After showing much promise earlier this year, many politicians in the state of California believe that the potential regulation of online poker in the state is “dead” for at least this year, even with three pieces of legislation on the table for such regulation.
The California General Assembly is set to dismiss their current session on September 6, meaning that any potential looking to pass would have to be through committee and on the floor of the General Assembly for a vote. There are three bills currently in committee or proposed on the subject of regulation of online poker – SB 678, State Senator Lou Correa’s “Authorization and Regulation of Internet Poker and Consumer Protection Act of 2013,” SB 51, Senator Roderick Wright’s “Internet Gambling Consumer Protection and Public-Private Partnership Act of 2013” and a draft bill from the California Indian tribes – but all have gotten no farther than the committee phase of the legislative process. Barring a special session of the General Assembly, these bills would have to be reintroduced in 2014 for consideration.
So what is holding up these bills? It is the usual infighting about the subject that has plagued any online poker legislation in the Golden State over the past few years. The powerful Indian gaming lobby, the California poker rooms and horse racing tracks cannot seem to come together on a plan that would provide something for everyone. The infighting reached a point in May where the Indian tribes constructed their own proposed bill mentioned above to attempt to circumvent the logjam in the discussions between the warring parties.
Back when the Indian tribes proposed bill was drafted, a letter was released that explained why they were taking that step. “Fundamentally, we felt it was important for the elected leaders of tribal governments to come together and identify both challenges and solutions presented by Internet poker,” the letter read. “Reacting to proposals by the state and commercial interests was not the best way to arrive at a set of principles and policies that protects the rights of our children, grandchildren, and future generations. Indian Country simply cannot afford to get this policy wrong and jeopardize voter-sanctioned gaming rights.”
One of the problems could also be the vast amount of money that is involved in the California live gaming scene. Tribal gaming in California brought in roughly $7 billion as recently as 2010 and the Indian tribes are looking at protecting any incursion into their revenues. Online poker, in the view of the Indian tribes, would not only cut into their profits but also deny them another revenue stream if they were not allowed to take part in the online poker market (as some bills have stated).
The potential for regulation of online poker started off well in 2013 before reaching its current (and ongoing) impasse. Wright, who long has been a proponent of online poker regulation in the state, reissued his legislation almost immediately after the start of the General Assembly session and was soon followed by Correa’s bill. As recently as May, the chances of online poker regulations passing in California were given a “50/50” shot by a lobbyist for the Indian tribes, but the parties involved (and potentially the draft bill from the Indian tribes) seem to have not been able to settle their differences.
California would be the crown jewel in any online poker operation if it were active. With its 38 million residents (the largest in the United States), the potential market would dwarf that of states that have already passed some sort of online gaming legislation (Nevada, New Jersey and Delaware). Furthermore, if one of these states – most likely Nevada – were able to partner up for an interstate compact with a California online poker operation, revenues would skyrocket for all involved. That will have to wait, however, until the factions in California can come to an agreement on how to move forward.
