California Stakeholders Call For Consensus, But On What Terms?

In California Online Poker Debate, All Agree On Need For Agreement (But Little Else)

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American Indian Leaders Urge Tribal Consensus on Online Poker and ‘An Open Mind’ on Race Track Licensing

Two influential American Indian tribes are publicly asking a politically powerful tribal coalition to ease its opposition to extending eligibility for online poker website licenses to California race tracks, but skepticism remains that a bill will make it out of the legislature this year.

Council member Laurie E. Gonzalez of the Rincon Band of Luiseño Indians in a May 20 press release urged that tribes reach consensus on online poker legislation “rather than digging their heels into the ground,” an obvious reference to steadfast opposition against licensing race tracks by the Pechanga Band of Luiseño Indians and six other coalition tribes.

Chair Lynn Valbuena of the San Manuel Band of Serrano Mission Indians, in a Thursday keynote to a Capitol Weekly gambling conference, also called for tribes to reach consensus, saying her tribe had “an open mind” about licensing race tracks.

“We’re evaluating all of our options right now, with the race tracks,” Valbuena said.

“As we all know there are tribes who are opposed to having the tracks in. We have an open mind. We’re still discussing those issues and looking at every option available.”

The arguments surrounding exclusion

The Pechanga coalition – understood to include the Agua Caliente Band of Cahuilla Indians, the Barona Band of Mission Indians, the Lytton Band of Pomo Indians, the Sycuan Band of the Kumeyaay Nation, the Viejas Band of Kumeyaay Indians and the Yocha Dehe Wintun Nation – contends extending licenses to the racing industry would violate public policy for limited gambling in California.

The group also believes offering poker beyond tribes and card rooms would erode the constitutionally guaranteed exclusivity tribal governments have to operate casino gambling.

“The only entities that can play poker in California are Indian tribes and card clubs, period,” Pechanga Chairman Mark Macarro told attendees of the April GiGse Conference in San Francisco.

Racing officials argue they have a legal right to operate poker websites if legislation were enacted to permit online poker. They contend they will not settle for a subsidy from online gambling revenues.

Valbuena, a respected Indian advocate for some 40 years and a leader with the National Congress of American Indians, is urging California tribes to unite on Internet poker as they did in passing ballot initiatives in 1998 and 2000 which paved the way for what is now a $7 billion tribal government casino industry.

Fifty-eight tribes operate 60 casinos in California.

“This has been going on for seven years,” Valbuena said of the debate on I-poker, “and we need to get this done … this year, in 2015. We are all tribes with the same goals and objectives and we need to stay together and work this through to get a bill passed.”

“We on San Manuel view (online poker) as a business opportunity and not a threat to the greater community of California Indian tribes,” said Valbuena, who also heads the Tribal Alliance of Sovereign Indian Nations, a politically active group of Southern California tribes.

“San Manuel has believed all along that I-poker in California is a commercial gaming matter,” she said, an industry which would be taxed and regulated by the state, rather than government gambling under the Indian Gaming Regulatory Act.

“We do not believe our exclusivity for… Class III casino-style gaming in California is threatened by authorizing I-poker in California,” she said.

No consensus, no bill

Political experts believe consensus among about a dozen prominent Indian tribes is necessary to get online poker legislation out of the 2015 session.

But tribes remain split on licensing eligibility as well as “bad actor” and “tainted assets” provisions related to PokerStars, accused of taking U.S. wagers after passage in 2006 of the Unlawful Internet Gambling Enforcement Act.

The regulatory issues appear to be solvable, but tribes are deadlocked on whether race tracks should be allowed to operate poker websites.

The Pechanga coalition is drawing a proverbial line in the sand on the tracks while San Manuel and the Morongo Band of Mission Indians – in partnership with Amaya/PokerStars and the Commerce, Bicycle Club and Hawaiian Gardens card rooms – appear receptive to licensing the racing industry.

Rincon, whose Harrah’s Rincon casino is managed by Caesars Entertainment, the Pala Band of Luiseño Indians and the United Auburn Indian Community, operators of Thunder Valley Resort Casino near Sacramento, have endorsed draft legislation sponsored by Reginald Jones-Sawyer that would license tracks.

Caesars Entertainment has a lobby partnership with Amaya/PokerStars. United Auburn is partners with Digital Entertainment. And Pala and its online gambling enterprise, Pala Interaction, operate in New Jersey.

Multiple groups have power to derail

A number of tribal leaders believe support from the racing industry and its labor unions is needed to get an Internet bill requiring 2/3rds vote out of the legislature this session.

Stakeholders, politicians and political consultants at the Capitol Weekly conference were almost unanimous in their belief an Internet gambling bill will not be enacted in 2015, primarily due to the lack of tribal consensus on the issue.

“Both groups of tribes have a great deal of political power,” said Phil Recht, a partner with Mayor Brown consulting, and could block unwanted legislation.

Those predicting failure include Assemblyman Mike Gatto, sponsor of a draft bill that would limit licenses to tribes and card rooms. Gatto said there is no public clamor for I-poker legislation among district constituents.

Politicians have little motivation to move

Legislators “are not going to get in the middle” of a dispute between the Pechanga and Morongo tribes, said Lloyd Levine, a former California assemblyman who once sponsored an online gambling bill.

“There will be no bill until all of the lobbying money is spent” added former Sen. Roderick Wright, a champion of Internet legislation who resigned following a January 2014 conviction for voter fraud.

Will the debate produce results?

Keith Sharp, a card room attorney, said “there are some stakeholders” intent on blocking any online legislation, an apparent reference to the Pechanga coalition.

“I don’t think that’s accurate at all,” Viejas Attorney General Tuari Bigknife said of allegations the coalition did not want to see any Internet gambling in California.

Bigknife said the group simply believes allowing tracks to operate poker websites would be an unwarranted expansion of gambling in opposition to public policy, noting tribes offer poker under federal law while card rooms operate under state law.

“That is why the license eligibility is critical,” he said.

Robyn Black of Eclipse Government Affairs, a racing industry lobbyist, said tracks have offered online wagering for nearly 15 years and noted the Legislative Counsel Bureau said tracks would not be prohibited by law from offering online poker if it were to become legal in California.

A recent Los Angeles Times editorial and an opinion page article by Rincon Chair Bo Mazzetti in the San Diego Union-Tribune both encourage passage of online poker legislation for consumer protection.

“We can’t slow down now. We can’t lose the momentum,” said Valbuena, noting that a recent legislative hearing generated “an impressive list of supporters” for I-poker that included “labor, tribes, card rooms, tracks and consumer groups.”

“We have more commitment to move forward than we have ever seen before,” Valbuena said. “We are closer than ever to a successful I-poker bill that unites the state’s diverse stakeholders in the gaming business.

“We are in a position of strength. We need to seize this opportunity,” she said, particularly with ongoing efforts on Capitol Hill to ban online gambling.

“We cannot take our eye off what’s happening also in Washington, D.C.,” Valbuena said. “It’s in our best interests to make sure that this remains a state’s rights issue.”

- 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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