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Assemblyman Adam Gray’s bill, AB 2863, which will regulate online gambling in the state has been approved by the California Assembly Governmental Organization Committee on April 27th 2016.After over two hours of testimony from industry professionals and representatives, the bill was approved in an 18-0 result. This result excludes just one factor of the bill that could not be agreed on, the bad actors clause.
What is the bad actors clause?
The fairly quaint term ‘bad actor’ in this context refers to any online gaming company that continued operation after the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in 2006.Under the bad actors clause within AB 2863, would prohibit, or at least limit the participation of such parties in the state’s newly legal online gaming operations. 
This is a clause that has precedent, with the three states that have already legalised online gambling, namely Nevada, Delaware, and New Jersey, all included a variant of this bad actors clause within their regulations.The dispute over this clause is whether to carpet ban all bad actors without taking anything else into account, or whether to deal with each entity described as a bad actor individually, and choose the most suitable path based on this information.
What’s next?
The one-word answer to that is nothing, at least not until the bad actors clause debate has been resolved, until then there is very little to be done.However, this problem is not insurmountable, and Gray has some strong support, including racetracks, who Gray has promised $60 million a year from gambling revenue. This promise is including in the bill itself, and has had the desired effect, with almost all race tracks supporting AB 2863.