the Assembly. All have said they believed a constitutional amendment was necessary to authorize DFS-style contests.
This consideration could be part of why DFS’ momentum has slowed.
Does it matter that much if California doesn’t get a DFS bill passed?
The answer to this question isn’t quite as simple as “yes” or “no.”
At a basic level, DFS sites are already operating in California in the vast majority of cases. Getting a law passed would be nice, but it hasn’t risen to the level of need like in New York, where the stakes were unquestionably high.
At the same time, the industry would like to get legal clarity now — specifically to avoid the issues that happened in NY. Getting contests shut down in California would be a doomsday scenario for the industry.
How likely is a shutdown to happen? Perhaps not very likely, at least in the short term, as it would likely require a negative AG opinion to be issued. Could a new AG, appointed to take Harris’ place, look into the issue more seriously?
That’s at least a feasible scenario, and one the DFS industry would rather render moot by getting legislation passed sooner rather than later.
