California State Senator Preparing Internet Poker Bill
26 Apr, 2010
Sen. Roderick Wright, a Democrat from the Los Angeles suburb of Inglewood, has been talking to California tribes in recent weeks and sources say he may introduce his bill by the end of this month or in early May.
"I'm not sure of the actual timeline, but yes, he is working on language that will authorize the play of intrastate Internet poker in California," said Chris Lindstrom, who works for Wright as a consultant for the California Senate Committee on Governmental Organization.
"I don't know when the language will actually make it into a bill," Lindstrom said.
As chairman of the Governmental Organization Committee, Wright presided over a day-long hearing on Internet gambling on Feb. 9.
During the hearing, Wright predicted any legislation allowing Internet poker in California "clearly" would "end up in court."
Wright sought to portray the February hearing, which included 35 witnesses, as an attempt to clear the air about Internet gambling in California. When the hearing concluded, Lindstrom said Wright was not working on an Internet poker bill and the hearing's purpose was simply to educate and inform.
But Wright met recently with California tribes, fuelling speculation that he was on the verge of introducing a bill.
"I think the senator wants to take the bull by the horns," said Matt Franklin, who is chairman of the California Association of Tribal Governments and Chairman of the Ione Band of Miwok Indians.
At least one million Californians play Internet poker offshore already; producing annual revenues of about $1bn.
It is therefore believed California could receive an additional $250m each year if it taxed Internet poker at 25 percent -- the same rate applied to tribal slot machines in the state -- although clear estimates of the likely tax income are elusive.
Perhaps Wright's biggest challenge is crafting a bill that would legalize, regulate, and tax online poker without risking $365m in annual payments the state receives from California’s gaming tribes.
If his bill were interpreted as authorizing California to compete with Indian gaming operations in the state for revenues, tribes would arguably no longer be obligated to pay.
Earlier attempts to introduce an intrastate online poker bill in 2008, led by state assemblyman Lloyd Levine, foundered in the face of stiff tribal opposition.
Still, it appears unlikely Wright will adopt a proposal unveiled last year by the Morongo Band of Mission Indians in Banning.
Under that plan, the Morongo tribe and a group of card clubs would run their own Internet poker site in California and share the revenues with the state government and the state's other tribes, including those without gambling facilities.
But during his latest meeting with tribes, Wright told a Morongo representative that the tribe's proposal would be his “least likely option,” according to Alison Harvey, the executive director of the Californian Tribal Business Alliance.
Patrick Dorinson, a spokesman for the Morongo Tribe, said the tribe is open to alternatives to its plan.
"One of our main goals is for all of the state's tribes to have the opportunity to participate and benefit in this process so that we can protect the California tribal brand," Dorinson said.
California appears to be in a race with Florida, New Jersey and a few other states to become the first state to legalize Internet poker.
On March 25, the Florida House Insurance, Business and Financial Affairs Policy Committee scheduled a vote on an Internet poker bill by State Rep. Joseph Abruzzo, D-Wellington, but ran out of time before it could vote.
Another potential competitor is the federal Congress where there are rumblings that Internet gambling legislation by Rep. Barney Frank, D-Mass., and Sen. Bob Menendez, D-N.J., could pass this year.
Frank's bill would overturn the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, and Menendez's bill would exempt poker from the ban.
But Dorinson said it's not competition with other states or Congress that is adding urgency to Wright's effort to introduce an intrastate poker bill for California.
"The number one urgency in California is revenue," Dorinson said. "I think this is a bill the legislature will look seriously at."
Passing Wright's bill into law this year is "eminently doable," he said.
"No one has ever claimed this is the magic pill for an $18bn to $20bn budget deficit," Dorinson said. "But when you're broke, and someone puts money out there, you're going to take it."
Some gambling experts insist UIGEA includes a loophole that allows states to legalize intrastate online poker, but others are not so sure.
While the U.S. Department of Justice has discouraged previous forays by states into Internet gambling, the department has yet to declare whether online poker violates UIGEA or any other federal law.
John Pappas, executive director of the Poker Players Alliance, has said any state that passes Internet gambling is entering "a gray area."
While he said he believes Wright is determined to "to get something done" in California, Pappas said the wiser course may be to yield to Congress.
“I think it’s going to be a hard sell to convince states they can receive enough revenues from a closed-loop Internet poker website that does not offer players access to other websites,” Pappas said.
Federal regulation would offer more choices for online gamblers by opening up the Internet market, he said. Pappas also said gamblers would be better protected if Internet gambling is regulated by the Department of Treasury as Frank's bill would require.
Frank’s bill, which has 68 co-sponsors, would allow California and other states to opt out of federal regulation of Internet gambling. But Pappas said California gamblers are likely to demand the increased safeguards provided by federal oversight.
Pappas also downplayed the threat that federal legislation would enable California to compete for gambling revenues with Indian casinos, thus jeopardizing annual tribal payments to the state.
“(House Finances Committee) Chairman Frank has reached out to the Morongo tribe and other tribes, and I’m sure something can be worked out to avoid that,” Pappas said.
Whenever Wright introduces his bill, it is almost certain to meet resistance from the powerful Pechanga and other tribes who have opposed the Morongo proposal.
Another formidable adversary is likely to be the California Tribal Business Alliance (CTBA).
“We don't think intrastate (Internet gambling) is the way to go,” said Harvey, the CTBA executive director.
Even Franklin, the California Association of Tribal Governments chairman who would like to see intrastate Internet poker in the state, conceded, “Nothing quick will happen.”
Both Alison Harvey of the CTBA and state senator Roderick Wright will speak at the upcoming Global I-Gaming Summit and Expo in Montreal from May 11th-13th 2010. For more information see www.gigse.com
"I'm not sure of the actual timeline, but yes, he is working on language that will authorize the play of intrastate Internet poker in California," said Chris Lindstrom, who works for Wright as a consultant for the California Senate Committee on Governmental Organization.
"I don't know when the language will actually make it into a bill," Lindstrom said.
As chairman of the Governmental Organization Committee, Wright presided over a day-long hearing on Internet gambling on Feb. 9.
During the hearing, Wright predicted any legislation allowing Internet poker in California "clearly" would "end up in court."
Wright sought to portray the February hearing, which included 35 witnesses, as an attempt to clear the air about Internet gambling in California. When the hearing concluded, Lindstrom said Wright was not working on an Internet poker bill and the hearing's purpose was simply to educate and inform.
But Wright met recently with California tribes, fuelling speculation that he was on the verge of introducing a bill.
"I think the senator wants to take the bull by the horns," said Matt Franklin, who is chairman of the California Association of Tribal Governments and Chairman of the Ione Band of Miwok Indians.
At least one million Californians play Internet poker offshore already; producing annual revenues of about $1bn.
It is therefore believed California could receive an additional $250m each year if it taxed Internet poker at 25 percent -- the same rate applied to tribal slot machines in the state -- although clear estimates of the likely tax income are elusive.
Perhaps Wright's biggest challenge is crafting a bill that would legalize, regulate, and tax online poker without risking $365m in annual payments the state receives from California’s gaming tribes.
If his bill were interpreted as authorizing California to compete with Indian gaming operations in the state for revenues, tribes would arguably no longer be obligated to pay.
Earlier attempts to introduce an intrastate online poker bill in 2008, led by state assemblyman Lloyd Levine, foundered in the face of stiff tribal opposition.
Still, it appears unlikely Wright will adopt a proposal unveiled last year by the Morongo Band of Mission Indians in Banning.
Under that plan, the Morongo tribe and a group of card clubs would run their own Internet poker site in California and share the revenues with the state government and the state's other tribes, including those without gambling facilities.
But during his latest meeting with tribes, Wright told a Morongo representative that the tribe's proposal would be his “least likely option,” according to Alison Harvey, the executive director of the Californian Tribal Business Alliance.
Patrick Dorinson, a spokesman for the Morongo Tribe, said the tribe is open to alternatives to its plan.
"One of our main goals is for all of the state's tribes to have the opportunity to participate and benefit in this process so that we can protect the California tribal brand," Dorinson said.
California appears to be in a race with Florida, New Jersey and a few other states to become the first state to legalize Internet poker.
On March 25, the Florida House Insurance, Business and Financial Affairs Policy Committee scheduled a vote on an Internet poker bill by State Rep. Joseph Abruzzo, D-Wellington, but ran out of time before it could vote.
Another potential competitor is the federal Congress where there are rumblings that Internet gambling legislation by Rep. Barney Frank, D-Mass., and Sen. Bob Menendez, D-N.J., could pass this year.
Frank's bill would overturn the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, and Menendez's bill would exempt poker from the ban.
But Dorinson said it's not competition with other states or Congress that is adding urgency to Wright's effort to introduce an intrastate poker bill for California.
"The number one urgency in California is revenue," Dorinson said. "I think this is a bill the legislature will look seriously at."
Passing Wright's bill into law this year is "eminently doable," he said.
"No one has ever claimed this is the magic pill for an $18bn to $20bn budget deficit," Dorinson said. "But when you're broke, and someone puts money out there, you're going to take it."
Some gambling experts insist UIGEA includes a loophole that allows states to legalize intrastate online poker, but others are not so sure.
While the U.S. Department of Justice has discouraged previous forays by states into Internet gambling, the department has yet to declare whether online poker violates UIGEA or any other federal law.
John Pappas, executive director of the Poker Players Alliance, has said any state that passes Internet gambling is entering "a gray area."
While he said he believes Wright is determined to "to get something done" in California, Pappas said the wiser course may be to yield to Congress.
“I think it’s going to be a hard sell to convince states they can receive enough revenues from a closed-loop Internet poker website that does not offer players access to other websites,” Pappas said.
Federal regulation would offer more choices for online gamblers by opening up the Internet market, he said. Pappas also said gamblers would be better protected if Internet gambling is regulated by the Department of Treasury as Frank's bill would require.
Frank’s bill, which has 68 co-sponsors, would allow California and other states to opt out of federal regulation of Internet gambling. But Pappas said California gamblers are likely to demand the increased safeguards provided by federal oversight.
Pappas also downplayed the threat that federal legislation would enable California to compete for gambling revenues with Indian casinos, thus jeopardizing annual tribal payments to the state.
“(House Finances Committee) Chairman Frank has reached out to the Morongo tribe and other tribes, and I’m sure something can be worked out to avoid that,” Pappas said.
Whenever Wright introduces his bill, it is almost certain to meet resistance from the powerful Pechanga and other tribes who have opposed the Morongo proposal.
Another formidable adversary is likely to be the California Tribal Business Alliance (CTBA).
“We don't think intrastate (Internet gambling) is the way to go,” said Harvey, the CTBA executive director.
Even Franklin, the California Association of Tribal Governments chairman who would like to see intrastate Internet poker in the state, conceded, “Nothing quick will happen.”
Both Alison Harvey of the CTBA and state senator Roderick Wright will speak at the upcoming Global I-Gaming Summit and Expo in Montreal from May 11th-13th 2010. For more information see www.gigse.com