Existing U.S. Online Poker Brands Will Likely Dominate California Online Poker Market
Online Poker Report

How Will The California Online Poker Landscape Shape Up If Legislation Is Passed?

California online poker provider scenarios
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With stakeholders unable to reach a compromise agreement on several key issues, California looks like a long shot to pass an online poker bill this year. If online poker legalization fails again, the state will be marred by a decade of inaction on this issue.

With three states and counting having already legalized online gambling, and momentum clearly on the side of legalization, California needs to make a move or it risks utter stagnation on this issue. 

But what happens if it does pass a bill this year or down the road? Passage in California would raise a new, intriguing question: Which online poker operators will the various tribes and card rooms select?

A number of stakeholders have already stated their intentions on this front, but others have not.

There are multiple key gaming tribes in this debate that haven’t settled on an online gaming platform (at least publicly anyway), not to mention the dozens of card rooms that will likely weigh the pros and cons of getting into the online poker business.

Fewer options than one would think

With a rash of merger and acquisitions across the online gaming sector in recent years, viable online poker providers with a willingness to jump into legal U.S. markets are sorely lacking.

PokerStars, 888, PartyPoker, Pala, and Churchill Downs are the only online poker operators currently on board.

That said, the size of the California market may bring several other companies out of the woodwork, be it startups like HDPoker, or current operators (capable of passing whatever bad actor litmus test California institutes) in other markets like iPoker or MPN.

One other possibility is the return of Full Tilt, considered by most to be the second best online poker platform in existence.

The platform was considered redundant and scrapped by PokerStars earlier this year, but it remains a valuable and appealing asset, especially when you consider the lack of viable online poker platforms in existence.

It’s unclear if California is a big enough carrot to attract more online poker platforms. California may have close to 40 million residents, but based on analysis by Chris Grove, the market would have trouble sustaining more than a handful of online poker sites and networks.

With several of these platforms already taking shape, there doesn’t seem to be much space for more than a single new platform to emerge, making it more likely the current card rooms and tribes that lack an online partner would join with an existing coalition.

The current landscape

PokerStars

This partnership spans a number of tribes and cardrooms, including: Morongo Band of Mission IndiansSan Manuel Band of Mission IndiansBicycle Casino, Gardens Casino, Commerce Casino, and a PokerStars-branded site.

888

Currently made up of the Rincon Band of Luiseño Indians (partners with Caesars / WSOP)Bay 101 Casino, and likely an 888-branded site.

Pala

Currently limited to the Pala Band of Mission Indians.

bwin.party

As of the last formal word on the matter, this partnership includes the United Auburn Indian Community and the PartyPoker brand.

Churchill Downs

Again, no updates in some time on this, but as of last word the partnership included: Ocean’s Eleven Casino and Crystal Casino.

What becomes abundantly clear looking at the above partnerships is the strength of the PokerStars coalition.

Not only is PokerStars considered to possess the best product and best online poker brand, but its coalition is much stronger and more diverse than any other, comprised of two powerful gaming tribes, and three of the state’s biggest card rooms.

Stakeholders lacking an online partner

 

Pechanga and its allies
  • Pechanga Band of Luiseño Indians
  • Agua Caliente Band of Cahuilla Indians
  • Cachil Dehe Band of Wintun Indians
  • Lytton Band of Pomo Indians
  • Paskenta Band of Nomlaki Indians
  • Viejas Band of Kumeyaay Indians
  • Yocha Dehe Wintun Nation
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Other tribes who have shown interest in online poker
  • North Fork Rancheria of Mono Indians
  • Sycuan Band of Kumeyaay Indians
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Card rooms that support online poker
  • Napa Valley Casino, American Canyon
  • Lake Elsinore Casino, Lake Elsinore
  • Stones Gambling Hall, Sacramento
  • 500 Club Casino, Clovis
  • California Grand Casino, Pacheco
  • Casino M8trix, San Jose
  • Club One Casino, Fresno
  • Oaks Card Club, Emeryville
  • The Deuce Lounge and Casino, Visalia
  • Players Casino, Ventura
  • Marina Club, Marina (Monterey County)
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So where do these tribes and card rooms go? The possibilities are boundless, but here are three scenarios I can envision unfolding.

Alternate universe #1: Status quo persists

Under this scenario, little changes. Pechanga and its coalition join forces with a to-be-named online operator, and the current partnerships remain intact, with some additions from the free agent card rooms and tribes.

This seems like the scenario most people think will unfold in California.

PokerStars

Maintains existing partnerships, adds new card room partners.

888

Maintains existing partnerships, adds

  • Some member of the Pechanga coalition
  • Some card rooms

Pala

Currently anchored only by Pala. Adds:

  • Some member of the Pechanga coalition
  • North Fork Rancheria of Mono Indians
  • Sycuan Band of Kumeyaay Indians

bwin.party

Maintains existing partners.

Churchill Downs

Maintains existing partners, adds new card room partners.

Unknown provider

  • Pechanga Band of Luiseño Indians
  • Agua Caliente Band of Cahuilla Indians
  • Some other members of the Pechanga coalition

Upshot

The problem I see with this scenario is there would be six networks, with Pala, Churchill Downs, and PartyPoker being clear second fiddles to PokerStars, 888, and with whomever Pechanga aligns itself.

Furthermore, PokerStars looks like it would be the clear top dog, which is precisely what Pechanga and its allies are trying to avoid.

Alternate universe #2: Increased consolidation

Under this scenario, there is far more consolidation, as key members of the groups that have been at odds with one another end up joining forces, creating one dominant network. This would require a massive compromise on both sides, but the financial benefits they would reap would certainly help smooth over any hurt feelings.

The remainder of the opposition coalition, along with the free agent card rooms and tribes would likely team up with some of the other existing platforms, capable of offering them better deals than PokerStars.

I could also see UAIC ditching PartyPoker (their agreement was entered into prior to the sale of bwin.party to GVC) and joining 888, although it should be noted UAIC has said it has no intention of breaking up with PartyPoker.

Here’s how things could shake out under this scenario.

PokerStars

Maintains existing partners, adds:

  • Pechanga Band of Luiseño Indians
  • Agua Caliente Band of Cahuilla Indians
  • Some other members of the Pechanga coalition
  • Card rooms

888

Maintains existing partners, adds:

  • United Auburn Indian Community
  • Some member of the Pechanga coalition
  • Card rooms

Pala

Maintains existing partners, adds:

  • Some member of the Pechanga coalition
  • North Fork Rancheria of Mono Indians
  • Sycuan Band of Kumeyaay Indians

Churchill Downs

Maintains existing partners, adds some card room partners.

Upshot

The PokerStars coalition has grown even stronger, as have the other platforms, particularly 888. With the removal of PartyPoker, the market has consolidated around just four online poker operators.

Alternate universe #3: The return of Full Tilt

This scenario will raise a lot of eyebrows, and probably be laughed at, but considering how muddy the situation in California is, I’m not ruling anything out.

In this scenario, the Pechanga coalition creates its own platform, but does so by acquiring/using the now defunct Full Tilt.

Consider for a moment that Pechanga and its allies seem unlikely to give an inch, since it means ceding market share superiority to PokerStars and its allied tribes and card rooms. Currently, it’s asking for a 10-year sit-out penalty and a $60 million fine. This is simply an untenable position, and a complete non-starter for the other side.

So what’s the solution?

What if the “fee” PokerStars pays to California is the now-offline Full Tilt? FTP is a terrific product, and would allow Pechanga and company to offer an online poker platform capable of competing with PokerStars and its coalition.

It’s unclear how this asset transfer would occur, but it would certainly solve a lot of problems, as Pechanga would have to ease its tainted asset stance if it was utilizing a similarly “tainted” online poker platform.

Most of the other networks remain the same, with some card rooms and tribes joining, and UAIC could remain with PartyPoker or jump ship to 888.

PokerStars

Maintains existing partners, adds some card room partners.

888

Maintains existing partners, adds some card room and tribal partners.

Pala

Maintains existing partners, adds some tribal partners.

bwin.party

Maintains existing partners.

Churchill Downs

Maintains existing partners, adds some card room partners.

Full Tilt

  • Pechanga Band of Luiseño Indians
  • Agua Caliente Band of Cahuilla Indians
  • Cachil Dehe Band of Wintun Indians
  • Lytton Band of Pomo Indians
  • Paskenta Band of Nomlaki Indians
  • Viejas Band of Kumeyaay Indians
  • Yocha Dehe Wintun Nation

Upshot

This scenario requires an incredibly open mind, but it’s the only one that would help solve the current stalemate preventing an online poker bill from passing. Plus, it answers the question of with whom Pechanga and its allies will partner.

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Steve Ruddock
- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.