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Opinion: Regulate online poker, keep our jobs and revenue here, help balance the state budget

During his inaugural address, Gov. Jerry Brown called on elected officials to tackle our state’s challenges, not as Democrats or Republicans, but as Californians first.   Closing a $25 billion budget deficit while seeking to maintain the best possible public services will require every ounce of creativity, collaboration and commitment to the future of our state.

Frankly, there are no “silver bullets” to the state’s budget and economic challenges. No single solution will fix the problem.  We need to be looking beyond temporary fixes toward long-term reforms that can take hold and sustain our recovery for years to come.

I’ve recently introduced legislation, Senate Bill 40, which will help balance the state budget by delivering more than $1 billion in new revenues over the next decade without raising taxes. It’s called California First: The State Funding, Job Creation and Online Gaming Accountability Act.  

Today, more than two million Californians play poker online. Each year, Californians wager 13 billion dollars playing unregulated online poker. However, none of this money stays in California.  The money leaves our state to support illegal, offshore interests.   Nothing stops these operators from targeting children.  Senate Bill 40 is carefully written to regulate and limit gaming, while keeping the revenue and jobs here in California, helping state and local governments.

A recent economic report conducted by former Finance Dept. Director Timothy L. Gage says the authorization and regulation of online poker in California will generate over a billion dollars in new revenue to the state within the first 10 years and create more than 1,100 new jobs.  Given the very tough choices outlined in the governor’s budget released earlier this week, this is very good news indeed.

Specifically, Senate Bill 40 authorizes the California Department of Justice, Bureau of Gambling Control to regulate and monitor online poker operations. This will ensure players are protected from fraud or theft, which occur frequently at illegal, offshore poker sites. The bill also includes safeguards to prevent minors from being able to gamble online, protecting California’s children.  

Operators would be required to pay an operator fee, player winnings would be reported as taxable income and all bank accounts, servers and operating personnel would be located in California.

Recent public opinion research demonstrates overwhelming support – 66 percent of California voters support the state legalizing, regulating, and taxing the profits of online poker in California and establishing strong safeguards and consumer protections.  California’s voters also want to see our own trusted gaming partners – tribes and card rooms as operators of online poker rather than out-of-state or off-shore companies by even larger margins.

California is the largest, single online poker market in the country.  However, if California does not take action, we face the risk of federal legislation that would nationalize online gaming, much to the detriment of the Golden State.

Just last month Nevada gaming interests were pushing federal legislation that would grant them the first online gaming licenses and shut out other states including California for a period of two years, allowing them to capture the market.  Thankfully, they were not successful as it would have cost California dearly. At a time when funding for schools, public safety, health care and other vital public services are being slashed, we cannot afford to allow California jobs and revenue to be exported out of state.

Passing SB 40 will ensure that we keep our jobs and our revenue here in California.  It can help protect public education, law enforcement and health care services while establishing accountability and appropriate regulation to protect Californians.  I encourage people to learn more and get involved by visiting AllinforCalifornia.org.


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