Racetracks Attempt To Nose In On CA Online Poker

California Race Tracks “Deserve Seat” At The Online Poker Table, Says Del Mar COO

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The California horse racing industry’s exclusivity with Internet gambling should be a major consideration if iPoker is to become legalized in the state, Del Mar Thoroughbred Club COO Josh Rubenstein said Monday.

Rubenstein, in an interview with Online Poker Report, said it is wrong for American Indian governments to demand that iPoker legislation limit website licenses to tribes and card rooms.

Tracks see online poker as a natural progression for the industry

“The horse racing industry has exclusivity with web-based gaming in California,” Rubenstein told Online Poker Report. “It’s a big part of what we do. We’re pretty good at it.

“We’ve operated it in a regulated fashion since 2001, everything from age verification to protecting the customer’s identity and making sure transactions are completed in a very timely manner. You can make the argument racing is as qualified as anyone in this forum.

“We think that because the horse racing industry has exclusivity in that space it’s pretty logical that with any expansion of Internet wagering that horse racing needs to have a seat at the table.”

Rubenstein reiterated the industry’s refusal to take a subsidy in lieu of eligibility to be licensed to operate iPoker websites.

“We’re looking for a level playing field if there’s any expansion of Internet wagering in the state,” he said.

“We’re not asking for a subsidy. We’re not asking for a handout. We’re not asking for preferential treatment. We’re just asking for a level playing field.”

Tribal factions differ on racetrack eligibility

A coalition of seven tribes led by the Pechanga Band of Luiseño Mission Indians of Temecula contend extending licenses in iPoker legislation to the racing industry would constitute a violation of public policy in support of limited gambling in California.

Six of the tribes in a March 11 letter to Assemblyman Reginald Jones-Sawyer said California voters have consistently rejected expanding gambling in the state, defeating a 2004 referendum to install slot machines at the tracks by an 84-16 percent margin.

“It must be noted that the voters of California have voted on multiple occasions … in support of tribal government gaming and have given overwhelming approval to a constitutional amendment granting Indian tribal governments exclusive authority over Las Vegas-style casino gaming,” tribes said in the letter.

While the Jones-Sawyer legislation would extend licensing to tracks, a bill proposed by Assemblyman Mike Gatto would limit websites to tribal governments and card rooms.

Identical “shell” bills authored by Senator Isadore Hall and Assemblyman Adam Gray do not address license eligibility. Hall and Gray chair committees which would scrutinize an Internet bill.

Although the Pechanga coalition opposes licensing racetracks, other tribes do not object to racing’s involvement in iPoker. They include the Morongo and San Manuel bands of Mission Indians in partnership with Amaya/PokerStars and the Pala, United Auburn and Rincon tribes.

Card rooms are not against licensing of tracks

California’s card room industry is also unopposed to racing’s involvement in iPoker.

“We’ve had very positive conversations with multiple tribes and card clubs,” Rubenstein said. “There is among some groups very much a willingness to have horse racing be a part of this.”

The Pechanga coalition is believed to be politically strong enough to block unwelcomed legislation.

But political insiders also suspect the racing industry’s support of an iPoker bill may be necessary in getting legislation requiring a two-thirds vote through the Assembly and Senate.

Gov. Jerry Brown said he would not sign into law an iPoker bill that does not have the racing industry’s seal of approval.

The multi-faceted, largely agricultural racing industry spans most of the state’s legislative districts, encompassing tracks, thoroughbred owners and breeders and the Teamsters and Service Employees International Union (SEIU).

The industry employs some 50,000 people “working directly at the tack and, indirectly, growing hay and alfalfa in the Central Valley,” Rubenstein said, and contributes some $2.5 billion a year to the state’s economy.

“We’ve spoken to a lot of people in Sacramento and they seem to be very sympathetic to horse racing and horse racing interests,” Rubenstein said.

Despite the fact the state racing industry has in the last five years witnessed the demise of Hollywood Park, Fairplex Park and Bay Meadows, it is showing signs of rebounding, Rubenstein said.

He said Del Mar, Santa Anita, Los Alamitos, Golden Gate Field and the fair associations are vibrant operations.

Online poker seen as a potential lifeline for CA’s struggling horse racing industry

California is the only statewide racing industry that lacks alternative wagering, such as slot machines and table games, yet it ranks second in purses behind New York. A third of the New York purses come from slot machines.

Racing industry revenues fell 45 percent with passage of a 2000 voter initiative allowing tribal casinos.

“If there were to be [iPoker] legislation without racing it could be critical to our industry,” Rubenstein said.

While most political observers give iPoker long odds of getting through the legislature, Rubenstein expressed optimism.

“I’m a glass half-full guy,” he said.

But he cautioned it will take cooperation by stakeholders.

“It’s going to take a two-thirds vote, regardless of the Pechanga [coalition] or the racetracks,” he said. “If there’s a group out there opposed to legislation it will be tough to get it through.

“It’s going to take people meeting in the middle.”

- Dave Palermo is an award-winning metropolitan newspaper reporter. He has written about American Indian governments for more than 20 years, working as an advocate for several tribes and tribal associations. He also has co-authored books on gambling and gambling law.
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