In this new series Ill be dissecting the different arguments being made in regards to legalizing and regulating online poker, in an attempt to try and get to the underlying truth. Ill take a look at the arguments both for and against online gambling, and see if we can toss the rhetoric aside and look at the situation on the ground. The first topic up for discussion is the argument that online gaming is impossible to regulate and police due to the anonymity of the Internet. A favorite Argument For iGaming Opponents Since their movement to ban online gambling began late in 2013, Sheldon Adelson and the Coalition to Stop Internet Gambling (CSIG) have offered up many hypothetical situations detailing how the anonymity of the Internet could be used for nefarious purposes. Truth be told, Adelson and the rest of the opposition to iGaming have been winning this argument all along, playing on the fears of lawmakers and the general public over the anonymity of online gaming, and how it will lead to money laundering and create easy access to gambling for problem gamblers and children. A favored line of Adelsons is that he can see if a person is drunk or underage in one of his casinos; something that cant be done online. This line of attack usually causes online gaming advocates to start shining a spotlight on Adelson and brick & mortar casinos failings on this front, which in my opinion is not the best counterargument to make. While its fun to do and is a valid criticism, most of our energy has been spent pointing out Las Vegas Sands own issues with money laundering and underage gambling, and thus leads to the inevitable cat calls of hypocrite and fraud directed Sheldon Adelsons way. However, this is basically reinforcing Adelsons message by implying its not just an online issue but also a brick & mortar issue. Instead of pointing out the safeguards that are in place we tend to point out how other industries are not perfect on this front either. So, while we are launching ad hominem attacks against Adelson and CSIG, we do little to assuage the actual concern he is raising, and its the perceived anonymity of online poker among the public that allows Sheldon Adelson and his Coalition to Stop Internet Gambling to drive their message home. So lets take a look at just how anonymous people are on the Internet, and how we should be countering this claim. Youre Not As Anonymous As You Think The other argument that could be used to rebut concerns over money laundering and access to problem and underage gamblers (the anonymous Internet), is to point out that while the Internet does provide a certain amount of anonymity between players, you are for all intents and purposes an absolute open book when it comes to what the online poker site and the regulators can see. While every other player at the table may not know anything about AlwaysBLUFF other than his general location, the site has verified that persons name, age, and home address. They have a credit card or payment option on file for AlwaysBLUFF. They can quickly pull up every bet AlwaysBLUFF has ever made on the site, that persons deposit and withdrawal history, the number of hours they have played, and any other scrap of information they may need. The Internet may provide a single layer of anonymity, but licensed and regulated online poker sites have access beyond that top layer, to layers that leave a paper trail a mile long that can be traced and followed. They can see where you are logging in from, see if your betting habits suddenly change, track the amount of money you deposit and withdraw, and so on. In the same ways a bank can alert you to potential fraud, an online gaming site could alert players to the same. Is it foolproof? Of course not. Anyone who really wants to hack the game system will find a way, just like anyone who wants to mark cards in a casino can still go and do it if they really want to. But, just like marking cards, we can now hold people accountable for their actions online. A minor using a stolen credit card or stolen Social Security Number to create an online account has broken laws and will be punished if they are caught. Someone trying to launder money online faces the same consequences as someone trying to launder money through some other channel. The penalty for breaking these laws is our recourse and the main deterrent, just as they are in a land-based casino and every other walk of life. Not every criminal, tax evader, and law breaker is caught. Verdict Sheldon Adelson is 100% correct. People can create an account and then hand their phone off to a 16 year old kid to play. Someone desperate enough could steal someone elses SS# and open an online account. A child could figure out their parents online password and use their account. But An adult could also purchase alcohol and give it a minor. Someone could steal your credit card and buy items at Best Buy or Target. A child could figure out their parents password for eBay or Amazon, or their Debit Card PIN and do just as much if not more financial damage. Nothing is foolproof. The safeguards currently in place remove the layer of anonymity that online poker players had before regulations, and the punishments for people breaking these laws are more than enough to protect the integrity of the industry 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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Progress has been made on a number of fronts in California but it doesnt appear a compromise on Bad Actor clauses is coming anytime soon. In a lengthy interview with iGaming Business, Pechanga Band of Luiseno Indians Chairman Mark Macarro stated the purchase of PokerStars by Amaya Gaming changes nothing, when it comes to PokerStars potential involvement in California iPoker. Macarros full, yet concise response was, Nothing. Thats my one-word answer. Nothing, which along with several utterances (four in fact, which you can see below) of, strictly limited and regulated online poker, seems to indicate little has changed from the summer. The Pechangas are just one of 13 tribes that coalesced around their opposition to PokerStars and their quartet of partners, the Morongo band of Mission Indians, Bicycle Casino, Commerce Casino, and Hawaiian Gardens Casino. While the Bad Actor / Tainted Assets debate is a major hurdle (one of three Macarro cited in the interview), there are also several other issues that will also need to be sorted out, including who will be allowed to participate in the California online poker industry and who will be left out in the cold. The Bad Actor Debate Could Be Settled 3,000 miles Away Oddly, Californias final decision on PokerStars will likely be heavily influenced by the outcome of PokerStars license application 3,000 miles away in New Jersey. While PokerStars is calling for lawmakers to craft a bill that would leave their potential involvement in the hands of regulators (as it is in New Jersey), PokerStars opponents want that decision made at the legislative level and included in the bill (as it is in Nevada). The general consensus seems to be that if PokerStars is approved by the New Jersey Division of Gaming Enforcement (NJ DGE) it will help quell the opposition in California. Conversely, if for some reason PokerStars is denied a New Jersey iGaming license (which seems unlikely but not out of the realm of possibility), their chances in California would suffer a crushing blow. A lot of this will come down to timing. If PokerStars is approved by the NJ DGE prior to bills being introduced they are less likely to contain sweeping Bad Actor / Tainted Asset language in my opinion. If PokerStars future in New Jersey is still up in the air there may be a more concerted push from their California opponents to have strong Bad Actor language written into the bill. One interesting side note to this story is that while land-based interests in California have come out full throated against PokerStars, the iGaming companies PokerStars would compete against have taken a softer stance. 888 CEO Brian Mattingley feels PokerStars should spend a year or two in the Penalty Box due what Mattingley sees as the unfair advantage of operating in the U.S. from 2006-2011. They shouldnt be allowed to walk into new states, Mattingley told me in an interview back in August. one year, 18 months, or two years would be appropriate in Mattingleys eyes. Another potential California competitor, bwin.party, also appears to be against Bad Actor clauses. Group Director of Poker Jeffrey Haas had a rather interesting answer to the question of bwin.partys stance on Bad Actor clauses in California when I spoke to him earlier this month, saying only, this is a matter for the regulators to decide. What makes this such an interesting take is that Haass statement is almost word-for-word what PokerStars and their partners have been saying on the matter, Let the regulators regulate. Another Interesting comment by Macarro One of the more interesting statements made by the Pechanga Tribal Chair during the iGaming Business interview was in reference to partnerships. When asked why the tribe hasnt followed the lead of the Morongos (PokerStars) or the United Auburn Indian Community (partypoker) and declared their iGaming partner, Macarro coyly intimated that the tribe already has a partner in place: Who might this secret partner be? There are several potential candidates. 888 has been a driving force in the U.S. online poker market, and since their national partner Caesars doesnt operate a casino in California they are a logical fit. Its also not out of the realm of possibility that partypoker could partner with Pechanga along with UAIC and perhaps other tribes/cardrooms to create a similar network such as the one PokerStars is planning. And there is always the possibility that the answer is C) None of the above, and the Pechanga partnership will be a curveball. Previous Post Next Post 888 poker|amaya|online poker legalization|pechanga|pokerstars 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.
When (yes when) California legalizes online poker, one of three scenarios will likely unfold. In the first, a bad actor clause banning any and all pre-UIGEA participants, including PokerStars, is enacted. The Golden States poker community is left feeling less than enthusiastic. A second sees PokerStars gain immediate access to Californias 38 million inhabitants. The Poker Players Alliance (PPA), legions of online poker aficionados and myself take to the streets in jubilant celebration. But as we all know, touchy legislative issues rarely have black and white answers. Which brings us to scenario number three, where PokerStars is granted a license, but is prohibited from launching operations until a predetermined grace period passes. As much as I am pro-PokerStars, delaying its entry may be the only way to both appeal to the masses and ensure that any iPoker legislation that comes out of California in 2015 is inked into law. Lingering issues regarding the role of racetracks and small tribes in the prospective regulated marketplace aside, the only real issue dividing lawmakers and the states influential tribal factions is PokerStars. Lets be clear its not that PokerStars opponents in California oppose the online poker giant solely because it continued to operate in the United States post-UIGEA. If that were the case, why didnt they soften their stance when the Rational Group was acquired by good actor Amaya Gaming? Instead, they fear that the triumvirate of PokerStars, the Morongo and three of CAs largest card rooms will spell doom for their bottom line. And who wouldnt feel threatened competing against a company that in Europe attracts more than nine times the volume of its next nearest competitor? But by pushing off its right to operate by say 12 or 18 months, other operators have a chance to establish their worth. This sort of compromise benefits the greater poker community in two integral ways. Weve already touched on the idea that by either pushing off PokerStars entry or reevaluating its application at a later date, the path towards legislation becomes much clearer, i.e. faster. Perhaps just as importantly, it gives day one operators a hard deadline to win over consumers. I think its safe to say that the looming presence of PokerStars will compel operators to be far less lackadaisical then they have been in New Jersey. In turn the people that matter most, the players, benefit. Powerful figures within the iGaming sphere such as former 888 CEO Brian Mattingley maintain the belief that while the presence of PokerStars is ultimately good for the market, it should face a penalty for all the years it operated at an advantage. And thats fair. If anything a brief delay ensures that PokerStars will have enough time to fine tune its stellar PokerStars 7 client before launching in California. Perhaps it also learns a thing or two from others mistakes. My advice to California legislators: Level the playing field, do whatever it takes to guarantee that an online poker bill is passed in 2015 and the rules of fair play are upheld. If that means PokerStars entry must be delayed, then so be it. But dont leave the regulated iPoker industrys best hope out in the cold. Previous Post Next Post online poker|online poker legalization|online poker regulation|pokerstars About Robert DellaFave Robert DellaFave writes for a variety of online gaming sites and is also working on programming a poker simulation creative enough to beat the best. Follow Robert on Twitter @DivergentGames and on Google+
Were just a few months away from the start of a new legislative session in California, and Assemblyman Reginald Jones-Sawyer has already indicated that one of the first things he will do is introduce a new online poker bill when the legislature reconvenes this December. 2015 will mark the seventh consecutive year California has attempted to pass an online poker bill, and while some progress has been made, there are still a number of obstacles standing in Californias way. Most notably: 1. Racetrack involvement
2. Bad Actor clauses
3. Licensing restrictions Racetracks This could very well be the thorniest unresolved issue that is holding up online poker legislation in California. While racetracks and the racing industry are on the decline in California and across the country, the racing industry still holds quite a bit of sway in Sacramento thanks to its close alignment with organized labor. If an online poker bill is going to make it out of the legislature in 2015 it will have to deal with this problem in some way, shape or form. The potential solutions are:
Open up the licensing process to racetracks in a manner that appeases them.
Continue on without the support of the racing industry and hope a bill gets passed anyway.
Offer the racing industry some type of stipend out of the tax money generated from online poker. The issue with opening up the licensing process is it also allows smaller card rooms and smaller tribes to apply as well, and could create a situation where there are simply too many cooks in the kitchen, with too many choices for consumers, and too many bad cooks disparaging the industry. Option #2 isnt much better. Without the support of racing and labor the chances that a bill passes through the legislature are greatly diminished. The two groups control a significant bloc of voters and still have a lot of clout with plenty of politicians. The logical answer would seem to be to allow for some type of monetary allotment for race tracks, but I still think some tribes and card rooms will try to cut the racing industry out before putting them on the dole. Bad Actors This is the issue everyone likes to point as the largest hurdle to clear, but with PokerStars (the reason for the Bad Actor clause and the only company vehemently fighting against it) seemingly about to be licensed in New Jersey this is becoming less and less of an issue. Depending on what happens to New Jerseys online poker industry when PokerStars enters the market could determine how hard the opposition fights to keep them out. If Stars comes in like gangbusters Id expect a brutal fight in California. If they come in strong, but not dominating the opposition might bend a little. The problem is, it doesnt seem like a bill can be passed without allowing PokerStars to apply for a license, as their coalition is not only resolute, but is one of the most politically powerful, with the Morongo Band of Mission Indians, The Bicycle Casino, the Commerce Casino, and Hawaiian Gardens Casino. While certain tribes would love to see PokerStars sitting on the sideline for a couple of years, it just doesnt seem like a feasible solution if they want to offer online poker themselves. Fortunately, because of the sale to Amaya Gaming there is an out. PokerStars could still be allowed to apply for a license and Bad Actor language could still be included in the bill. What would need to go are the overarching parts of the Bad Actor clause, most notably the Tainted Asset aspect. One potential solution I could envision would be to include a provision that disallows PokerStars player database from being used. This might be enough to mollify the opposition, and is a concession I could see PokerStars agreeing to*. *I have since been informed that disallowing PokerStars database could be viewed as an unconstitutional taking and is not something on the table. Licensing After the 13 tribe coalition lined up against PokerStars and their California partners, and introduced their vision for an online poker bill in a letter to the state legislature, everyone was talking about their doubling down on Bad Actor language. However, lost in the shuffle were other important parts of that bill; parts important enough that they led to a second letter being penned by yet another coalition (thats three if youre counting) and delivered to the state house in Sacramento. This second letter, written by a coalition of 25 smaller card rooms in the state, called on the legislature to make the licensing process as inclusive as possible, and in doing see turn the potential online poker market into one where only the haves can play. As noted above, the major players in California are trying to keep competition from getting out of control, and have done so by making the licensing fee hefty (somewhere between $5 million and $10 million up front) and by setting strict parameters that would need to be met by any potential applicant. These preclusions are designed to keep the smaller card rooms and smaller tribes out of the online poker industry. The smaller tribes will almost certainly be appeased by some type of revenue sharing deal, such as the one that is currently in place between the large gaming tribes and non-gaming and small gaming tribes for land-based casino revenue. Card rooms are a different matter. Even by combining their political capital, the 25 smaller card rooms that signed off on the July letter simply dont have the political muscle possessed by the tribes and/or racetracks. If anyone is going to get left out of the bill its likely to be the smaller card rooms in the state, although some have suggested allowing these smaller card rooms to launch online poker sites under one of the larger operators license similar to a skin of an online poker network in the global market. The license holder could then take a cut of the skins revenue and perhaps everyone would be happy wishful thinking for sure. Authors note: This article was updated on 9/28 to reflect new information regarding PokerStars database. Previous Post Next Post California|pokerstars 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.
Many of the so-called online poker legal experts are beginning to claim that 2015 is the year that California will legalize the game. Havent we heard this before? Wasnt that the claim in 2014? While Im not going to claim that online poker is a lock for California in 2015, the prospects look better than they did at the start of 2014. The stumbling block holding things up continues to be PokerStars. This time around, we have a new wrinkle. Amaya Gaming Group Inc has purchased the company and wants to operate the site. While progress is being made, nothing is concrete and this could still drag on months or even years. With that said, today we present some scenarios that could lead to the bill finally being passed and PokerStars being allowed into California. Revise the Law to a Five-Year Penalty Across the Board The bad actor clause as it stands in California will prohibit PokerStars from ever entering the legalized marketplace. Regardless of what you think about the company or their role in Black Friday, a lifetime ban is excessive. Instead, it may be time to revise the bad actor law to provide a straight five-year penalty to any company that violated the UIGEA. This could also apply to companies like Amaya that purchased assets of companies that violated the UIGEA. A five-year penalty keeps out UIGEA violators out until at least 2020, assuming that a law is passed in 2015. This is more than enough time for tribes and state card rooms to establish themselves. Eliminate Bad Actor and Give Poker a Two-Year Flat Penalty New Jersey does not have a bad actor clause in their online gambling laws, but they do consider each applicant on merit. This is what led to PokerStars problems in the Garden State. Rather than an arbitrary bad actor clause, axe the clause and let regulators evaluate each site based on their past. California could take the approach of New Jersey and prevent the company from entering the state for the first two years of legalized online poker. Technically, New Jersey put PokerStars licensing application on-hold, but it still accomplished the same purpose. In the case of California, this would be an outright penalty for past discretions and a way to nullify the sites perceived competitive advantage. Much like revising the bad actor clause, this would give tribes and card rooms time to get a foothold without the dominant prescience of PokerStars. Revenue Sharing System With Tribes Another option that all parties could consider is a revenue sharing system akin to that of Major League Baseball. There are two primary components to the MLB system. First, 31 percent of local revenues are put into a fund and those funds are evenly distributed among teams at the end of the season. Next, teams with excessively high payrolls are hit with a luxury tax. When a team surpasses a pre-set limit, they pay into this fund. The lower payroll teams are then paid this tax. Im not saying that every site should pay 31% of their revenue into a sharing fund, but a smaller percentage could be considered. For example, each online site could put 10% of their internet win into a revenue sharing fund. To see how this works, lets assume that the first year there are nine tribal sites operational along with PokerStars. First years revenues come in at a modest $100 million of which PokerStars collects $80 million. The nine tribes contribute $2 million to the fund or roughly $222,222 per site. PokerStars contributes $8 million to the fund. At the end of the year, each site gets $1 million. While PokerStars technically loses $7 million this way, they still finished up $73 million on the year while Tribes gain $777,778 each. An alternative option would be to impose a luxury tax on PokerStars. If PokerStars market share exceeds a certain percentage, say 70%, they pay a percentage of their win as a luxury tax. That money would be distributed to the tribes. Using my prior example, PokerStars would have an 80% market share in California. Imposing a 10% luxury tax on the site would send $888,888 to the other sites in the state. A 20% luxury tax would send $1.7 million to each operating tribal site. Using a revenue sharing system could be a way of making PokerStars pay for the privilege of operating in the state post-UIGEA. They would still be dominant operator, but the sting would be a bit less for tribes. What About OnGame? With all of the focus put on the PokerStars brand, it seems that most have forgotten that Amaya owns another poker network that could be modified for the U.S. market. The company purchased the Ongame Network from bwin.Party in 2012, a move that most thought was a precursor to a reentry into the U.S. market. If PokerStars continues to be a hindrance, why not make a compromise where Amaya enters California with OnGame? They already own the rights to the site that would be a perfect choice to resurrect for the California marketplace, PokerRoom.com. Some of you may remember that PokerRoom reopened in 2012 and closed its doors for the second time in 2013. The site was a trailblazer for online poker in the early days of the game and could be revived for a new chapter in the American market. Let Amaya enter with the OnGame brand and evaluate them for two years. After that time, allow PokerStars to come into the market. Previous Post Next Post California|online poker|pokerstars About James Guill Originally a semi-professional player, James transitioned to the media side in 2008. Since then he has made a name for himself reporting for some of the top names in the industry. When not covering the poker world, James travels around central Virginia hunting for antique treasure.
In a recent analysis report Morgan Stanley severely slashed their previous future market estimates for online gambling in the United States. This is the second downward revision by the firm, the first coming in March of this year. The firms analysts cut projected earnings across the board, starting with 2017 where their projections were cut from $3.5 billion all the way down to $1.3 billion. They also dropped their estimates for the U.S. market in 2020, revising it from $8 billion to $5 billion the firms initial 2020 estimate prior to the March revision was $9.3 billion. Morgan Stanley also lowered their full U.S. market value (all 50 states) from $13.3 billion to $10.7 billion based on the current data available from Nevada, Delaware and New Jersey. The report did offer up some reasons for optimism as well, as the analysts indicated they expect 12-20 states to have legal online gambling by 2020 (based on their bullish and bearish forecasts), and anticipate California and potentially Pennsylvania passing an online poker bill in 2015. Future U.S. growth seems overstated By far the most interesting prognostication is the notion that perhaps 20 states will have online gambling by 2020. Unfortunately, the report didnt go into much detail on where that number comes from. Im not sure if they were simply trying to stick to a theme of 20s here (20 states by 2020), considering that even if the U.S. undergoes a domino effect of sorts following the passage of an online poker bill in California, or perhaps a state like Pennsylvania, its hard to envision 20 states with online gambling by 2020 which as scary as this sounds, is just over five years away. According to Morgan Stanleys bearish forecast, California will pass an online poker bill in 2015 (and go live in 2016), followed by Pennsylvania, Illinois, and New York in 2018. That would make a total of seven states with online gambling by 2018 when you add in Nevada, Delaware, and New Jersey. In the bullish forecast both California and Pennsylvania pass online poker bills in 2015 strangely, Pennsylvania seems far more likely to pass a comprehensive online gambling bill and not an online poker bill as Morgan Stanley prognosticates. Using the bearish and bullish forecasts, the next logical question is, who are the other five to 13 states that will join them in the following two years to make the market worth $5 billion? Colorado, Iowa, Massachusetts, Mississippi, West Virginia, Maryland, Hawaii, and Washington are all believed to be potential contenders, or have at least explored the idea of passing an online gambling bill (some are far more likely than others), but this still leaves us up to five states shy of reaching 20. This is of course assuming that all eight of these potential contenders mentioned above will pass online gambling legislation in the next five years as well. Certainly some other contenders could spring into being, but I would call Morgan Stanleys bearish estimate of 12 states bullish, and wouldnt be surprised if just a half dozen states had online gambling by 2020. And Im not the only one. As Chris Grove reported at onlinepokerreport.com, Deutsche Banks Andrew Zarnett and Eilers Research (who have proven to be among the most accurate prognosticators of the U.S. iGaming markets) both have produced their own estimates of around $2 billion by 2020 for U.S. iGaming. This seems to be a more prudent projection, and indicates far fewer than 20 U.S. online gambling markets. Working against Morgan Stanleys credibility on this front is their previous estimates, where they were over five-times the Eilers and Deutsche Bank estimates of $2 billion just six-months ago, and are still more than double the other two estimates despite two downward revisions. PokerStars NJ impact also addressed In addition to the changes in their future projections, Morgan Stanley also highlighted the fact that PokerStars impact could be more pronounced than first thought. According to the report, PokerStars entry into the New Jersey Market could be a complete game-changer, considering their arrival in the Italian market saw year-over-year growth of 62% for the market. Of course the Italian market isnt the most apt comparison considering the country only allowed for online poker tournaments during this period of time, and is far larger than the New Jersey by a factor of almost seven. Another consideration was that poker was just starting to take off in Italy in 2008, so that growth may have occurred with or without PokerStars. Furthermore, PokerStars didnt have to deal with a three-year blackout period in Italy, as the Italian online poker market went from gray market to legal and PokerStars was there throughout, launching PokerStars.it in 2008. Still, its an interesting way to look at the power behind the PokerStars brand and the potential impact on the New Jersey market. You can see Morgan Stanleys complete breakdown of PokerStars impact on page 13 of the report. Previous Post Next Post pokerstars 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.
The Santa Ysabel tribe is continuing to make overtures to the poker community that they are planning to launch a real-money online poker room ahead of any legislation by the state. However, many people are skeptical that this will come to pass and consider the announcements posturing by the tribe; a means to some other end. The tribe could quell some of this dissent by answering the quartet of questions I have listed below. Question #1: Whats the difference? For lack of a better description, the Santa Ysabel poker site will be an offshore site (such as Lock Poker, Carbon Poker, or Americas Cardroom) that is headquartered in California. Like an offshore site, there will be no oversight by California or any other regulatory body in the U.S. They are using the same type of payment processing company to handle transactions, the same type of overseas regulatory body and server hosting, and the even the same software as some offshore sites. The logical question is, why would a Californian choose to play at PrivateTable.com when they could play against a larger pool of players at one of the other offshore sites mentioned above? Americas Cardroom and Black Chip Poker are even using the exact same software. Question #2: Is this legal? You can say it is until youre blue in the face but there are several lingering issues over the legality of this endeavor, and there is little question in anyones mind that the site will be served with a lawsuit the second they try to launch. Firstly, lets just assume its legal under Class II gaming laws from the Indian Gaming Regulatory Act (IGRA), and that online bets occur at the server. There is still a serious issue as the Santa Ysabel servers are going to be located in Canada on the Kahnawake reservation. I recently asked Martin Owens Jr. a gaming law expert who is consulting for the Santa Ysabel tribe this very question: Does the server not being on Santa Ysabel tribal lands matter? If the Kahnawake tribe hosts the servers wouldnt this violate Class II gaming (assuming online poker is Class II gaming) under IGRA as the betting is taking place off-reservation? His response was far from reassuring: that is something that I have discussed at length with my clients. Both they and I are confident that our course of action is within the law. Moving on, whether or not poker is Class II gaming in California is indisputable, but there is still debate if online poker is. Martin Shapiro has made this argument many times, and nobody (on either side) has been able to make an overly compelling case. Furthermore, is it legal for FinPay to process these online poker payments? This seems like another loose end that nobody is really discussing. Question #3: What is causing the delays? This is no bluff. Thats the constant refrain from the Santa Ysabel tribe, but so far it looks like a bluff, it smells like a bluff, and it has behaved like a bluff. So in between tweets about Rummy laws in India and the origins of the word of poker the PrivateTable.com Twitter account has offered little in the way of an explanation as to why this isnt a bluff. If its not a bluff, why have there been multiple delays when all the pieces look to be in place? The Kahnawake tribe (your regulatory body) is old hat with online poker sites. The delays cannot be regulatory in nature. The tribe is saying they have experienced bumps along the road in regards to performance and dont want to launch and then have to fix these issues (read as: software issues), but this simply doesnt make much sense considering the software they are using is already in use at several other online poker rooms offering real money and there isnt a regulatory body calling for changes. Question #4: Show me the money? The Santa Ysabel tribe tried to file for bankruptcy when they closed their brick & mortar casino earlier this year, but were denied bankruptcy protection and are therefore still sitting on millions of dollars of debt. So my last question is: Where did the tribe come up with the funding to lease the software from IG Soft, to hire and retain the payment processor FinPay, and to get licensed by the Kahanwake tribe in Canada? Where is the money to retain Owens and other experts coming from? The money to market and promote Private Table? Furthermore, who is going to pay to fight the inevitable legal battles the tribe will be confronted when they launch? Why these questions need to be answered If the Santa Ysabel tribe can satisfactorily answer these questions then we can have a conversation about the implications of their launching in California and what it means for U.S. online gaming moving forward a conversation I would love to have. But until these questions are answered its hard to read their pronouncements as anything but a bluff, with the tribes real motivations being unclear. Previous Post Next Post santa ysabel 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.
Throughout the course of 2014 the Bad Actor debate slowly took over the online poker headlines in California, and when it looked like the state would be waiting yet another year to pass an online poker bill, many were quick to point the blame at PokerStars and their allies, or the coalition that lined up against them depending on their purview. Its certainly an interesting and important topic, but truth be told, the Bad Actor debate merely masked the underlying problems in California. Long before PokerStars and Bad Actors flooded discussion of California online poker, the state was given several chances, dating back to 2009, to pass an online poker bill and they completely whiffed. Pinning Californias inability to pass an online poker bill on PokerStars or Bad Actor language is akin to blaming a 30-point blowout loss on the benchwarmers you inserted in the fourth quarter. The best indicator that PokerStars had little to do with the failure to pass an online poker bill in California can be seen in the lack of blame being thrown at the companys feet now that the bills are officially scrapped. In the lead up everyone was squawking about who would get the blame, PokerStars and company or the coalition lined up against them, if a bill wasnt passed this year, but we were all duped. Neither of these groups has received much blame because the failure wasnt directly attributable to PokerStars or Bad Actors. If PokerStars was the reason online poker failed to pass in California you would expect plenty of people (especially from the opposition side) to start pointing fingers at PokerStars involvement. Instead, what we heard was there simply wasnt enough time, and that California needs to get it right. No mention of PokerStars, only passing references to Bad Actor clauses, and no mention of the two coalitions that formed with PokerStars, the Morongos, the Bicycle Casino, the Commerce Casino, and Hawaiian Gardens on one side and 13 other tribes led by the Pechangas, the Agua Caliente, Pala, and others. When the bills were shelved it was as if the most contentious point over the past three months never existed. PokerStars Director of Group Strategy and Business Development, Guy Templer, spoke to EGR Magazine (paywall) offering up his view on what happened in California: Templers statement seems innocuous enough, that there were too many unresolved issues already on the table, and adding PokerStars to the mix didnt tip the scales in one direction or another. Reading between the lines it may even say more. Templers comments could be an indication (conjecture alert) that certain interests in the state are not on board with online poker (even though some may publicly say they are) and are doing everything they can to create wedge issues to drive the pro-online poker factions apart. The longstanding hurdles The real problem in California has to do with the states size. As Ive written in the past, California has the size and population of a country, which has led to not one or two gaming power players, but a dozen powerful interests, all looking to negotiate the best deal for themselves, and all with different goals and aims to satisfy. The declining racetrack industry in California wants to be part of the process, but the tribes and cardrooms want to cut them out (why court more competition?) and deny them the ability to apply for online poker licenses. The tracks themselves have some political clout (nowhere near some of the large tribes or even cardrooms) and they are being supported by labor unions, which makes racetracks a very thorny issue to deal with. There is also the not so small matter of how to incorporate small tribes and small cardrooms. Will a new revenue sharing agreement be put in place between the tribes? will tribes and or cardrooms be allowed to operate as skins? Will they be cut out completely? On top of all these other complex issues, you can then add in Bad Actor clauses and PokerStars. Previous Post Next Post pokerstars 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.
After their latest launch date has once again come and gone, can we all finally agree that the Iipay Nation of Santa Ysabel tribe has no intention of actually launching an online poker site in California? At this point the Santa Ysabel tribe is basically George Costanza telling his in-laws he has a house in the Hamptons when they know full well he doesnt: With a number of delays and false promises the Santa Ysabel tribe has effectively driven us all out to the Hamptons, unwilling to accept the fact that their bluff has been called. Lets get nuts! might as well be plastered across their online poker rooms homepage. All of their insistence that this was not a bluff (perhaps aimed directly at me as I used this same terminology in a column at Bluff Magazine, or more likely its aimed at another vocal critic, Martin Shapiro) has so far proven to be nothing more than hubris. Now let me be clear: Could the Santa Ysabel tribe launch an online poker site as they claim to be working towards? Sure, nothing is impossible. That being said, the Tribe has lost what little credibility they had with me after their latest delay. Delay after delay after delay At some point the Tribe has to be looked upon as the online operator who cried wolf. Whatever their current intentions are, its hard to forget the past six weeks or so. I wont say I called it, but in my Bluff column from July 15, I stated the following [bold added]: So how right was I about this? Not only did they delay the first launch date (July 14) to sometime next week, but that timeline came and went as well. Then around August 15th the Tribe told Card Player Magazine that they would be launching between August 26th and August 28th. Following their non-launch on the 28th, John Mehaffey of CaliforniaOnlinePoker.com asked their live chat support if they planned on launching for real-money today. Here is the response he received: The next day PokerUpdate.coms Charles Rettmuller asked a similar question but got an altogether different response: Thats three deadlines come and gone, with no firm launch date in place, for anyone counting. It makes it hard to take anything they say seriously. Wasnt hard to see from the get go As soon as the Santa Ysabel tribe showed up in July with their promises of a real-money online poker site (despite the small problem that California had not passed online poker legislation) many people felt something was amiss. And not just with the music-stopping out of nowhere declaration that they were launching an online poker site. The licensing body and sever host, the Kahnawake Tribe in Canada, have a dubious background as the former regulators of Absolute Poker and Ultimate Bet. The payment processor, FinPay, has strong ties to a previous payment processing company that went bankrupt and doesnt have a way to sign up for an account. The Santa Ysabel Tribe also had a few warts, considering bankruptcy would have been a good outcome in view of the Tribes own track record with gambling ventures. There were flies everywhere. Yet despite all of this, and despite the Tribes insistence it had the sovereign right (under the Indian Gaming Regulatory Act) to offer online poker even though the matter is far from settled in any court of law, many people looked upon this venture as legitimate. People have pointed to the PrivateTable.com Google ads, or the tribes lawyers telling us they have the legal authority to launch, or their active Twiter account (with all of 147 followers, many of them iGaming journalists) as reasons to be optimistic and take them seriously. It might be worse if they DID launch Even more worrisome in my view, was the notion that this would somehow be a step forward for online poker in the United States. While I understand the desire to have legal online poker come back to the United States, doing so in this workaround way to legislation and regulation (as has been done in three states) is simply not the answer. If Private Table does launch, and they prevail when the inevitable injunctions are filed, we will be right back at square one with online poker in this country. All of the safeguards and regulations that have been put in place in Nevada, Delaware, and New Jersey would be useless, as every tribe in the country would suddenly be leasing their name to online poker sites across the globe to come setup shop on their reservation and none of these operators would be restricted by these strict regulations and tax burdens. It would essentially lead to completely unregulated online poker with good and bad operators (unless you consider licensing bodies like the Kahnawakes solid regulators) and states would see $0 from it. How much political support do you think a Sheldon Adelson-led ban on online gambling would get if that were the case? Previous Post Next Post private table|santa ysabel 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.
Its another evening of WSOP on ESPN, lets finish up Day 6 of the Main Event. Norman wastes no time making his weekly bet against Mark Newhouse: this one involves upside-down cooking, and is oddly specific about the menu. Episode 9: Establishing Tone
Dan Smith might only have 9-5, but hes in the small blind and has 3 million chips, so thats worth calling. Andrey Zaichenko has T-9 suited. The flop is QJT, both players have the same fair chance at a straight and weak chance at a flush, but Zaichenko has the advantage with his pair. Smith bets, the turn is another Queen (in Zaichenkos suit.)
Smith bets again, but Zaichenko is patient. A 6 on the river, nothing connects. Smith bets bigger, Zaichenko seems to suspect the bluff but his hand isnt strong enough to make the risk worth it so hell let Smith pick up a small amount of chips from him. Its not a dramatic start, its not a pivotal hand, but this hour of television is going to go at a different pace than previous episodes so we have to set the stage right. Keranen in the lead Michael Finstein has re-raised all-in with T-T against Kyle Keranen who has A-Q. J8KQ2. There is our first elimination, Finstein will go home in 42nd place. That means we can expect to cut this pool in half in the next two hours. It also means Keranen increases his lead and now has twelve and a quarter million chips. Lightbourne and bluff-shoving Newhouse was smart to get away from the last one. Now hell risk raising with 7-6 against someone we havent seen much of yet, Iaran Lightbourne. Lightbourne is holding Q-J suited and re-raises, so we have a million chip pot before the 3K9 flop. Newhouse tries too hard to build that pot, and Lightbourne is enticed to go all-in, Newhouse instantly throws the 7-6 away. The British Lightbourne will follow up betting on a 3-3, which goes unchallenged until Smith in the Big Blind has A-K suited. Both raise, Smith asks for a rule clarification before shoving and now Lightborne is the one to scurry away. Only Devonshire sees rivers After a break, Keranen is back at the Feature Table. He looks on as Gal Erlichman goes all-in with A-J for 1.6M. Bryan Devonshire calls with K-K. 3J4JQ, Erlichmans unlikely trips help him stay alive at Devonshires expense. Devonshire hungers to make that back, so hell bet with a suited 6-5. Tom Sarra, Jr will call with A-2. The flop is 42T, but Devonshire has several outs and bets again. The turn is a 3, and Devonshire has a straight. He bets again, and the river is an irrelevant 6. Devonshire now has to try to bet to extract the maximum amount to not scare Sarra off. Another 775K from each will bring the pot to 3.5M, making up for the previous hand. Were seeing a lot of back-and-forth. Awards Billy Pappas will pit A-T against Felix Stephensons J-T, while Andoni Larrabe has the advantage with a pair of Sevens. 443 flop, Larrabe bets small and Stephenson drops out. Pappas raises bigger. 9 on the turn, both check. The 2 does nothing, but Pappas bets huge to scramble Larrabes head. The modest increase for Pappas earns him the Gentleman Jack The Right Move of the Night. Pocket aces for Aaron Kaiser, it takes him a long time to bet a million chips. The only taker is Smith with two Jacks. Kaiser flops a set, 6QA, but hesitates and Smith puts him all-in. 6QAT4, Kaiser doubles up but is warned for taking too much time.
Dan Smith loses the hand but winds the DraftKings.com King of the Night for his trouble. Episode Ten: Three pairs on a table
The second episode opens with Daniel Sindelar trying to make some headway with pocket Aces. Velador with 6-6 and Erlichman with K-K want to stop him, but the 389 flop pleases no one. Erlichman bets 475K, Sindelar raises to 1.2M, and Velador jumps ship. Erlichman goes all-in. A Ten and an Ace send Erlichman home and rocket Sindelar to 2nd place with 12.67 million. Were down to four tables. Sarra with a short stack will call Velador, A-T to T-T. The flop is J4Q. Sarra check-raises and earns a small increase with Velador folds. Velador is still in the top spot, but at least Sarra no longer has the smallest pile at the Feature Table. That honor now belongs to Leif Force, who has A-9 and will re-raise against Sarras J-T. Sarra will then re-re-raise aggressively to send Force running, now in an even worse position. Meanwhile Dan Smith is sitting on pocket Kings, but probably doesnt suspect the A-A in Chris Johnsons hand. 285; Smith bets low, Johnson tries to play it cool, laying a trap. But then the King turn gives Smith his set. Smith makes another small bet to not tip his hand. Another 2 on the river completes the Full House. Smith keeps the bet reasonable hoping Johnson will bite, which Johnson does, trusting his two pair and trying to push Smith all-in. They have essentially traded stacks. There are again some wired Aces in Aaron Kaisers hand. Smith will call him with Q-T suited. And just like earlier, Kaiser flops a set against Smith, 68A. No one bets after the Jack turn, but this time the river King completes a broadway straight for Smith. Kaiser bets, and Smith casually baits him all-in, sending Kaiser home in 36th and getting his vengeance for earlier. Smith has cracked 10M. Devonshire has K-K, and gets called by Force with A-Q of clubs. Matt Haugen also calls for some reason, 9-4 of clubs. T44, Haugen flops trips and Devonshire cant imagine that this is the case (Force however vanishes.) Turn: 3; River: Jack. Haugen bets 900K and Devo calls, dropping to 4.5M. Haugen is climbing back up to his earlier status, now at 9.5M. Thinning the herd Martin Jacobson has A-K against Peter Placeys A-Q of hearts. The A54 flop gives them each a pair, but Placey goes all-in for 4.7 million. Jacobson calls, Placey has two cards to catch a Queen. The 2 that comes next gives a slim chance to chop the pot with a straight. Sadly for Placey the river is a 6, and another player is gone. Strange hands The only reason Sarra with K-3 faces Velador with Q-T is they are the small and big blind, but 77372 means another full house, and Sarra lets Velador drive the betting. Sarra takes a serious chunk of the older players stack. Johnson is going all-in for 1.7M with Deuces against the A-K of Dan Smith. QQ9A9, goodnight Johnson and were down to 30. Jorryt van Hoof has some Eights to measure against Mahins pair of Tens and Dong Guos K-Q. Van Hoof gets his set from the 398 flop, but checks, as does Guo. Mahin bets over a million, van Hoof calls and Guo slips away into the night. Not wanting to wait for the turn, van Hoof makes an in-the-dark all-in; Mahin regrets calling as van Hoofs three eights put him at 5.4 million chips. Mahin has lost half his stack but still shakes van Hoofs hand. Guo and Campbell Guo also backs away from a trap from Billy Pappas, but his stack is hurting. Something evil possesses Haugens body and makes him bet a million chips with A-8 against Veladors A-A after a 2TK flop. The turn is 2, the demon in Haugen bets another 1.5 million. Velador performs an exorcism by going all-in and Haugen manages to fold, losing only half his stack instead of nearly the whole thing. Another three pair hand: Guo has Kings, Pappas has Aces, and Campbell goes all-in with 8-8. Pappas wants Guo to go all-in as well, and he makes it happen. Q7529.
Campbell and Guo are both seen leaving as first timer Pappas reaches 3rd place and organizes his stack of fifteen million. Billy Pappas will be DraftKings.com King of the Second Episode Down to 27 Haugens raise on T-T will go all-in against Devonshire with Q-Q. Unfortunately after a lot of back-and-forth tonight, 58AK9 will send Haugen home in 28th place. Devonshire warns Haugen about a tell while the exiting player begins mentally spending $230,487. Day 6 is over, Martin Jacobson will begin tomorrow as chip leader with 22.3 million. See you next week when the focus will probably be more on Mark Newhouse. Previous Post Next Post wsop.com About Ryan Ocello