Tribal Issues On Online Poker Remain Unresolved, With No End in Sight

The First Hurdle Is Cleared, But Is 2016 Really Any Different For California?

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Wednesday was a landmark day for the possibility of seeing legal, online poker in California, after legislation passed a committee vote unanimously.

The legislature has been working on online poker legislation for nearly a decade, and the bill currently in the works is the closest there has ever been to consensus in the state.

But after the Assembly Governmental Oversight Committee moved the bill on to the Appropriations Committee, is the state realistically any closer to passing a law?

Depending on who you ask, the answer could be either yes or no, but getting the bill to the finish line this year might still be a long shot.

The bad: Tribal divisions don’t seem very close to being resolved

The biggest takeaway from Wednesday’s hearing? One of the most significant problems that has plagued the online poker bill in the past still remains: tribal divisions.

Other problems (see the horse racing industry’s involvement, below) might have been solved. But the so-called “bad-actor” debate — pitting coalitions of tribes against each other — appears to be raging still.

At issue is who is allowed to partner with online poker licensees. The sides:

  • The coalition of tribes led by Pechanga and Agua Caliente still wants to see a provision that blocks any online poker site that operated in the U.S. after the passage of the Unlawful Internet Gambling Enforcement Act of 2006.
  • Such a provision would stop PokerStars — aligned with a coalition included the Morongo and San Manuel tribes — from entering the California market.

While there had been some hope that progress had been made in bringing tribes closer together on the iGaming issue, any such progress was not visible on Wednesday.

Both Pechanga and Agua Caliente representatives spoke Wednesday when “neutral” testimony was being taken by the committee. But it was clear from their words that neither is very close to joining the “yes” camp.

GO Committee Chairman and bill sponsor Adam Gray promised that he was meeting regularly with tribes on this issue, and that the final language of the bill would be agreeable to all.

The problem: What exactly is the language that everyone would agree upon? If Pechanga and Agua Caliente still seem to be taking a hard-line approach on the suitability standard, getting to a consensus seems a long way off.

The good: Horse racing moves from opponent to proponent

The best news that came out of Wednesday’s hearing was that the horse racing industry stands nearly united on the online poker bill, after years of being against it.

Why? It wants that $60 million subsidy that is prescribed in the newest version of the bill. A big sticking point in past years has been who could be an online poker operator, a right that horse racing interests were not willing to give up previously.

Now, horse racing appears to be OK with staying out of the online poker business in exchange for cash.

The Stronach Group — which operates Santa Anita Park and Golden Gate Fields — was the only horse racing interest to rise in opposition to the bill.

Beyond that, however, horse racing interests were actively calling for the online poker bill to be passed, something that has not come into play in past iterations of the online poker debate.

There’s still also a question of if the subsidy for horse racing is realistic. Estimates for revenue generated from online poker suggest the $60 million figure is beyond what California can expect in the long-term, after licensing fees are handed over.

But, still, horse racing is on board for now, which was never the case previously.

The unknown: Conversation changes to ‘consumer protection’

The fact that Californians have been playing online poker despite what the law says has always been a part of the argument for regulation in the state.

But on Wednesday, the issue was put front and center, with the online poker bill being touted as a consumer-protection bill, more so than it has in the past.

The daily fantasy sports industry is being brought into the mix, as well. In January, the Assembly voted 68-1 to pass regulations overseeing DFS.

Poker Players Alliance Executive Director John Pappas and others brought up the dichotomy. From a press release after Wednesday’s vote:

“It begs the question: If fantasy sports players in California deserve consumer protection, why aren’t online poker enthusiasts being treated equally?,” said Pappas. “I  will  add  that  while  the  DFS  bill  does  provide  regulatory oversight of  that  industry,  A.B. 2863 is far more robust in the way it sets industry standards and safeguards consumers who wish to play poker online.

If you voted to support the DFS bill, then support for the online poker bill should be a no-brainer.”

Will this tack resonate more with lawmakers than arguments for regulatory bills in the past? The unanimous vote might be a sign of that.

The takeaway: Online poker still has a long road ahead

Many people were understandably excited by Wednesday’s vote, from poker players in the state to lawmakers who have been working on this issue for years.

But at the same time it’s difficult not to think back to April 27 of last year, when online poker also passed the GO Committee. That’s right — it was exactly one year ago that the committee advanced AB 431.

That was viewed as a historic day, but momentum behind the iPoker push quickly petered out in the following months.

Will things be different this year? Until the tribes all get on the same page — something that seems like a reach as things stand today — it is difficult to believe an online poker bill can become a law, let alone reach the Senate or the governor’s desk.

But, if you view incremental progress of any sort as a victory, 2016’s online poker debate is at least different than it was in 2015.

- 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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