Two more bills to legalize online poker have been filed in the California legislature, bringing the number of active bills to four. This is the sixth year that online poker has been a subject for debate in the Golden State’s legislature.
The new bills are actually identical, but they are being filed separately in the Senate and the Assembly. The new bills’ sponsors are Senator Isadore Hall (SB 278) and Assemblyman Adam Gray (AB 431).
They issued a joint statement last week: “The issue of iPoker in California has historically been divisive; dealing legislators, the governor and the public a folding hand. It is time to work together, stop bluffing and take control of this issue. Our bills do not create winners and losers. Our bills do not take one entity’s side over another.”
Filing bills is the easy part. The hard part comes with pounding together some coalition that will be able to overcome the political objections that different groups have to competing bills and forge a bill that can pass both chambers.
As it has from the beginning, the participation by PokerStars and its partners the Morongo Band of Mission Indians, San Manuel Band of Mission Indians, Commerce Club, Hawaiian Gardens Casino and Bicycle Casino remains the main sticking point.
The “bad actor” clause in two of the current bills clearly targets PokerStars, which the Justice Department accused of allowing American players to participate in offshore real money games after Congress had banned such games in 2006. PokerStars never admitted to wrongdoing but did reach a settlement with Justice.
PokerStars and its allies contend that Congress actually banned online gambling in 2006 when it passed the Unlawful Internet Gambling Enforcement Act, but did not ban betting on games of skill, such as poker.
The tribes that want to bar the door to PokerStars include the Pechanga Band of Luiseño Indians and the Agua Caliente Band of Cahuilla Indians. Their bill of choice is the one introduced first by Assemblyman Mike Gatto.
The second bill to be introduced was authored by Reggie Jones-Sawyer. It does not have a “bad actor” clause, but would instead allow the California Department Justice to vet each applicant for a poker license for suitability.
PokerStars recently formed an alliance with Caesar Entertainment Inc. to promote online poker throughout the U.S. This involved Caesars dropping its insistence that “bad actor” clauses should be included in state laws that allow the games.
In an interview last week with PokerNews, Caesars Vice President Jan Jones Blackhurst argues that the purchase by Amaya of PokerStars last year accomplished, “a total cleansing of the company.” She added that PokerStars is less of a threat to other potential licensees because its well-known (and feared) customer database is less up-to-date than it once was since it was forced out of the U.S. market after Black Friday, 2011.
The new bills’ details are not available, but the pro-PokerStars coalition hope one or both will have something for them.
Matthew Cullen, chief operating officer of online business for the San Manuel tribe told the Sacramento Business Journal, “Our coalition is hopeful that these bills are going to be favorable.” He added, “Anything related to who is suitable and not suitable to operate online poker should be left up to regulators to decide, not the legislators.”
As much as some tribes want to lock the door to PokerStars, some other gaming tribes are equally vociferous about not allowing the Golden State’s racetracks to participate. Gatto’s bill effectively excludes them by requiring physical registration at existing card rooms and casinos, but not racetracks.
Jones-Sawyer’s bill includes participation by the racetracks.
The new bills may have a better chance of moving onto the floor because Hall and Gray are both chairmen of the committees that control gaming and both are considered key lawmakers in the legislature.
Gray emphasizes that it is necessary to legalize online poker because so many California consumers already play and that the only way to protect them is by bringing the practice under the umbrella of the law.
“We need to crack down on illegal online gaming and replace it with a safe and responsible entertainment option for adults, which includes safeguards against compulsive and underage gambling, money laundering, fraud, and identity theft,” he told the Business Journal.
At the recent Western Indian Gaming Conference, Robert Martin, chairman of the Morongo tribe, called for compromise among the tribes trying to legalize i-poker. He told the Press Enterprise: “There has to be a compromise or it won’t get done. At the end of the day, we all want what is best for the tribes.”
Previous to those comments, the chairmen of three gaming tribes, the Rincon band, the United Auburn Indian Community and the Pala Band, indicated that they were willing to compromise in order to pass a bill and support AB 167, authored by Jones-Sawyer.
In a letter sent to the legislature they emphasized that individuals rather than companies should be the focus of investigations to determine the suitability of licensees. They wrote: “Under this approach, those persons with control over a licensed operator, service provider, or marketing affiliate could not include any person who has personally participated in unauthorized gaming.”
They added, “This approach strikes a balance between the state’s need to ensure that persons who willfully defy/defied gaming laws not be permitted to jeopardize the integrity of internet poker in California while recognizing that control of an entity may change over time that resolves regulatory concerns.”
They also support widening participation. “We support the approach of AB 167 in permitting horse racing associations to be eligible for internet poker operator licenses on the same terms as eligible tribes or card rooms,” they wrote.
Since Caesars, through Harrah’s, operates Rincon’s casino in San Diego County, the evolving attitude of that tribe’s chairman, Bo Mazzetti and Caesars cannot be seen as happening in a vacuum. Jones Blackhurst acknowledged as much in her interview when she said, “the tribes call the shots.”
Meanwhile, Pechanga appears to believe that it holds the winning hand in the ever-changing political picture and some state officials have privately said that there will be no bill without that tribe’s participation.
Anita Lee of the Legislative Analyst’s Office told Capitol Public Radio that one of the greatest challenges for legalizing online poker in the Golden State will be to set up sites that players will prefer to the existing illegal sites.
Poker Players Alliance has estimated that 15 million U.S. residents, many of them in California, currently play real money online poker on unregulated offshore sites. Proponents of iPoker claim that a legalized version could generate $845 million in taxes for the state and create over 2,600 new jobs.
“If you’re choosing between player experiences you’re likely to go with the experience that’s easier to manage, easier to figure out, has less sign-ins or registrations and things like that,” said Lee.
Some political observers urge quick action on poker this year to preclude Congress from acting on the urgings of gaming magnate Sheldon Adelson of Las Vegas Sands, who has vowed to spend whatever it takes to persuade Congress to ban online poker nationwide.
