California Online Poker Legislators Duke It Out with Two Pending Bills

Posted on: March 9, 2014, 05:30h. 

Last updated on: March 7, 2014, 08:34h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

A political showdown is underway between rival groups proposing the legalization of online poker in California, which has the potential to become one of the world’s biggest online gambling markets, worth hundreds of million dollars annually.

Duking It Out for Online Poker Bills

In one corner, we have Assemblyman Reginald Jones-Sawyer (D-Los Angeles) with AB 2291, which has the support of the Yocha Dehe Wintun Nation, the Agua Caliente Band of Cahuila Indians and the Pechanga Band of Luiseño Indians.

In the other, we have Sen. Lou Correa, (D-Santa Ana) with his bill, SB 1366, which has support from the Dry Creek Rancheria Band of Pomo Indians, which operates River Rock Casino in Alexander Valley, the Federated Indians of Graton Rancheria, which operates the Graton Resort and Casino in Rohnert Park, the San Manuel Band of Serrano Mission Indians, the United Auburn Indian Community, the Rincon Band of Luiseño Indians and others.

Sen. Correa is the newly named chairman of the Senate Governmental Organization Committee, which has jurisdiction over alcohol, horse racing and gambling.

Both bills aim to legalize online poker websites, but differ over certain licensing and regulatory measures. The Jones-Sawyer bill, for example, requires a new operator to make a one-off payment of $5 million following license approval; in the Correa bill, it’s $10 million.

While this time around, no recommendations have been made in either bill for the actual cost of applying for a licence, the fee was set at a minimum of $1 million in legislation that fell through last year. The Jones-Sawyer bill, meanwhile, suggests limits on the number of websites eligible to apply; the Correa bill does not.

Tribes At Top of the Totem Pole

As expected, both bills set out favourable conditions to the tribal operators who already dominate Californian land-based gaming, requiring no background checks or license fees for tribes that have been conducting poker games on their brick-and-mortar casinos for a number of years already. This should allow the local Californian operators to get a head start over international competitors in this hugely lucrative market.

Both sides admit the bills still require some tough negotiation. Last year’s proposed legislation ultimately failed when lawmakers and those representing tribal interests failed to agree on the fine print.

“There are a lot of moving parts,” said Sen. Correa. “But we will work hard, and I am hopeful.”

“As most of you know, the exact language of an introduced bill rarely if ever is what makes it through the process,” three tribal chairmen — Jeff Grubbe of Agua Caliente, Mark Macarro of Pechanga and Marshall McKay of Yocha Dehe — wrote Feb. 21 to other tribal leaders.The three are among those who support the Jones-Sawyer bill.

“We fully expect the bill to evolve as our conversations continue,” they wrote.

According to a report prepared by Academicon and PokerScout in December 2013, the legalization of poker in California would generate $263 million in revenue the first year and some $384 million per year within a decade. It’s estimated that there are somewhere between 750,000 to 1 million online poker players in California – the latter figure equating to the entire population of Delaware.

However, online poker’s detractors have questioned those numbers, citing the fact that New Jersey Gov. Chris Christie estimated the state would receive $200 million this year – a figure that has now been more realistically recalculated at $34 million.