Steve Ruddock CA online poker regulation hurdles

[toc]California’s inability to pass an online poker bill isn’t for lack of trying. For the 10th consecutive year, the state is considering legalizing online poker.

This year’s effort (the first of several?) comes from Assemblyman Reggie Jones-Sawyer, who introduced an online poker bill, AB 1677, in February. The Jones-Sawyer bill would allow the state’s card rooms and tribes to offer legal, regulated online poker.

The Jones-Sawyer CA online poker bill

The bill is what is called a placeholder. It is designed to keep lines of communication open between the dueling stakeholder coalitions.

At the same time, the bill is quite detailed. It includes many of the compromises hashed out over the years among tribes, card rooms, and the horse racing industry.

However, it provides no resolution when it comes to the issue du jour — suitability. More specifically, the bill more or less punts as to whether the law itself should keep some so-called “bad actors” on the sidelines, or if that determination should be left up to the state’s regulators.

Even though legislators and stakeholders made some progress on this front last year, the two politically powerful coalitions of stakeholders are still miles apart. And there’s no solution in sight when it comes to suitability.

If something is going to give on the online poker suitability front, it will require a seismic change. The following possibilities are extremely unlikely, but they can’t be ruled out entirely.

A fractured online poker alliance

The first possibility is that one of the two main coalitions fractures.

On one side, there’s the PokerStars coalition, a group of tribes and card rooms that have partnered with the online poker behemoth:

  • Amaya/PokerStars
  • Morongo Band of Mission Indians
  • San Manuel Band of Mission Indians
  • Bicycle Casino
  • Commerce Casino
  • Gardens Casino

On the other side is the Pechanga coalition, which opposes PokerStars’ involvement, calling the company a “bad actor” for continuing to operate in the US after the federal government passed UIGEA in late 2006.

The Pechanga coalition’s core support comes from six tribes:

  • Pechanga Band of Luiseño Indians
  • Agua Caliente Band of Cahuilla Indians
  • Viejas Band of Kumeyaay Indians
  • Yocha Dehe Wintun Nation
  • Lytton Band of Pomo Indians
  • Barona Band of Mission Indians

And has at times consisted of:

  • Table Mountain Rancheria
  • Cachil Dehe Band of Wintun Indians
  • Paskenta Band of Nomlaki Indians

Caught in the middle is the largest group, which seems amenable to life with or without PokerStars in California.

This group consists of, among other groups:

  • The horse racing industry
  • Rincon Band of Luiseño Indians
  • United Auburn Indian Community
  • Pala Band of Mission Indians
  • The Jockeys’ Guild
  • California Teamsters Public Affairs Council
  • SEIU California

Last year, we discovered brute force was not enough to overcome either coalition, as attempts to both include and to bar PokerStars failed. This was in large part because online poker requires a two-thirds majority in both chambers of the California Legislature to pass.

For one of the groups to overwhelm another, it will need to peel off at least one of the big pieces, like Pechanga, Agua Caliente, Morongo, the trio of card rooms, or San Manuel.

PokerStars throwing in the towel

It’s no surprise PokerStars has spent considerable time and money trying to gain access to California and its nearly 40 million residents.

But the company has little to show for it other than millions of dollars in expenditures. So it wouldn’t be shocking to see PokerStars throw in the towel and divert its California lobbying dollars to more welcoming jurisdictions.

With Pennsylvania, New York, and Massachusetts exploring online poker legalization, these states may beat California to the regulation punch. Moreover, any of these states could team up with New Jersey (where PokerStars is already licensed and active) to create an online poker market even larger than coveted California.

Combined, the four states have a population approaching 50 million, and none of them have shown any interest in a California-esque bad actor clause that would keep PokerStars out of the market.

Steve Ruddock
Steve Ruddock - Steve is one of the most recognizable names in the online poker media space. He brings his deep knowledge and equally deep well of opinions to his coverage at CaliforniaOnlinePoker.com.