The passage of an online poker bill in the California legislature before the end of the current session seems increasingly iffy.
An informational hearing last week of the Assembly Governmental Organization Committee assembled many of those who have an interest in iPoker, but also highlighted how far apart the factions are. The hearing was entitled, “The Legality of Internet Poker – How Prepared is California to Regulate It?”
Several interests spoke at the hearing, including tribal casinos, racetracks and card rooms.
According to Chairman Adam Gray, “There is much more to be done before a bill is ready to be sent downstairs requesting the governor’s signature.” He said he was looking at the issue without prejudice, but added, “each year the California legislature and various gaming interests fail to agree on an iPoker bill, not only does it put consumers at risk while gambling on illegal offshore websites that provide few protections and regulations, but the state of California is also losing out on collecting revenue that might be used for essential programs like public safety, health care, social service and education.”
He mentioned the “bad actor,” clause that has caused so much controversy, pitting one consortium of iPoker supporters against another. The coalition head by the Pechanga Bad of Luiseno Indians wants a “bad actor” clause to lock out PokerStars, which allowed American players to gamble on its site when the U.S. Justice Department held that such activity was illegal.
Pechanga’s view was held up by Jeff Grubbe, chairman of the Agua Caliente Band, who railed against “foreign interests” and those who “violated U.S. laws,” aiming his criticism against Amaya, which purchased PokerStars last year.
The San Manuel Band of Mission Indians takes the opposite view, and its chairman, Lynn Valbuena, argued for letter regulators determine who and who is not qualified to be granted a license.
Eric Hollreiser of Amaya noted that his company operates in multiple jurisdictions, and has never been accused of criminal activity.
PokerStars is conducting an active public relations campaign through a new website: Californians for Responsible iPoker.
The question of whether to allow racetracks a place at the table is just as controversial. They insist that they are currently the only operators in the state who legally conduct internet gaming by taking online wagers on races.
According to Mike Pegram of the Thoroughbred Owners of California, “If this iPoker will happen and horse racing is not involved in it, it will destroy the game. Because when you take the only growth segment that we have in our model and then throw direct competition on it, I don’t think the future would look very good.”
Pechanga Chairman Mark Macarro disagrees, although he is open to participation by racetracks, which would receive revenue sharing—as long as they aren’t operators.
Chris Krafcik, research director North America for GamblingCompliance, estimated that online poker could generate $217 million annually at start up and $366 when the market matures.
Other panelists noted that Nevada, New Jersey and Delaware have successfully implemented geolocation, security and age verification. Existing casinos have not suffered harm from the new form of gaming.
Because of this disparity of positions, Assemblyman Mike Gatto last week said he was cancelling hearings set for this week and dropping his bill legalizing iPoker. Gatto’s bill, AB9, was considered a “placeholder” and would have been used to frame an iPoker industry in California that would have included participation by tribes and cardrooms, but not necessarily racetracks. But the lack of agreement led to his decision to drop the bill, said Gatto.
