Steve Ruddock California online poker stalemate

California’s decade long effort to legalize online poker could soon come to a head. Instead of the long-sought consensus (believed to be the only way to get a bill passed in California), the entrenched sides could be on a collision course that would test each side’s collective political power.

After the unveiling of an amended version of Adam Gray’s online poker bill AB 2863, both sides in this fight staked out their ground last week. Despite the numerous compromises put forth by Gray and other members of the California Assembly, the Pechanga coalition is unmoved, and still opposes multiple aspects of the bill.

On the other hand, the coalition of the willing (a name several members have taken to calling the alliance) has coalesced and appears stronger than ever.

What’s unknown at this point is whether or not this growing coalition can overcome Pechanga’s political clout.

The narrative all along has been that a bill cannot pass without Pechanga’s support, as Pechanga and its allies are believed to have enough sway in Sacramento to kill the bill if they withhold support, something made easier due to online poker legalization requiring a two-thirds majority to pass in the California legislature.

However, this widely accepted narrative – Pechanga withholding support means no bill will be passed – may soon be put to the test. As I reported at OnlinePokerReport.com this morning, the notion that all sides must sign  off on the bill is no longer accepted, and may be challenged.

Pechanga’s opposition stance

On Friday afternoon, Dave Palermo, writing for OnlinePokerReport.com, reported on the Pechanga position, including the in-depth letter the coalition sent to members of the Assembly.

Not only did Pechanga and its five remaining allied tribes express their opposition to the suitability compromise that has been inserted into the bill to deal with the thorny issue of PokerStars, but they also questioned the proposed tax rates the bill now contains, saying this issue would also need to be discussed further.

The Pechanga coalition’s opposition to the PokerStars compromise was not unexpected, but its added opposition and calls for further discussion on tax rates may have been a misstep. The request for further discussion has been a familiar refrain from this group over the past several years, and may be growing old.

The coalition of the willing stance

Hours later, a statement of support sent by an expanded coalition of the willing was posted on OnlinePokerReport.com.

Unlike the Pechanga letter, the support letter sent by a large coalition of tribes, card rooms, horseracing, and unions was short and sweet:

“The undersigned are in support of moving AB 2863 and look forward to continuing the dialogue. We have been working with the Legislature for many years to create a regulatory structure for iPoker, an online version of a game that is already authorized in the California Penal Code.

We look forward to your support of moving AB 2863.”

What’s different this time

Last year there were similar whispers that the coalition of the willing would try to ram home the bill over the protestations of the Pechanga coalition. These efforts never even got off the ground.

But 2016 is a bit different.

The size and breadth of this newly-formed coalition calls into question the political muscle of Pechanga, and Pechanga’s seeming unwillingness to budge an inch could be exacerbating lawmakers.

Size matters

First, the coalition supporting online poker has grown, both in size and political power.

The group is no longer simply PokerStars and its allies, but now includes the horseracing industry and unions, as well as several new tribes and card rooms, including the Sycuan Band, which had previously been aligned with Pechanga on this issue. According to the legislative source I spoke with, more tribes and card rooms are expected to come out in support of the bill in the near future.

In addition to the overall size of the coalition, there was also a melding of politically powerful interests. Last year there were three distinct groups, all of which purportedly possessed the political clout to stop an online poker bill from passing:

  1. Pechanga and its tribal allies;
  2. The horseracing industry and unions;
  3. The coalition of the willing, the PokerStars coalition and the RAP coalition.

In 2016, two of these groups have joined forces, and three equally (or close to it) powerful sides have become two, with one side (the coalition of the willing) ostensibly holding more sway than the other.

There were 21 signatories on the most recent letter of support:

  • Bo Mazetti, chairman, Rincon Band of Luiseño Indians
  • Gene Whitehouse, chairman, United Auburn Indian Community
  • Robert Smith, Pala Band of Mission Indians
  • Lynne Valbuena, chairwoman, San Manuel Band of Mission Indians
  • Robert Martin, tribal chairman, Morongo Band of Mission Indians
  • Haig Papaian, chairman & CEO, Commerce Casino
  • Ron Sarabi, general manager, Hawaiian Gardens Casino
  • Hashem Minaiy, managing general partner & CEO, The Bicycle Hotel & Casino
  • Nick Menas, vice president, corporate development and government relations, Amaya / PokerStars
  • Nick Coukos, president, Thoroughbred Owners of California
  • Josh Rubinstein, COO, Del Mar Thoroughbred Club
  • Doug Burge, president, California Thoroughbred Breeders Association
  • Barry Broad, legislative representative, The Jockeys Guild
  • Chris Korby, executive director, California Authority of Racing Fairs
  • Barry Broad, legislative director, California Teamsters Public Affairs Council
  • Alan Balch, executive director, California Thoroughbred Trainers
  • Brad McKinzie, general manager, Los Alamitos Racing Association
  • Rene A. Bayardo, government relations advocate, SEIU California
  • Stephen Chambers, executive director, Western Fairs Association
  • Cliff Munson, president, California Fairs Alliance
  • Ted Kingston, owner, Lake Elsinore Casino

If a bill can be passed without Pechanga’s support, this seems like the coalition to do it.

On the flip side, if this group can’t push a bill across the finish line, it’s doubtful a coalition strong enough to bypass Pechanga and company could ever be formed.

No boxes left unchecked

On top of a stronger coalition, there is also a better delivery vehicle in 2016.

In 2015, the state’s online poker bill was a two-page placeholder with no real policy specifics. So, there wasn’t really anything to ram home.

This year’s online poker bill is a different story. The bill is 100 percent complete, and as I intimated above, the legislature has presented a solution to each of the issues the Pechanga coalition has raised concerns over. What lawmakers have faced is a tribal coalition unwilling to even entertain these proposals.

Considering the legislature has pretty much ticked off every box when it comes to reaching a compromise, some lawmakers may now start to look at the Pechanga coalition’s opposition with a newfound skepticism.

It’s one thing to say you want a bill, and to fight for certain provisions you feel are warranted. It’s quite another to find fault in every solution presented and to continue to stall for more time and discussion after 10 years of discussions.

So once again, as I asked in March of 2015, are Pechanga and its allies simply obstructionists? And if so, has the legislature caught on to their ruse?

Upshot

The bottom line is this: If the legislature concludes that Pechanga is going to oppose any bill put forth that is not word for word what Penchanga wants, California’s online poker factions could be, in the words of ELO, “heading for a showdown.”

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.