Will California Block PokerStars If Online Gambling Is Legalized?

One of the biggest stories in the online gambling world was the Black Friday poker scandal, which occurred three years ago in April 2011.  Black Friday was the day the US government used the Unlawful Internet Gambling Enforcement Act (UIGEA) to crack down on offshore online gambling domains operating within US borders.

Unlike in Canada where online gambling is accepted, the US remains a very strict anti online gambling jurisdiction at the national level.  The government forced PokerStars out of the US market, while seizing the domain of sister site Full Tilt Poker – which was later acquired by PokerStars to relaunch overseas again.

Since Nevada legalized online poker in 2013, PokerStars has tried to reenter the US market on a state by state level.  Nevada included a “bad actor clause” that banned PokerStars from the market, while Delaware and New Jersey regulators blocked PokerStars from acquiring an online gambling license.

California is the next major state that is seriously considering legalizing online gambling, and is considering a number of potential operators should the market go legally live.  There are over 38 million people living in California, and PokerStars expectedly put in an application for an online gambling license.

However, a number of groups including tribal gaming organizations are lobbying the California legislature to reject PokerStars.  These organizations encourage California to include the bad actor framework used by Nevada to block PokerStars from servicing California if online gambling is made legal.

The tribal groups are using language in the UIGEA to make their case.  When the UIGEA became law in 2006, the terms stated that firms were prohibited from “knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet.”

PokerStars allowed US players to continue accessing the site until Black Friday in 2011, and California’s tribal gaming groups believe lawmakers should use this fact to justify banning PokerStars.  PokerStars is hitting back by stating the law prohibits online gambling, while the definition of poker as a form of gambling remains unresolved in legal terms.

It should be noted that the definition of poker as a game of skill or gambling is still a pretty hot topic in the courts and is far from resolved.”

If California does legalize online gambling and PokerStars is restricted from accessing the market, the world’s largest online poker room should expect an ongoing and complicated fight to reenter the world’s largest untapped online poker market.

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