Bill Would Legalize Online Poker in California

Legislation introduced by California State Senator Sen. Rod Wright, who heads the committee that oversees gambling, would make California the first state in the country to legalize online poker and generate billions in revenue for the state’s financially-strapped treasury.

Under Wright's Senate Bill 1485 the state Department of Justice would award five-year contracts to as many as three California-based operators to run legal online poker websites, with the operators having to meet a variety of legal, technical and financial requirements.

SB 1485 has been designated as an urgency measure and would take effect immediately upon legislative passage and signature by the Governor. A non-urgency measure would take effect January 1, 2011. This bill’s urgency status stems from California’s budget deficit, projected to hit $19 billion by the end of the fiscal year.

At least 20 percent of the revenue under SB 1485 would go to the state, though Wright said it could take up to two or three years to get an online poker system up and running—and possibly longer if legal challenges have to be overcome.

Estimates show that Californians bet as much as $300 million annually. This activity is not currently taxed and Wright's bill would make it a crime for Californians to play at sites that are not based in-state.

SB 1485 will appear today, which by coincidence or design—take your pick—is the day that final UIGEA regulations compelling banks, credit card companies and other financial institutions to “prevent payments to businesses in connection with unlawful Internet gambling” take effect.