Pechanga Not Solely To Blame For Lack Of Online Poker Regulation In California

View: PokerStars Is Also An ‘Obstructionist’ When It Comes To California Online Poker

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The term “obstructionist” has been thrown around a lot in the California online poker debate in recent weeks.

It’s been used to describe the coalition of Pechanga Band of Luiseño Indians, which has been leading the charge against legislation to legalize and regulate online poker in the state.

In the end, though, are they the only ones stopping progress for online poker in California?

On one side, some tribes against PokerStars

The coalition led by Pechanga and the Agua Caliente Band of Cahuilla Indians is wholeheartedly opposed to PokerStars getting into the California market, should online poker be legalized.

That group recently said it made asignificant concession in negotiations regarding iPoker on suitability. That concession? Sites considered to be so-called “bad actors” would have to wait 10 years to be licensed in California and would have to pay $60 million to enter the market after the 10 years is up.

Those terms are aimed directly at PokerStars, of course, an online poker site with which some tribes and cardrooms in the state are aligned. The argument goes that PokerStars — now owned by Amaya — served the U.S. market from 2006 to 2011, when online poker was illegal federally because of the UIGEA.

While the concession does represent movement from that group, it also amounts to be a non-starter in negotiations. PokerStars and its coalition might agree to an either-or proposition on the timeout and the penalty fee, but not both (unless one or both are significantly reduced).

So, Pechanga et al. are being termed “obstructionist” because they won’t budge from making it nearly impossible for PokerStars to be a part of the market.

But guess who else won’t budge?

The flip side of the Pechanga coalition

While calling that coalition “obstructionist” might be accurate, is it any less true of the other side?

Think of it this way: If PokerStars weren’t involved in the proceedings in California, would the state already have online poker? It’s pretty clear the answer is “yes.”

Sure, it’s possible the Pechanga coalition would move the goal posts yet again to try to stop online poker. But it has also said it would probably support legislation if its proposed “bad actor” provision was added to the bill.

So what is the PokerStars coalition doing, at core? It’s not much different than what Pechanga’s coalition is doing: Both coalitions are acting in what it they believe to be their best interests.

PokerStars, of course, paints itself as a champion of online poker, trying to bring the game back to the masses in California.

In reality, the company is looking out for its bottom line and its future in regulated U.S. online poker markets. Letting California call PokerStars as a “bad actor” could be a death sentence for the company in other U.S. jurisdictions moving forward.

PokerStars is also stopping online poker progress

Is what PokerStars doing “obstructionist”? You can certainly make an argument that it is.

PokerStars is staying involved so that it gets a seat at the table. It won’t let online poker in California move forward if it can’t be involved. (To its credit, it built a powerful coalition to help support that stance.)

Yes, the situation is lot like the chicken and the egg: One rigid coalition might not exist without the presence of the other. (Or a game of chicken, if you prefer, with a head-on collision appearing to be the most likely result, in that metaphor.)

But make no mistake: PokerStars is just as responsible as the opposing tribes for there not being online poker regulation in California. If Amaya/PokerStars were to bow out, it would likely be smooth sailing.

Of course, that’s not something that is going to happen, nor am I suggesting it should happen.

Is there anything wrong with PokerStars being obstructionist?

If I were in charge of PokerStars, I would probably do nothing differently. Give up the biggest U.S. state in terms of online poker liquidity to other operators? No way. It’s difficult to chastise them for looking out for themselves.

And, personally, I think Amaya-owned PokerStars, as currently situated, does not deserved to be treated as a “bad actor” anymore. It’s the largest, most licensed and most trusted online poker brand in the world right now. Calling them a bad actor isn’t fair; but as we all know, life isn’t fair.

To expect PokerStars to give up the California market simply for “the good of online poker” is beyond the pale. But, in the end, let’s say what PokerStars is really doing: It is stopping good public policy simply so it can be part of the market.

But it’s difficult for observers like me to blame them for their lobbying effort.

Right and wrong?

Simply put, the narrative that the Pechanga coalition is “wrong” and PokerStars is “right” creates a black and white picture that is not terribly accurate.

PokerStars’ side is more defensible, certainly, and in an ideal world it would get its way. But Pechanga’s stance is defensible, too — it thinks PokerStars is a bad actor (maybe), and doesn’t want to give a company that would likely dominate the market an easy entry into California (definitely).

So we’re left with the proverbial irresistible force and immovable object on opposing sides of the California online poker debate.

And if they don’t come to some sort of compromise — something that seems increasingly unlikely — no one wins, and it doesn’t matter who is right or wrong.

- 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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