Steve Ruddock

The California legislature is starting to get bogged down with online poker legislation, as three bills have now been introduced in the Assembly, along with another one in the State Senate. The latest bills (identical to one another) were introduced jointly by State Senator Isadore Hall III and Assemblyman Adam Gray, as a compromise between Mike Gatto’s AB 9 and Reggie Jones-Sawyer’s AB 167.

The  announcement of Hall’s/Gray’s “compromise” bill was made during a period of turmoil in California gaming. The tribal faction that formed last summer to oppose PokerStars has splintered, and at the same time both gaming tribes and card rooms have rekindled their long held contempt for one another after tribal gaming accused card rooms of having lax regulations and the regulatory regimes themselves were full of systemic corruption – accusations the card rooms pushed back on.

And then there is the not so small matter of the inclusion/exclusion of the racing industry, without whose support a bill is unlikely to pass – California Governor Jerry Brown said he would not sign any bill not supported by racetracks.

This is not a heavyweight fight with two equally matched fighters squaring off against one another. This battle more closely resembles a WWE Battle Royale, with multiple fighter all in the ring at the same time.

I count at least five different factions.

Morongo, San Manuel, Commerce, Bicycle, Hawaiian Gardens

The PokerStars coalition (Morongo Band of Mission Indians, San Manuel Band of Mission Indians, Amaya Gaming/PokerStars, Commerce Casino, Bicycle Casino, and Hawaiian Gardens Casino) unsurprisingly opposes any type of Bad Actor or Tainted Asset language in the bill. The group’s mantra all along has been, “let the regulators regulate.”

The coalition is also on board with a fully inclusive bill that includes allowing racetracks to apply for licenses.The coalition issued the following statement after the introduction of AB 167 [bold mine]:

“… we are encouraged that his approach will move the discussion of online poker forward in a positive direction. The bill seeks to establish a vibrant, competitive, fully inclusive marketplace with choices for consumers that enacts strong consumer protections; requires strict oversight and regulation of operators and licensees; and ensures a financial return for the state.”

Coalition POV: Vehemently opposed to any Bad Actor and Tainted Asset clauses; in favor of allowing racetracks to be licensed. 

Rincon, UAIC, Pala

The Rincon Band of Luiseño Indians, Pala Band of Mission Indians, United Auburn Indian Community, and I will also include (partnered with the UAIC tribe) and Caesars Entertainment (partnered with the Rincon tribe) in this group are very close to the PokerStars coalition.

However, while their message is similar to the one being espoused by the PokerStars coalition it is not quite the same.

The “RAP” coalition (and separately Caesars) came out in favor of allowing racetracks to apply for online poker licenses and seem to be for scrapping most of the Bad Actor clauses. On the other hand, while they significantly softened their stance when it comes to Bad Actors, their statement regarding Tainted Assets didn’t go quite as far.

Here is what they actually said in their letter:

“Use of assets developed through unauthorized Internet gaming. We recognize that this is an important issue that remains to be resolved, with different approaches reflected in your respective bills. While we have not yet identified a possible consensus position, we encourage continued conversation on this important issue to identify an approach based on considerations of fairness, regulatory integrity, and legal requirements at issue.”

Coalition POV: Against Bad Actor clause, unclear on Tainted Asset clause; in favor of allowing racetracks to be licensed. 

Other Card Rooms

There is also some confusion as to where the non-PokerStars aligned card rooms stand on Bad Actors and racetracks, as there was mention of a coalition of 24 card rooms signing off on the RAP letter In several outlets.

I was told this is not the case by a spokesman for these card rooms. Here is the official statement:

“On February 10, 2015, the Rincon, Auburn and Pala tribes (“RAP”) published a letter to Assemblyman Gatto and Assemblyman Jones-Sawyer calling for compromises in order to gain the passage of internet poker legislation.

“The report from that up to 24 card rooms endorsed the RAP letter is inaccurate. While a number of card rooms agree with that proposal, some are still studying the letter and proposed changes, and will come to their own conclusions during the legislative process.”

According to David Fried, a gaming attorney who works closely with California card rooms, the card rooms do not have an issue with tracks applying for licenses, but they have not, as some are reporting, come to any type of consensus on Bad Actor/Tainted Asset clauses.

In 2014 a group of 24 card rooms (likely identical or near identical to the 2015 group referenced in the RAP letter) led by Hollywood Park and Hustler Casino issued a statement that called for an inclusive bill, allowing all card rooms the chance to apply for online poker licenses, as well as calling for strict Bad Actor/Tainted Asset language.

Coalition POV: Unclear on Bad Actor and Tainted Asset clauses; in favor of allowing racetracks to be licensed. 

Race tracks

Racetracks are only demanding one thing: Involvement.

As Dave Palermo reported at, Joe Morris, the President of Thoroughbred Owners of California, said of the group’s position, “We want a seat at the table, on a level playing field,” Morris went on to say racetracks wanted the option to apply for licenses and not receive a tax subsidy, “If there are licenses out for sites, we want a site also.”

Racetracks have been silent on Bad Actor clauses, which might signal that they are amenable to a bill with or without Bad Actor language.

Coalition POV: Unclear on Bad Actor and Tainted Asset clauses; in favor of allowing racetracks to be licensed. 

Pechanga and Agua Caliente

Last but certainly not least is the now splintered tribal coalition headed by Pechanga and Agua Caliente. Both of whom seem rigid in their opposition to Bad Actor clauses and racetracks, having issued the following statements after the introduction of Reggie Jones-Sawyer AB 167.

Pechanga Chairman Mark Macarro had this to say about AB 167 in a statement:

“There is much for tribes to dislike about this bill. [AB 167]

“We are disappointed that the bill disregards important principles from a broad coalition of respected tribes and card rooms that help prevent corporations and entities that previously violated federal law from profiting from tainted software, brands, and databases derived from illegal activity.

“Tribes have been steadfast in the principle that online poker be consistent with California’s longstanding public policy of limited gaming, and that means keeping it to just tribes and card rooms.  California voters have always had the final say on gaming expansion and they have already rejected expansion of gaming for horse racing.”

Agua Caliente Chairman Jeff L. Grubbe also issued a response to AB 167:

“The Agua Caliente Band of Cahuilla Indians supports limited internet gaming in a manner we believe to be consistent with the intent expressed by the voters. Our Tribal Council has spent a tremendous amount of time over the past three years working to build a broad coalition of California Tribes and card clubs on a united effort towards this goal.

“The voters have approved a constitutional amendment authorizing casino-style gaming on tribal lands with a loud YES and they have rejected an expansion of those games to racetracks by a resounding NO.

“Accordingly, we worked with Mr. Jones-Sawyer on legislation last year that would have authorized limited iPoker to licensed California Tribes and cardrooms. We built a large coalition, but ran out of time in the legislative session. We did not, and do not, support expanding gaming to horseracing facilities, nor do we believe that gaming corporations that have previously “violated federal law should be able to profit in the state of California from the use of software, brands and databases that were used for illegal activities. Furthermore, we believe that state law should provide clear standards for eligible licensees.

“We respect Mr. Jones-Sawyer, but we strongly disagree with this effort. No iPoker in California is the clearly preferable option in our view to this scheme, which will clearly divide Indian country. We urge him to not pursue this bill.”

Even though Rincon, Pala, UAIC, and San Manuel have split off from the Pechanga coalition, as long as Pechanga is at the vanguard this is a politically powerful group.

It’s unclear where the other tribes that signed on last year stand on this issue, as they have not issued statements or added their names to the Pechanga or Agua Caliente statements.

Coalition POV: Steadfast desire for Bad Actor and Tainted Asset clauses; opposed to racetracks being able to apply for licenses. 

Steve Ruddock
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