California Tribes Displeased As DFS Pulls Ahead Of Online Poker

Group Of California Tribes Not Happy That DFS Bill Leap-Frogged Online Poker

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The struggles in California to pass online poker legislation have run into a new hurdle — daily fantasy sports.

This week, the Assembly Committee on Governmental Organization passed a bill from Chairman Adam Gray that would legalize and regulate DFS in California — by a margin of 17-1 — while leaving an online poker bill on the shelf.

That vote was perhaps both good and bad news simultaneously for the DFS industry. It marked progress on a bill that would give operators legal clarity on the state, but the bill moved forward despite the protests of some tribal gaming interests.

The tribes = not happy

Until this year, tribes in California had been silent on the issue of DFS, despite the fact that the bill voted on on Wednesday was introduced in September.

Then, just before the hearing, the California Nations Indian Gaming Association issued a statement indicating its displeasure at a DFS bill getting consideration before online poker legislation. Originally, the hearing was also set to consider iPoker and sports betting, before those items were removed from the agenda, leaving just DFS.

The tribes of CNIGA do not seem to be against the idea of regulation of DFS, at least publicly. And they did not appear at the hearing to voice either opposition or support of the bill.

But the press release made it clear that they aren’t excited that iPoker is on the sidelines:

Steve Stallings, chairman of the California Nations Indian Gaming Association (CNIGA), disappointed that Representative Adam Gray, chairman of the California Assembly Governmental Organization Committee, did not use the January 6 hearing to take the next step in legalizing and regulating online poker in the state.

That “disappointment” came because DFS was considered, according to a quote from Stallings:

“The regulation of fantasy sports is well intended. However, the state needs to prove it can deal with one online game–I-Poker–before it takes on others.”

Tribes, also surprised that CA DFS bill moved forward

In an interview with the Orange County Register, Stallings said before the hearing he didn’t think the DFS bill had support to move forward. Given Stallings’ tone there, it appears the tribes of CNIGA were blindsided by Wednesday’s nearly unanimous vote.

From the OC Register story:

In an interview prior to the hearing, Stallings said that he didn’t believe the DFS bill would have the necessary support to move through committee. Asked what CNIGA might do, if the bill did pass, Stallings suggested that tribal gaming interests would “absolutely” take action.

“This hasn’t had the kind of scrutiny from industry experts, law enforcement, or the justice department that Internet poker has had,” Stallings said. “The state of the legislation is the result of all of that input and information gathering. That hasn’t happened here. There are just too many unanswered questions.”

Of course, this week’s vote was just one step in the legislative process; the bill still must clear the Appropriations committee before it even comes up for a full vote in the Assembly. But it appears some tribal gaming interests could put their full weight behind quashing the progress of Gray’s DFS bill, which could be pretty bad news for its chances of passage in the short term.

Why DFS, but not iPoker?

Gray’s point in pushing the bill quickly is that DFS sites are already operating in the state, and will continue to do so for now, whether the legislature acts or not. (Hanging over that assessment is the idea that Attorney General Kamala Harris could weigh in on the legality of DFS.) The bill would offer consumer protections that currently do not exist in any U.S. jurisdiction.

Of course, the same argument could be made for online poker. Offshore poker sites still serve California customers, and might pull out if DFS became regulated in the state.

Stallings appears to have a pretty good point in saying that the issues in online poker have been thoroughly considered in the legislature. DFS has had a single informational hearing where the state’s gaming interests did not testify, and then Wednesday’s short hearing and vote.

More from Stallings from the CNIGA statement:

“Practice makes perfect applies here,” he explains. “The exercise of debating and approving I-Poker will prove useful in addressing additional details that arise in the new proposals of introducing sports wagering and licensing and regulating DFS.”

Complicating the online poker landscape

The DFS bill gaining more traction could make the online poker discussions state even more complicated.

The stakeholders in the state already have plenty of problems getting on the same page on the subject of online poker, and pushing a DFS bill that all of the tribes aren’t behind can add rancor to already contentious negotiations and discussions regarding poker.

Of course, CNIGA and several other interests also want to see online poker happen. Will CNIGA fight to stop DFS regulation, viewing it as a de facto expansion of gambling in the state that they aren’t really involved in?

Or will they let the issue go if promised that iPoker discussions and legislation move forward this year? The proof will be in the actions and words of CNIGA in the coming weeks.

- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner. He has played poker recreationally for his entire adult life and has written about poker since 2008.
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