Chris Grove of OnlinePokerReport.com and Kendall Saville of CaliforniaOnlinePoker.com provided live commentary as the source of this report.
The Capitol Weekly “Conference on Online Gaming” held on May 22 continued the mood of inevitability about regulated online poker coming to California.
The early session spent time discussing potential revenues with estimates from various sources varying wildly. Anita Lee from the Legislative Analyst’s Office estimated that non-US regulated offshore gambling sites were generating revenues of $300 to $400m from California players.
PokerStars and Bad Actor Clauses
There was considerable debate about “bad actor” clauses, mainly centering on whether PokerStars should be considered eligible to receive a license.
Reference was made to the brief filed with the New Jersey Casino Control Commission and Division of Gaming Enforcement—during the deliberations in New Jersey—by the American Gaming Association (AGA) condemning PokerStars.
The line PokerStars supporters took included the argument that PokerStars had only offered poker which is a “skill game” and that only sites which offered gambling games should be covered by any bad actor clause. This argument was also used to explain that PokerStars had not violated tribal sovereignty.
PokerStars supporters also argued that legislation drawing a bright line that excludes those that operated in the US after December 31, 2006—a date proponents consider arbitrary—serves as an anti-competition measure and not an indicator of a “bad actor.”
PokerStars presence was very visible at the conference:
Robert Martin, Chairman of the Morongo Band of Mission Indians, which has signed a deal with PokerStars to launch online poker following regulation, reiterated his position that the tribe would oppose any bill which excluded PokerStars, and that it was the regulator’s job to determine suitability.
He also reinforced his commitment to be involved in the market, saying that in the event that PokerStars was deemed unsuitable, they would not contest the decision and find another partner.
US Regulation is Working but Adelson is a Concern
Richard Schuetz, Commissioner of the Gambling Control Commission, made the case that regulation has worked effectively in New Jersey. He also identified challenges that the state had faced such as geolocation, content, consumer awareness and image.
Schuetz warned that Sheldon Adelson’s pledge to spend whatever it takes to stop internet gambling should not be dismissed lightly.
Fabian Núñez, a former state assemblyman and now partner in public strategy firm, Mercury, highlighted the talking points of those opposed to regulating online gambling.
He noted that other states had over-promised and under-delivered on revenues. He also opined that offshore operators could not be stopped at the state level and quoted a partisan survey that concluded that 70% of Californians do not want online gambling and fear children getting access.
A Tight Schedule Must be Met to Get Legislation This Year
Jeff Grubbe, Chair of the Agua Caliente Band of Cahuilla Indians, said that the next online poker hearing in California would take place in June—there are currently bills before both houses of the legislature to introduce state regulated online poker.
He also explained why the momentum to get legislation passed had arisen:
There remains considerable doubt as to whether the bills can get the necessary support for implementation this year, but the conference participants, including representatives from tribal interests, clearly expected the introduction of online poker to be inevitable.