California Group Plans Political Push For Poker

American Indians, Tracks, Card Rooms To Press For Online Poker Despite Pechanga Coalition

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Five American Indian tribes are pressing forward on Internet poker legislation in California, hoping to overcome the political clout of what some characterize as an “obstructionist” coalition of tribes led by the Pechanga and Agua Caliente Indian bands.

Aiming for August vote on poker bill

The San Manuel and Morongo Mission Indians, the Rincon and Pala Luiseño Indians and the United Auburn Indian Community are aligned with Amaya/PokerStars and card rooms in a strong effort to get an online poker bill out of the 2015 session.

The horse racing industry and its organized labor is moving on a similar but parallel track, with all the stakeholders hoping to overcome political opposition from the Pechanga and Agua Caliente group.

“This is the biggest coalition yet behind Internet poker,” said Robyn Black of Eclipse Government Affairs, a lobby for the racing industry.

“If we get consumer groups you’re going to see the coalition grow. If it isn’t a success in 2015 it will be a force in 2016.”

A tribal leader from what has been dubbed the “coalition of the willing” said stakeholders hope to get a bill to a state Assembly floor vote shortly after legislators return from summer recess Aug. 17.

Meanwhile, the Pechanga/Agua Caliente coalition, which number as many as nine tribes with a strongly united core of at least four, remains opposed to licensing race tracks as poker website operators.

The coalition also accuses PokerStars of being a “bad actor” for accepting U.S. wagers after enactment in 2006 of the Unlawful Internet Gambling Enforcement Act (UIGEA).

Concluding that consensus is beyond reach

The rival Indian groups have apparently dismissed any notion they can reach consensus on the two divisive issues, stalling tribal unity many Sacramento insiders believe is crucial in getting an Internet bill requiring a 2/3rds majority out of the state Legislature.

“I don’t think there will be any movement,” said Jeff Grubbe, chairman of the Agua Caliente Band of Cahuilla Indians. The Pechanga/Agua Caliente coalition, he said, is steadfast in its opposition to licensing tracks and “bad actors.”

“No bill is better than a bad bill,” Grubbe said. “We’re more than happy to not even have Internet gaming. We’re fine with that.”

“The meetings have been pointless,” lobbyist David Quintana said of recent gatherings of tribal leaders from the two coalitions.

“Race tracks and PokerStars are insisting they be involved in this. If race tracks agreed to take a revenue share instead of a website license and if PokerStars stepped out of the picture we would have had I-poker six months ago.”

The Pechanga/Agua Caliente coalition, a powerful political group that includes the Viejas Band of Kumeyaay Indians and Yocha Dehe Wintun Indians, have aired advertisements and sent out vitriolic mailers targeting PokerStars, which in 2012 reached a $731 million settlement with the Department of Justice in connection with a bank fraud and money laundering indictment.

A test of political clout and will

But the “coalition of the willing” believes it can generate the political support needed to push through an online poker bill, perhaps as soon as this year.

“There is an intention to move forward and not accept the obstructionism of a small group of tribes,” said George Forman, attorney for the Morongo Band of Mission Indians.

Morongo and San Manuel and three Los Angeles area card clubs have a partnership with Amaya/PokerStars. The Rincon and Pala bands of Luiseno Indians and United Auburn Indian Community – dubbed the “RAP” group – do not oppose licensing tracks and PokerStars.

“The tribes on our side of the issue are fairly coordinated in terms of what we hope will be a good, strong run the balance of this session,” said Jake Coin, executive director of public affairs for the San Manuel Band of Serrano Mission Indians.

The racing industry and its Teamsters and Service Employee International Union (SEIU), “seem to be rolling in the same direction as well,” Coin said.

“We are, if you want to use your phrase, a ‘coalition of the willing.’”

The Morongo/San Manuel partnership has countered the Pechanga/Agua Caliente publicity effort with its own ad campaign while launching the website and sponsoring an in-state celebrity poker tour.

“For the first time in nearly seven years there is significant momentum on Internet poker legislation,” Rincon Chairman Bo Mazzetti said in a prepared statement. He declined an interview.

Rincon’s casino, Harrah’s Resort Southern California near San Diego, is managed by Caesars Entertainment, a lobbying partner of Amaya/PokerStars and owner of the World Series of Poker.

“I am hopeful that as soon as the legislature returns from [its] scheduled recess the full assembly will take up the issue,” Mazzetti said.

“I don’t think you can discount what can be done this year,” said Matthew Cullen, CEO of San Manuel Digital, the tribe’s online business enterprise “We’ve got essentially four weeks for things to happen,” Cullen said, before the legislature is gaveled to a close in September.

“For those people who say, ‘This thing is dead, nothing is going to go anywhere,’ that’s ridiculous.”

The legislative path from here

An Assembly Government Organization hearing on AB 167 sponsored by Assemblyman Reginald Jones-Sawyer is scheduled for Aug. 19, two days after legislators return from summer recess. AB 167 extends licenses to racing associations.

AB 431, a “shell” online poker bill with little language sponsored by GO Chairman Adam Gray, is on inactive status after passing GO and Assembly Appropriations Committee hearings.

Either bill or a merged version can conceivably reach a floor vote.

“Assemblyman Gray is moving this process,” Cullen said.

AB 9, an online poker bill sponsored by Assemblyman Mike Gatto limiting website licenses to tribes and card rooms, was shelved earlier this summer.

On the Senate side, SB 278, a “shell” bill sponsored by GO Committee Chairman Isadore Hall, has yet to be heard in committee.

Neither Hall nor Gray could be reached Friday for comment.

Racing flexibility could prove the linchpin

Although the split between the two politically powerful Indian groups is wide, some tribes are pressing legislators and labor unions to convince track owners to accept a revenue stream from online poker rather than insisting on eligibility for website licenses.

Pechanga Chairman Mark Macarro, in testimony before a June Assembly committee, said his tribe would embrace giving tracks a revenue stream in lieu of licenses.

Allowing tracks to operate websites, he said, would violate public policy for limited gambling in California and possibly encroach on the constitutional guarantee tribes have to operate casino gambling.

Pechanga and some other tribes have for more than a year expressed a willingness to divert a percentage of online poker revenue to the tracks. But Macarro’s testimony raised the eyebrows of legislators and lobbyists.

“He’s always whispered it, but he never said it publicly,” Black said of Macarro’s offer to the tracks. “It was an acknowledgment that racing has to be a part of this. For him to say that publicly, I think was a big deal.”

Track operators quickly rejected the offer. They along with thoroughbred owners and breeders and labor leaders fear a subsidy can be cut off by future administrations.

“What the legislators give us they can take away,” Black said.

The Legislative Counsel Bureau has opined that racing associations can legally operate websites if an online poker bill were approved. Online horse wagering has been legal in California since 2001.

Should tracks back off their demand for licensure, it would greatly increase the likelihood of consensus on I-poker among the state’s dozen or so politically powerful tribes.

“At the end of the day, if track owners had to choose between a revenue stream and nothing, you’d have to ask those guys in the racing industry if they would accept that,” Forman said. “I won’t speculate on what their answer would be.”

A Capitol Hill source who requested anonymity said the racing industry is not completely united on the issue.

“I’ve heard is they aren’t all on the same page,” the source said.

Barry Broad, lobbyist for the Teamsters and SEIU, denied speculation the labor groups are not supportive of the industry’s demand for online licenses.

“There is no truth to that,” Broad said in an email.

The Sycuan Band of the Kumeyaay Nation and Chairman Cody Martinez has been approached to help mediate differences between tribal leaders and racing executives.

Sycuan’s San Diego County casino includes an off-track betting facility blessed by the California Horse Racing Board and nearby Del Mar Race Track. And Adam Day, assistant tribal manager, is a former member of the board of directors for the Del Mar Fairgrounds.

Tribal officials could not be reached for comment.

“I don’t want to get into private discussions we’ve had with individual tribes,” Del Mar COO Josh Rubinstein said.

“We’ve had multiple conversations with several tribes and they all seem open and amenable to letting horse racing have an equal seat, to be able to have a license and operate a website.”

Image credit: Stas Enso /

- 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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