Tribal Coalition’s ‘Significant Concession’ On California Online Poker Is Likely A Non-Starter For Opposing Side

A coalition of California tribes opposed to current online poker legislation in the state has proposed amendments to the bill that would remove the coalition’s opposition.

A letter with the proposed amendments from the coalition led by the Pechanga Band of Luiseño Indians and Agua Caliente Band of Cahuilla Indians to Assemblyman Adam Gray, sponsor of AB 2863, came as rumored action for online poker on the Assembly floor on Thursday failed to materialize.

The bill was voted out of the Appropriations Committee last week.

However, the proposed amendments appear to be a non-starter for a competing coalition of tribes and card rooms aligned with PokerStars.

The proposed suitability language vs. current language

As currently written, AB 2863 contains these provisions for so-called “bad actors,” or sites that took U.S. players after the UIGEA took effect in 2006:

• Sites would have to wait five years to be licensed in California OR
• Sites could pay $20 million for the ability to immediately apply.

The proposed amendments change the bad-actor provisions to:

• Sites would have to wait 10 years to be licensed in California AND
• Sites would have to pay $60 million to enter the market after the 10 years is up.

The biggest change, obviously, is the addition of the “and” to the penalty, instead of an “either-or” proposition.

Lawmakers in the state also seem intent on extracting a “pound of flesh” for PokerStars to enter the market. However, the site’s willingness to pay any money after sitting out a decade in what would at that point be a mature market is in question.

A statement from Eric Hollreiser, Amaya’s VP of Corporate Communications, suggested an answer to that question:

It is a shame that obstructionist forces continue to block the passage of a pro-consumer online poker bill in California. We finally have real progress this year, with the majority of gaming tribes supporting the legislation, along with the AFL-CIO, SEIU,Teamsters, horse racing tracks, card rooms and gaming operators. Unfortunately, a recent amendment to AB 2863 is unconstitutional and our opponents seem intent to expand upon that flawed and unconstitutional language.

Progress, or not?

In theory, the letter from the Pechanga coalition does represent movement toward a resolution. Previously, anything that would have allowed PokerStars into the California market was opposed by these tribes.

Now, the coalition is at least offering language on operator suitability with which it would be happy. From the letter:

As a follow up to our June 27th Stakeholder meeting, we write to provide you with amendments on the suitability language that, if accepted in their entirety, would not only remove our opposition, but would take us closer to a support if amended position on the measure.

More from the letter:

We note that this represents a significant concession from our longstanding position of permanent disqualification of assets used in illegal activities and provides a pathway for offshore service providers to access the California market.

But if the coalition sticks to the proposed amendment as its best and final offer, it is likely fairly meaningless. That language is so extreme as to almost certainly make it a poison pill for the PokerStars coalition, led by the San Manuel and Morongo bands of Mission Indians.

Pechanga et al may be attempting to counter accusations of obstructionism leveled by proponents of online poker in the state. Now, the coalition has at least offered a solution, untenable though it may appear.

If the letter and proposed amendments represent a willingness to actually negotiate further, it represents real progress. For instance, changing the timeout and penalty fee to an “or” instead of an “and” requirement could mark the start of a path to an answer for all sides.

But the idea that the Pechanga coalition would agree to such a change would be optimistic at best. As a result, the letter likely represents little in the way of meaningful progress for online poker in the state.