California Online Poker Coming in 2015 … Or 2016 … Ok, Maybe 2018

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Lawmakers shelved California’s two online poker bills this year citing the need for “patience,” to make sure they “get it right.” This is an excellent sentiment, we should strive to get laws “right,” and one I would wholeheartedly agree with if California hadn’t spent the past five-plus years trying to get it right. Patience is fine, but what California is doing is more along the lines of procrastinating. So when will a bill legalizing online poker pass the California legislature? According to industry experts and analysts it could be next year, or it could be as far away as 2018. In a recent conference call, Caesars Entertainment CEO Mitch Garber touched on California (prompted by a question from Adam Krejcik of Eilers Research) saying, “We’ve already started our lobbying effort for 2015 quite heavily,” adding that they want a bill passed in California and they “expect in 2015 that it’s going to become a reality.” But Garber’s optimism is not shared by some others, who feel the numerous interests are further apart than Garber believes them to be. One such naysayer is the poker media outlet iGamingPlayer.com, which published an article citing 2018 as a more likely target date due to the recent and impending departure of several key online poker advocates from the legislature. Most notably among iGamingPlayer’s concerns is the indictment of former online poker champion Assemblymen Roderick Wright, and the upcoming retirement of Senator Lou Correa, the author of the failed Senate Bill 1366 this year. The article makes several solid points, but as some pointed out on Twitter, the 2018 date seems somewhat arbitrary. California’s size is working against it The fact of the matter is that California’s politics are a bit more cumbersome than other states’ and the state’s size makes even the most mundane policy changes difficult – and for what it’s worth, online poker is far from mundane. California is the size of most countries, and has a similar population to Poland (38 million). In fact, California has more residents than the country of Canada, which boasts a total population of just 34 million. Furthermore, California’s economy is the 8th largest in the world, and accounts for a massive 13% of the U.S. GDP. Basically, we are not dealing with a typical state legislature, we are dealing with a legislative body that is more along the lines of parliament and one that has to consider many conflicting points of view and interests. San Diego’s interests are about as closely aligned to San Francisco’s as Boston’s are to Baltimore’s, which means California’s 40 Senators and 80 Assembly members have conflicting goals, and the one size fits all approach that often works in other states simply falls flat in California. California’s gaming interests are divergent In addition to its size working against it, California also has a rich history of gaming with different blocs all trying to maintain their hold on their piece of the pie. The power players want to keep the power and the second and third tier entities want to increase their power. The state has five layers of gaming interests:
Large tribal casinos
Card rooms
Small tribal casinos and non-gaming tribes
Race tracks
Lottery The issues that must be resolved will require the appeasement of each of these groups sans the state lottery, and perhaps race tracks. The large tribal casinos are the only entities allowed to offer comprehensive gambling in the state and they want to keep it that way. Large tribes are not going to sign off on an online poker bill that is more beneficial to the groups beneath them than to themselves. Card rooms are just that, casinos that are able to offer a variety of different card games, mainly poker. The larger card-rooms see online poker as a way to increase their revenue, brands, and player pools, while the smaller card rooms are fearful that high licensing costs and strict restrictions may shut them out completely. Smaller and out of the way tribes (where a mega-casino simply would not work) can also offer comprehensive gambling if they desire, or, if they limit their number of machines, or if they do not offer gaming whatsoever they are able to draw from a fund setup by the state and contributed to by the larger gaming tribes. The smaller tribes want any online poker bill to include a new or amended revenue sharing deal to make sure they continue to benefit from the larger or better-placed tribes gaming windfalls. Race tracks feel they are being left out of the mix, as the bills introduced in 2014 would not allow them to even apply for a license, even if they could somehow come up with the money to do so. Unlike smaller tribes that could receive revenue sharing or smaller card rooms that may be able to finagle a bill that would allow skins to be created, if the race tracks are left out of the bill they are out. All things considered, it’s really not surprising that California is currently batting 0-6 on passing an online poker bill since 2009. Photo credit: Shutterstock Previous Post Next Post About Steve Ruddock Steve Ruddock is a longtime member of the online gambling industry. He covers the regulated US online casino and poker industries for variety of publications, including OnlinePokerReport.com, PlayNJ.com, USPoker.com, and USA Today.

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