New California Internet Poker Bill To Challenge Tribes
13 May, 2010
Speaking at the Global iGaming Summit and Expo (GiGSE) in Montreal yesterday, Senator Rod Wright of Inglewood, CA., announced his intention to debut a measure that would propose the legalisation of an intrastate poker system in California within the next two weeks, but the veteran lawmaker acknowledged there would be conflict over the bill.
“California has 68 compact-registered Indian tribes playing class III games,” he conceded.
“Our first argument will be whether or not playing online poker violates the compacts that were signed with those tribes – there is not even a unanimous opinion among the tribes themselves – so anything we do will have to go through the process of debating exclusivity and that could take two or three years.”
Currently California’s tribal compacts, drafted in 1999, grant tribal exclusivity over Las Vegas style class III gaming machines in exchange for hefty revenue share payments.
But many tribal observers argue that the introduction of state-supervised internet poker would constitute the arrival of gaming machines on the home computers of millions of Californians, invalidating the compacts.
“We will, in effect, initiate our own fact finding which could end up all the way in the Supreme Court,” said Wright yesterday.
Wright, who held a nine-hour informational hearing on the issue of online poker in Sacramento in February, currently has legislative assistants drafting language for a new bill.
He told GamblingCompliance that the measure would be ready within two weeks, and would promulgate a three to five license system throughout the Golden State.
The assemblyman said that they had weighed the question of opening the new licensing system to all comers or restricting the licensing to existing land-based operators.
“Our leaning right now, I have to tell you, is to keep it to the people who are already in California, and regulate it with our justice department which has already shown they know how to do that.
“We’ve got 68 compacted tribes, we’ve got some 95 card clubs, we’ve got horse racing tracks – why would we as Californians invite other people in to make money that we can pretty much make on our own?”
Still, Wright said he was opposed to more restrictive measures that would target those operators like PokerStars and Full Tilt currently taking play from Californians.
“If our attempt is to shut the other people down then I think we will lose the fight,” he said.
Estimates of how much taxation revenue a poker system could generate, presented at his hearing, varied wildly between zero and billions of dollars but Wright noted, “there is whole lot of space between squat and $4bn.”
Wright said he expected the introduction of his bill would trigger a series of consultations with tribal interests.
“The compacts give them the right to challenge what has been done,” said Wright, “but I’ve asked six lawyers and they all have different answers.”
“California has an underperforming asset – that’s not a good thing to have on your books – but I think we can honour the compacts that we did and also maximise the asset.”
Inevitably the proposal to introduce licensed online poker to America’s most populous and wealthy state came quickly under scrutiny from assembled tribal representatives.
Alison Harvey, executive director of the California Tribal Business Alliance (CTBA), told GamblingCompliance: “The senator has said there are five different versions of exclusivity – but there are 68 tribes each with their own compact. You can’t just group the tribes together.”
The CTBA's six gaming tribe members are the Jackson Rancheria Band of Miwuk Indians, the Lytton Band of Pomo Indians, the Pala Band of Mission Indians, the Paskenta Band of Nomlaki Indians, the United Auburn Indian Community, and the Viejas Band of Kumeyaay Indians.
The group, which recently cut its ties with renowned tribal gaming lawyer Howard Dickstein, has consistently stood in the way of measures that would introduce online gambling including one put forward last year by the Morongo tribe.
Harvey also took issue with Wright’s expressed belief that about half of the players that currently play on offshore sites would be drawn to play on state–licensed platforms.
“The state-run model is typically a monopoly, or semi-monopoly, and they are not efficient market tools – they’re not going to attract players because they are not going to be competitive with the continuing offshore sites.”
Harvey’s colleague, CTBA chairwoman Leslie Lohse, also took aim at ongoing federal attempts to regulate internet gambling noting that Congressman Barney Frank’s internet gambling proposals had brought with them little engagement with tribal views nationally.
“We received a ‘Dear Tribal Leader’ letter, but that does not constitute real consultation,” said Lohse.
“They will not get legislation in the states by outrunning the tribes.”
While the CTBA has not taken an official position on the Frank bill, Lohse said: “As Congress works on federal internet regulation Indian Country recognises the threat.
“We don’t believe Congress has the answer – we don’t believe they have the interests of tribal governments at heart.”
Lohse also noted that a provision in the Frank bill that would offer states the right to opt out of internet gambling might also impinge on tribal rights.
Still, Lloyd Levine, a former California assemblyman whose own online poker bill foundered in 2008, backed Wright’s efforts in California.
“The ban on online poker has been about as effective as the war on drugs and we’re starting to realise that we are missing out- we’re shipping wealth overseas.”
Since the demise of Levine’s bill California’s budget deficit has ballooned to in excess of $21bn, prompting reconsideration of every option that might deliver revenues.
Wright conceded that, “We won’t close the budget deficit with this, but the sooner you start the sooner you get to play.”
With his background as an experienced legislator and deal-broker some serious tribal administrators grudgingly accept that a Wright bill might have a fighting chance, particularly in the wake of recent successes in defusing the explosive issue of minimum internal control standards for slot machines between the tribes and the state government.
“The California lottery has reminded us not to be too prescriptive – there are a number of things we need to leave flexible,” said Wright.
“California has 68 compact-registered Indian tribes playing class III games,” he conceded.
“Our first argument will be whether or not playing online poker violates the compacts that were signed with those tribes – there is not even a unanimous opinion among the tribes themselves – so anything we do will have to go through the process of debating exclusivity and that could take two or three years.”
Currently California’s tribal compacts, drafted in 1999, grant tribal exclusivity over Las Vegas style class III gaming machines in exchange for hefty revenue share payments.
But many tribal observers argue that the introduction of state-supervised internet poker would constitute the arrival of gaming machines on the home computers of millions of Californians, invalidating the compacts.
“We will, in effect, initiate our own fact finding which could end up all the way in the Supreme Court,” said Wright yesterday.
Wright, who held a nine-hour informational hearing on the issue of online poker in Sacramento in February, currently has legislative assistants drafting language for a new bill.
He told GamblingCompliance that the measure would be ready within two weeks, and would promulgate a three to five license system throughout the Golden State.
The assemblyman said that they had weighed the question of opening the new licensing system to all comers or restricting the licensing to existing land-based operators.
“Our leaning right now, I have to tell you, is to keep it to the people who are already in California, and regulate it with our justice department which has already shown they know how to do that.
“We’ve got 68 compacted tribes, we’ve got some 95 card clubs, we’ve got horse racing tracks – why would we as Californians invite other people in to make money that we can pretty much make on our own?”
Still, Wright said he was opposed to more restrictive measures that would target those operators like PokerStars and Full Tilt currently taking play from Californians.
“If our attempt is to shut the other people down then I think we will lose the fight,” he said.
Estimates of how much taxation revenue a poker system could generate, presented at his hearing, varied wildly between zero and billions of dollars but Wright noted, “there is whole lot of space between squat and $4bn.”
Wright said he expected the introduction of his bill would trigger a series of consultations with tribal interests.
“The compacts give them the right to challenge what has been done,” said Wright, “but I’ve asked six lawyers and they all have different answers.”
“California has an underperforming asset – that’s not a good thing to have on your books – but I think we can honour the compacts that we did and also maximise the asset.”
Inevitably the proposal to introduce licensed online poker to America’s most populous and wealthy state came quickly under scrutiny from assembled tribal representatives.
Alison Harvey, executive director of the California Tribal Business Alliance (CTBA), told GamblingCompliance: “The senator has said there are five different versions of exclusivity – but there are 68 tribes each with their own compact. You can’t just group the tribes together.”
The CTBA's six gaming tribe members are the Jackson Rancheria Band of Miwuk Indians, the Lytton Band of Pomo Indians, the Pala Band of Mission Indians, the Paskenta Band of Nomlaki Indians, the United Auburn Indian Community, and the Viejas Band of Kumeyaay Indians.
The group, which recently cut its ties with renowned tribal gaming lawyer Howard Dickstein, has consistently stood in the way of measures that would introduce online gambling including one put forward last year by the Morongo tribe.
Harvey also took issue with Wright’s expressed belief that about half of the players that currently play on offshore sites would be drawn to play on state–licensed platforms.
“The state-run model is typically a monopoly, or semi-monopoly, and they are not efficient market tools – they’re not going to attract players because they are not going to be competitive with the continuing offshore sites.”
Harvey’s colleague, CTBA chairwoman Leslie Lohse, also took aim at ongoing federal attempts to regulate internet gambling noting that Congressman Barney Frank’s internet gambling proposals had brought with them little engagement with tribal views nationally.
“We received a ‘Dear Tribal Leader’ letter, but that does not constitute real consultation,” said Lohse.
“They will not get legislation in the states by outrunning the tribes.”
While the CTBA has not taken an official position on the Frank bill, Lohse said: “As Congress works on federal internet regulation Indian Country recognises the threat.
“We don’t believe Congress has the answer – we don’t believe they have the interests of tribal governments at heart.”
Lohse also noted that a provision in the Frank bill that would offer states the right to opt out of internet gambling might also impinge on tribal rights.
Still, Lloyd Levine, a former California assemblyman whose own online poker bill foundered in 2008, backed Wright’s efforts in California.
“The ban on online poker has been about as effective as the war on drugs and we’re starting to realise that we are missing out- we’re shipping wealth overseas.”
Since the demise of Levine’s bill California’s budget deficit has ballooned to in excess of $21bn, prompting reconsideration of every option that might deliver revenues.
Wright conceded that, “We won’t close the budget deficit with this, but the sooner you start the sooner you get to play.”
With his background as an experienced legislator and deal-broker some serious tribal administrators grudgingly accept that a Wright bill might have a fighting chance, particularly in the wake of recent successes in defusing the explosive issue of minimum internal control standards for slot machines between the tribes and the state government.
“The California lottery has reminded us not to be too prescriptive – there are a number of things we need to leave flexible,” said Wright.