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That’s not to say there wasn’t progress in 2015. But after a string of years ending with progress and no passage, it’s time to consider that the status quo approach to advancing online poker regulation is deeply flawed.
Drawing upon the lessons of those years yields four critical components of any successful strategy for finally legalizing California online poker in 2016.
California’s current stalemate is only tenable in a situation where voter pressure on lawmakers to act on the online poker issue is low. That’s unfortunately the case in California, where even supportive lawmakers have repeatedly stated that the issue simply doesn’t register with their constituents.
Increased voter pressure would give lawmakers the motivation (and cover) to either force a resolution or act in spite of a lack of consensus among stakeholders.
The route to that pressure is an advocacy group that:
The fact that 2016 is an election year only increases the power that such a group could wield – even with relatively modest resources.
Those who watched the various online poker hearings held in 2015 by the California Assembly no doubt noticed a thread running through all: the California DoJ and the California Gambling Control Commission have made it clear that they’re not being given the resources they need to manage their current remit, let alone online poker.
As long as that issue remains unresolved, there will always be an easy reason to defer action on online poker.
Stakeholders who want to see online poker pass must advance a legislative package that specifically articulates funding and support for the relevant agencies. That alone may not be enough – stakeholders should considering simultaneously tackling the issue of separate, broader increases in funding and support for relevant agencies.
There is little reason for PokerStars to be the public face of an online poker advocacy effort in California, or for PokerStars to be taking part in public hearings regarding online poker:
PokerStars has a role to play, and valuable resources to contribute. But that role should be played primarily behind the scenes, and those resources deployed in a peripheral fashion.
I posses only a surface appreciation of the racing industry in California. So there may be nuances that escape me. But my understanding is that the industry is under significant – perhaps existential – financial pressure.
I am far more familiar with the potential of the regulated online poker market in California. I believe that there will be precious few true winners on the operator side – perhaps only one or two. Those winners will be competing for an operator profit pie (I estimate $6mm to $12mm a year) that is far smaller than most imagine.
Within this context, it surprises me that the racing industry is holding out for the right to operate online poker in California:
If I am a track operator in California, I’m pushing for a healthy revenue share that goes to purses and the guaranteed (and possibly exclusive or semi-exclusive) right to own a branded skin on someone else’s network.
Now, it may be that the tracks see online poker as a step toward online casino, and tracks want to secure a place in that conversation. That’s fair, but it misses the plot on two levels:
In any case, advocates of online poker need to develop the best deal possible for racing that doesn’t involve operational licenses, and aggressively sell that deal to racing interests.
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