Assemblyman Reggie Jones-Sawyer says online poker debate needs cooling-off period
Online Poker Report

California Lawmaker On Online Poker: ‘We’ve Got To Start From Ground Zero’

California online poker 2017
California Assemblyman Reggie Jones-Sawyer told Online Poker Report that his bill to legalize and regulate online poker will not be moving this year.

However, he will continue to work on the issue in an effort to repair the trust between gambling interests and legislators that disintegrated at the end of last session.

California online poker, on ice for now

In an interview at his district office in Los Angeles, Jones-Sawyer described 2016 as a year to heal, take a step back and regroup without the possibility of a bill going forward raising tensions.

“Obviously, we’re not going to put anything across the desk now,” Jones-Sawyer said. “If you look at the Assembly, we have other big things such as the transportation bill to focus on. This would not be a good year to put something controversial in. I think the ability to work out something next year has a bigger chance if we do some of the come-together healing things right now.”

Like Icarus who flew too close to the sun, Assemblyman Adam Gray, chairman of the Governmental Organization Committee that handles gambling issues, did not heed warnings last year in trying to take the bill he co-introduced with Jones-Sawyer higher than it was constructed to handle.

“I don’t want to sound like a minister or psychologist, but we’ve got to start from ground zero where we’ve got to at least get people to want to try to get it done again,” Jones-Sawyer said. “When I first started on this in earnest, we were going slow and methodical, and we had some successes. We weren’t trying to rush anyone and we weren’t pitting one side against the other, as best we could.”

The backstory of iPoker in California

Gray’s impatience is understandable to people in California who have been waiting for a safe and regulated environment in which to play online poker.

This year marked a full decade since legislation to authorize online poker was first considered. Yet, since the Indian gaming tribes can’t agree on the parameters of a bill, Pennsylvania is expected to soon become the fourth state to pass online gambling legislation before California.

His hubris also was justifiable. Early in the year, he had reached at least a tenuous accord between the horse-racing industry and tribes for racing to give up its right to be an operator in exchange for a $60 million annual stipend. Horse racing representatives had previously said they would never accept being excluded. There had been 15 years of hostility between tribes and tracks.

After overcoming one seemingly insurmountable obstacle, Gray tried to solve the divide on suitability language targeting PokerStars between the two major coalitions, the one partnered with the worldwide industry giant and the one not.

PokerStars’ suitability is the major sticking point

The coalitions weren’t close to coming to an agreement, and the harder Gray pushed for a compromise on suitability the more they resisted. Both times he tried to advance the bill without a consensus on suitability, stakeholders responded with hostility.

The first instance was in June, when Gray worked with the Assembly Appropriations Committee on amending the bill to include what was essentially a $20 million fine for operating previously in California. PokerStars could have paid that to get in good standing.

The bill moved through the committee despite objections from the Pechanga coalition, and Gray felt it necessary to bring a sergeant of arms and recite criminal codes dealing with threatening a legislator at a meeting with coalition representatives.

As the session neared a close, Gray changed course and introduced amendments that would institute a five-year ban for companies that took wagers in the U.S. after Dec. 31, 2006. Over the next week, he and his chief of staff faced public allegations in the media.

“Now we have to go back to the same methodical strategy as before, but we may have to go even slower because you don’t want to have people pushed up against the wall,” Jones-Sawyer said. “That’s when people start to get a little nervous and strained.”

What happened to 2016’s online poker efforts

Gray hasn’t publicly discussed his decision to add the hard five-year penalty, which went contrary to his pronouncements over the previous two years that the period before ‘Black Friday’ was a gray area in terms of offering online poker in the state and that suitability should be left to the regulators as much as possible.

“He may have thought there was a way to make the deal, to finally get this done,” Jones-Sawyer said. “I don’t know what happened after that to unravel something for which I thought we were very close.”

That seems to be the case, as Gray’s former chief of staff told the Los Angeles Times that they expected the amended bill to pass the Assembly the following week. But it was never called for a vote. A legislative source told me earlier this year that the bill in its final form only had between 22 and 25 of the needed 54 votes.

“I think toward the end of the last session we were so unbelievably close,” Jones-Sawyer said. “I watched and I listened; I tried to help, but the way we normally work with one another I think ultimately led it to its doom. So I want to make sure that the lobbyists are involved, that we’re all rowing in the same boat.”

Last year’s issue scuttled 2017 online poker legislation

It’s disheartening for a bill that has been under consideration for a decade to have zero momentum. But getting too close too fast last session left the bill with no wings remaining to take flight this year. The stalemate on suitability still remains.

Both coalitions have reasons to feel betrayed by Gray. And Gray has reason to be upset with the attacks made against him by each side when things weren’t going their way. Gray refused to introduce a bill this year, so Jones-Sawyer decided to do it on his own so that the issue was not forgotten.

But Jones-Sawyer indicated that rather than getting hearings and serious discussions, the issue is back to the early stages of tentatively feeling out the stakeholders.

He said he has had meetings with tribal representatives this year and will continue to meet with all stakeholders who approach him. But these meetings have been simplistic in nature, some as short as 15 minutes.

“The meetings have been more about me, as the author, saying, ‘Do you trust me to do the right thing?’” Jones-Sawyer said. “They’re to clear the air so we can set up a mechanism where we all can work together to get to the ultimate goal.”

What needs to happen moving forward on CA iGaming

Eventually, Gray will need to be involved in the healing process from the perspective of his relationship with the tribes and their relationship with him. However, it’s going to take time for the bad feelings from the end of last session to dissipate.

“I’m talking about starting all over and having a brand new conversation,” Jones-Sawyer said. “If you stay mired in bad policies or bad behavior, there’s going to be no progress.

“We have to start from scratch and make sure every pillar we have is solid so if there’s any glitch it doesn’t unravel the whole thing. Part of this is trust, bonding and getting everyone in a feel-good position, so as we’re getting to a solution it’s not so paper thin that it falls apart.”

If trust can be rebuilt, much of the progress from previous legislation could be re-established for the bill to move next year.

There’s no guarantee that the resolutions for horse racing participation and tax rate will carry over to the next time the discussion gets serious. But there are parameters in place that have worked in the past. With a breakthrough on suitability language, there’s no reason to think the rest couldn’t quickly fall into place.

Jones-Sawyer thinks that in five years no one will remember how long it took marijuana to be legalized in California, and that eventually that will be the case with online poker.

“I’m really excited about the future of online gaming and gambling in general,” Jones-Sawyer said. “Just like adult-use marijuana is going to open a huge industry, online poker is the tip of the iceberg. I’d rather go slow to get it right because, once it expands to other types of games, if we don’t have it right it will be even worse.”

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Matthew Kredell
- Matthew began writing about legislative efforts to regulate online poker in 2007 after UIGEA interfered with his hobby of playing small-stakes online poker while working as a sportswriter at the Los Angeles Daily News. Covering the topic for Bluff Magazine, PokerNews and now Online Poker Report, he has interviewed four U.S. Congressmen and 20+ state legislators. His poker writing has been cited by The Atlantic, Politico.com and CNN.com. A freelance writer based in Los Angeles, Matt has written on a variety of topics for Playboy Magazine, Men's Journal, Los Angeles magazine, LA Weekly and ESPN.com.