A second draft bill to legalize Internet poker in California that would include the pari-mutuel racing industry along with American Indian tribes and card rooms was introduced Thursday by Democratic Assemblyman Reginald Jones-Sawyer.

The Jones-Sawyer bill (AB167) differs from prior legislative efforts in that it extends licensing eligibility to the politically powerful racing industry. Prior draft bills limited licenses to tribal governments and card rooms.

AB 167 would require a “qualified card room, horseracing association or federally recognized California Indian tribe” to pay a $10 million license fee and an 8 ½ percent tax rate.

Momentum to include pari-mutuel racing in online poker legislation has been building since last year, when Jones-Sawyer and outgoing Senate Government Organization Committee (GOC) Chairman Lou Correa, both bill sponsors, said they welcomed debate over licensing tracks.

Gov. Jerry Brown said he would not sign an Internet bill into law that is opposed by the racing industry.

And Joe Morris, president of Thoroughbred Owners of California, said the industry would not accept a subsidy in lieu of the ability to operate a poker website.

“We want a seat at the table, on a level playing field,” Morris said. “If there are licenses out for sites, we want a site also.”

Some prominent Indian tribes contend licensing tracks would violate public policy against expanded gambling and endanger their constitutional guarantee to operate casino-style gambling.

But other tribes are not opposed to licensing tracks, at the forefront of a pari-mutuel industry that includes track owners, breeders, backstretch workers and labor unions.

“It’s the right thing to do,” said Robyn Black, president of Eclipse Government Affairs and a lobbyist for the racing industry.

The Jones-Sawyer bill also softens “bad actor” language in prior legislation intended to preclude licensing firms that took U.S. online wagers after passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006.

Amaya Gaming/PokerStars contends prohibitive “bad actor” language in earlier bills, including AB 9 introduced last month by Assemblyman Mike Gatto, was meant to keep the international online giant from competing in the potentially lucrative California market.

License suitability provisions in what is titled “The Internet Poker Consumer Protection Act” precludes licensing firms that “contemptuously defied” federal or state law.

“It encourages me,” Robert Martin, chairman of the Morongo Band of Mission Indians, said of the Jones-Sawyer bill draft.

The Morongo and San Manual Indian bands are partners with Amaya/PokerStars and three Los Angeles area card rooms (Bicycle, Commerce and Hawaiian Gardens casinos) in a coalition working to legalize online poker.

Although coalition lawyers had not yet scrutinized the Jones-Sawyer draft, Martin said he was pleased that “bad actor” language was largely eliminated.

“The fact (AB 167) has softened the bad actor (language) goes a long way” in getting coalition approval, Martin said, and may increase the likelihood of a bill being enacted in the 2015 session.

“It at least kicks the ball down the lane a little bit farther,” he said.

Martin doesn’t see the race tracks as a competitive threat to tribal and card room websites. But he does believe the racing industry’s political clout may be necessary in getting legislative approval of an online poker bill.

“The race tracks carry a lot of weight in Sacramento,” Martin said.

Mark Macarro, chairman of the Pechanga Band of Luiseño Indians, which last year headed a coalition of 13 tribes on the Internet issue, said he was “disappointed” in AB 167.

“Tribes have been steadfast in the principle that online poker be consistent with California’s longstanding public policy of limited gaming, and that means keeping it to just tribes and card rooms,” Macarro said.

“California voters have always had the final say on gaming expansion and they have already rejected expansion of gaming for horse racing.”

The chairman also said it was wrong to soften “bad actor” language in previous bills intended to “help prevent corporations and entities that previously violated federal law from profiting from tainted software, brands, and databases derived from illegal activity.”

Gatto, a champion of indigenous issues credited with passage of sacred sites legislation, said he discussed poker legislation with Jones-Sawyer last week, beginning what is expected to be a year of deliberations and new and amended bill drafts.

Isadore Hall, who last month won election to the Senate and has been appointed chair of that body’s GOC, also is expected to introduce online poker legislation.

Gatto said he hasn’t made a decision on whether racing should be included in an Internet bill.

“It’s not a simple, straight-forward issue,” he said. “What I can say is I worked at the race tracks. I know it is a very, very important, historic industry in California.

“But I talk to my friends with the tribes who remind me they have in the California Constitution an exclusive right to operate many different kinds of gaming. We have to make sure that we respect the Constitution with what we do legislatively.

“It really is a tightrope.

Gatto also said legislation should limit licensing eligibility and not leave suitability determinations solely to regulators who are not answerable to the voters.

“As legislators we have to be careful how much we leave to regulators,” Gatto said.

The assemblyman expressed confidence a bill will be enacted this year.

“We work well together,” Gatto said of Jones-Sawyer. “I would expect both bills to be a conversation-starter and it will be a long year.

“Reggie is a very smart guy. Isadore has worked with this for a very long time. I think we have the intelligence and the drive to get it done this year.”

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