A couple of weeks ago we began a two-part series exploring the bad actor clause. In Part 1 we looked at arguments supporting a bad actor clause.
This week we look at the reasons why California should exclude the bad actor clause from iPoker legislation.
Regulators Should Have the Right to Determine Suitability
The argument from Day 1 by certain stakeholders has been that gambling regulators - and not an arbitrary law - should be the ones to decide whether a company is suitable to offer an online poker site in California.
We should keep in mind that many "bad actors" were acting on the advice of legal counsel and, while that information is now perceived as faulty, were their actions criminal?
Think about it a different way. The only difference between PartyPoker becoming regulated in New Jersey and PokerStars becoming regulated is PokerStars participation in the United States post UIGEA.
PokerStars has met all of its player obligations and even paid the obligations of Full Tilt once it acquired them. Does that sound like the actions of a company trying to hurt California citizens.
Let regulators investigate PokerStars and any "bad actors" that chose to operate in the U.S. after the passage of the UIGEA. If they are a threat to California citizens that information will become clear, but a company should be allowed to make its case.
The Two Primary Targets Are Now Owned by Someone Else
Let's not forget that the main companies that the bad actor clause targets were sold last year. Amaya Inc. purchased the parent company of PokerStars and Full Tilt Poker for $4.9 billion.
While it has all the assets of the former bad actors the organizational structure of those companies is now different.
As has been evident since Amaya has taken over both companies PokerStars and Full Tilt is run very differently from pre-Black Friday.
They are recreational-player friendly and focused on maintaining growth over several sectors of the gambling marketplace.
If the Oakland Raiders were sold to Mark Cuban would NFL officials treat him the same way they do Al Davis? Of course not. So why treat the Amaya-owned PokerStars the same as the Isai Scheinberg-owned brand?
Blocking PokerStars Would Hurt California iPoker
The bad actor clause only serves to block PokerStars from coming into California in an attempt to curb competition. However, those that support the clause fail to realize that an online poker industry devoid of PokerStars will struggle.
Look at New Jersey. Online poker has struggled all year thanks to an oversaturated marketplace and the failure of PokerStars to launch.
Many believe that a PokerStars launch will help to rebound the online poker industry in the state as it will heighten player awareness and increase overall promotional spend for the industry.
PokerStars is already trying to educate California citizens about iPoker regulation through its PokerStars Pro Tour and has enjoyed great success. This shows that PokerStars has the ability to mobilize players if allowed to operate in the state. It will benefit all sites, not just PokerStars.
Legalizing online poker without allowing PokerStars into the mix is a mistake that California cannot afford to make. Hopefully lawmakers and stakeholders will make the right decision and exclude such a clause in future version of iPoker legislation.