On 2006, the United States Congress banned online gambling in this country. However, under the 10th Amendment of the United States Constitution, each state is free to make its own laws on the subject of online gambling within the confines of its state lines.
In California, online gambling for online sports betting such as horse racing is presently legal provided the player is at least twenty-one (21) years of age and the gambling operators are licensed under California Penal Code section 19850. Charitable events are allowed to have gambling in this state as well for bingo, raffles and poker.
California Penal Code section 330 presently in effect states: “Every person who deals, plays, or carries on, opens, or causes to be opened, or who conducts, either as owner or employee, whether for hire or not, any game of faro, monte, roulette, lansquenet, rougeet noire, rondo, tan, fan-tan, seven-and-a-half, twenty-one, hokey-pokey, or any banking or percentage game played with cards,dice, or any device, for money, checks, credit, or other representative of value, and every person who plays or bets at or against any of those prohibited games, is guilty of a misdemeanor, and shall be punishable by a fine not less than one hundred dollars($100) nor more than one thousand dollars ($1,000), or by imprisonment in the county jail not exceeding six months, or by both the fine and imprisonment.”
Since the game of poker played with cards is based upon a fixed rate that is “raked”, online poker is technically illegal in the State of California at this time under California Penal Code section 330 but online sports betting is not legal in California even though the above statute does not mention online gambling within its language.
A game relying on a “rake” is a game where the “house” receives money that is being gambled based upon a certain percentage of the bets received in a game. Such a game where a “rake” is present is illegal in California. Such games are poker, craps, black jack and others where the “house” stands to gain a percentage of what is being gambled.
Presently, California’s legislature has under consideration SB (Senate Bill) 1366 and AB (Assembly Bill) 2291 which would regulate online poker but all other casino games as defined under California Penal Code section 330 would remain illegal.
Ways around California’s definition of illegal gambling under California Penal Code section 330
In 1999, California’s Court of Appeal in Sutter’s Place Inc. v. Kennedy (1999) 71 Cal. App. 4th 674 reversed the County of Santa Clara’s trial court’s ruling that a card operation violated California Penal Code section 330 where the “house” only collected a fixed fee from each hand and not a percentage of the amount that was bet. The Court of Appeal reasoned that since the house did not get a “percentage” of the pot that was placed, there was not violation of California Penal Code section 330.