Gatto Keeps Open Mind on Bad Actor Question

December 18th, 2014 | by Jason Reynolds

Assemblyman Mike Gatto, California online poker bill sponsor

Assemblyman Mike Gatto is under “no delusions” that his online poker bill is the final product. “It’s an opening statement, a discussion point,” he says. (Image: catherinefalkorganization.org)

Assemblyman Mike Gatto, sponsor of the newly-tabled Bill AB9 which aims to establish a regulatory framework to legalize online poker in California in 2015, has professed to have an open mind about the inclusion of bad actors in a regulated market.

Speaking to OnlinePokerReport.com, Gatto said that he has “no particular agenda,” other than doing what is best for California.

While the Assemblyman said he feels it would be the best thing for the state to start with a “level” playing field, which may suggest a concern about a dominant PokerStars entering the market.

GattoÂ also said he would never allow a situation to arise where California was “playing favorites” to one entity and expressed his desire to unite all the stakeholders on a bill that can be agreed on.

A schism has developed between California tribal operators, pitting those who wish to see PokerStars participate in a regulated market against those that are vehemently opposed.

On the PokerStars side is the Morongo Band of Mission Indians, which is allied with the state’s biggest card rooms, the Commerce, the Bike and the Hawaiian Gardens, and were joined recently by the defecting San Manuel Band of Mission Indians.

On the other side is just about everybody else. The inability of these two sides two agree on the language of previous bills has been partly responsible for their failure in the past.

Uniting Two Factions

Gatto said he is determined to find ways to appease both camps. “[The bill] will also have to address the internal concerns, and there are many different players who wish to participate in online poker,” he said. “They are not in a state of agreement right now, and I think you have to address both of those sets of concerns to be successful.

I think addressing the external concerns will create momentum, which in turn will make things feel more real for the internal players, and that ought to make them come to the table with more seriousness about arriving at some sort of agreement.”

At first glance the “bad actor” language in AB9 appears to be strongly worded.

It expressly bars from the market any business or brand-name associated with “anyÂ operation that has accepted a bet or engaged in a financialÂ transaction related to that bet from any person in the United StatesÂ on any form of Internet gaming after December 31, 2006.”

This appears to preclude PokerStars, of course, except that a subsequent clause allows the regulator to waive all of the above when deciding whether to license an operator, as long as it will not “not adversely affect the integrity of, or undermine public confidence in, intrastate Internet poker or otherwise pose a threat to the public interest or to the effective regulation and control of intrastate Internet poker.”

Liberal Language

Gatto certainly does not see this bill as being tough on bad actors, as others do, and PokerStars and its new owner Amaya Gaming will take hope from that.

“Well, the irony is that I actually got a call just over an hour ago from an attorney who has handled these issues for 30 years, and he said he thought this was not that aggressive, that it was a step towards liberalizing the language compared to bill proposals in the past,” said Gatto.

The Assemblyman is also aware that for the bill to be passed and accepted by all stakeholders, its language will need to evolve.

“I am under no delusions, nor should anybody else who doesn’t follow the legislative process be under any delusions, that my bill is a final product,” he said.Â “This is an opening statement, it’s a discussion point, it’s putting some language across the desk; but procedurally, this will go through a very, very thorough public hearing process.”