California Coalitions Continue To Tussle With Bad Actor Issue
Online Poker Report

Hardline Tribes May Be Willing to Bend On Online Poker In California

Sacramento

Ed. note – This article has been updated with a comment from San Manuel.

Online poker legislation could go to a floor vote in the California Assembly next week with at least a few members of a hardline American Indian coalition endorsing an amended version of Assemblyman Adam Gray’s Internet Poker Consumer Protection Act that offers a new position on the so-called “bad actor” issue, sources said Thursday.

No consensus on if there’s consensus

Some tribal leaders, lawyers and lobbyists deny members of a coalition of seven politically powerful tribes led by the Pechanga Band of Luiseño Indians and Agua Caliente Band of Cahuilla Indians are willing to endorse Gray’s AB 2863.

But other sources said Gray and Agua Caliente Chairman Jeff Grubbe have apparently convinced some coalition members to at least consider an amended version of AB 2863 that will likely block industry participation by international online giant Amaya / PokerStars.

Pechanga, Agua Caliente and the Barona Band of Mission Indians have agreed in principle to support Gray’s bill, sources said, but are awaiting draft amendments dealing with the license eligibility of poker websites accused of taking US wagers in apparent violation of federal law.

One of those companies is Amaya / PokerStars, a business partner with two California tribes and three Los Angeles-area card rooms.

Behind the “bad actor” issue

Gray’s bill currently requires companies suspected of violating the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 to wait five years before applying for a license.

The companies could avoid the waiting period by paying $20 million.

A proposed amendment by the Agua/Pechanga coalition would require licensees accused of violating UIGEA to wait at least 10 years before applying for a license. The firms would also have to pay a $60 million fee.

Amaya/PokerStars is opposed to both drafts, claiming they violate commerce provisions of the US Constitution.

The issue is considered to be the last major stumbling block on the path to regulated online poker in California.

The proposed compromise remains a mystery

A modified version of the “bad actor” clause in Gray’s legislation apparently meets the two positions halfway.

“All I can tell you is that it’s different,” said a source requesting anonymity.

Gray’s staff and Pechanga officials declined comment. Grubbe did not return telephone calls.

How the bill might move forward

One of Amaya/PokerStars two tribal partners – the San Manuel Band of Serrano Mission Indians – is reportedly on board with the proposed amendments to AB 2863, sources said.

A spokesperson for San Manuel disputed that characterization. “San Manuel has not made any agreement on any rumored amendments and your reliable source is very unreliable. San Manuel does not support any amendments to the bill that was passed by the Assembly Appropriations Committee,” the spokesperson said in response to a request for comment.

It’s not clear if a split in the coalition’s previous opposition to Gray’s legislation would get online poker through the California Legislature this session. The tax measure would require approval by 2/3rds of the members, or 54 assembly members.

A version of AB 2863 would need to get through both the Assembly and Senate before the legislature adjourns on or about Aug. 31.

“The clock is working against everybody,” said Steve Stallings, chairman of the California Nations Indian Gaming Association and councilman for the Rincon Band of Luiseño Indians.

“You’ve got to get the bill out of the Assembly and then give the Senate at least two weeks to consider it.

“Without something done early next week on this bill, we’re toast,” Stallings says.

First, the Assembly

Trent Hager, a chief of staff for Gray, told the Los Angeles Times the internet poker bill will be brought to Assembly floor Monday along with a measure to legalize daily fantasy sports.

“We will continue to work to move both consumer protection pieces forward,” he told the Times.

Sources said an online poker bill might not get to the Assembly floor until later in the week.

Then, the Senate

Online poker legislation also faces potential opposition from Senate Pro Tem Kevin de León, who told the Times he is “not in a rush” to approve online poker and fantasy sports sites.

As it stands, Gray’s bill is supported by a large coalition of tribes, card rooms, the racing industry and organized labor.

Formidable opposition has been waged largely by the Pechanga/Agua coalition, which has been characterized as “obstructionists” by those pressing for online poker legislation.

But consensus is a precursor

Sources said the coalition remains united, despite reports some tribes are willing to make concessions on the “bad actor” issue. Two coalition members – the Viejas Band of Kumeyaay Indians and Yocha Dehe Band of Wintun Nation – are reported steadfast in their opposition.

Lobbyist David Quintana, who represents Viejas, disputes reports some coalition tribes have an agreement to support Gray’s bill.

“There’s no agreement in principle,” Quintana said Wednesday. “I know a tribe in our coalition – I’m not going to say who – met with Gray [Tuesday] and they had a discussion. Discussions don’t mean s— in this business. We’ve got to see [bill] language.”

“I’ve heard there were some discussions but I don’t have any particulars to share with you at this point,” Stallings said.

Grubbe, who in 2012 succeeded the late Richard Milanovich as chairman of his tribe, is highly regarded by tribal leaders.

The chairman reportedly told others he is troubled by the characterization of coalition tribes as “obstructionists.”

“It would be great to have Chairman Grubbe use his leadership position to try and resolve this,” Stallings said. “Someone of his stature would be a big influence on a lot of people, a lot of tribes and the legislature.”

Image credit: trekandshoot / Shutterstock.com

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Dave Palermo
- Dave Palermo is an award-winning metropolitan newspaper reporter. He has written about American Indian governments for more than 20 years, working as an advocate for several tribes and tribal associations. He also has co-authored books on gambling and gambling law.