Discussions Of California Internet Poker Legislation To Persist Postmortem
Bill To Die In Committee At End Of Month, But Efforts Are Far From Over
The tribes couldn’t come close to a consensus. Thus, the votes weren’t there for the bill to move forward. That’s the story of California’s online poker efforts this year.
The state has been called the “sleeping giant” of web poker by one of its gambling regulators.
While the bill is unofficially dead for 2012 (the legislative doors close Aug. 31), leaders in the state’s gaming industry will keep the dialogue alive in the coming months in order to have a shot at some resolution to the issue next year, a person close to the bill told Card Player.
There doesn’t need to be complete agreement among the tribes, card rooms and race tracks. Supporters have long said that Internet poker is about benefiting the state, and not necessarily its commercial or tribal gaming interests. California’s budget deficit has fallen into the abyss.
Sen. Rod Wright (D-Inglewood), the author of the measure, will continue the fight, the source said. “It’s his bill. There is no one entity that is sponsoring this bill.”
There has already been some compromise on the proposal. It has been decided that web gambling will be limited to poker — a key change to an earlier version of the bill.
Despite a bill not being passed, some groups in California have already forged partnerships with out-of-state firms that have the technology and the expertise to run an online poker site. Launching such software from scratch is immensely difficult.
The gaming interests that don’t have deals in place could be purposefully stalling, although none have explicitly indicated to California lawmakers that it’s their strategy, the source said.
Could PokerStars come to California?
Once upon a time, PokerStars was a driving force behind a bill in Nevada that would create rules for web poker. The Isle of Man-based company was aggressive; it offered to give the Silver State a cut of its rake generated globally. Nevada lawmakers bit and were working with PokerStars until it fell into hot water with the U.S. government in April 2011.
Now that PokerStars has settled with the Justice Department — the key being that it hasn’t admitted to any wrongdoing — the company has the opportunity to re-enter the U.S. if approved by some regulatory body overseeing Internet poker. According to the source, unless some language in the California bill is amended, PokerStars would be excluded from participating. The legislation precludes potential players that operated in the U.S. after December 2006 (around the time of the enactment of the Unlawful Internet Gambling Enforcement Act).
There hasn’t been any indication that the provision in the bill will be altered, according to the source. However, the state is still open to all sorts of arguments being brought to the table.
In other words, PokerStars wouldn’t be drawing dead for the most populous state in the country — if it wished to pursue business there. Same goes for Full Tilt Poker, which was acquired as part of the settlement agreement with the feds.
Zynga’s possible role in California web poker
Despite being headquartered in San Francisco, the social gaming machine wouldn’t be allowed to operate real-money web poker unless it partners with an existing gambling licensee.
Zynga doesn’t have a gambling license in the state because it hasn’t needed one.
Though, lawmakers in California have reached out to officials at Zynga to talk about the online poker issue, specifically with regards to social gaming, the person familiar with the matter said. According to the Wall Street Journal, Zynga has started to lobby for web gambling in California. However, Zynga isn’t necessarily behind the current proposal, Card Player was told.
Zynga, which runs a free-play poker game on Facebook with millions of active users per month, has started to look at Nevada through a partnership with Wynn Resorts (which had previously teamed up with PokerStars). Zynga hadn’t filed an application with the Silver State Gaming Control Board as of late last week.
No smooth sailing for bill
The California measure didn’t get out of committee in 2012. Even if it passes by a vote of 13-0 next year, it still has to work its way through inspection at other stages of the legislative process.
The good news is that if it does advance, the bulk of objections to the plan will have been flushed out.
While it may not look great on paper right now, online poker efforts have made significant progress, the source said.
“Three years ago everyone thought Sen. Wright was probably crazy to introduce the bill. There wasn’t a whole lot of support for it amongst the tribal communities, but that has changed. The issue has been out there, front and center, for a few years now, and that has helped educate a number of the gaming interests in California.”
As of early June, groups in opposition outnumbered supporters 15 to 10 (according to an analysis by the state legislature). The tide has slowly been turning.
California officials have shared information on the online poker industry with Nevada gaming regulators. Supporters in the Golden State haven’t yet looked at partnering with Nevada or any other jurisdiction; although that could be a logical next step at some point in the future.
Follow Brian Pempus on Twitter — @brianpempus
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