California Online Poker: Is It Closer Now Than It Was A Year Ago?

April 7, 2015
California Online Poker: Is It Closer Now Than It Was A Year Ago?

Unless a bill is passed, the legislative progress is often hard to measure.

Bills can seem to have all the momentum in the world and die at the last minute for any number of reasons. And while one would think it’s simply a matter of picking up where you left off the following year, this is hardly ever the case.

Bills that are not passed by the end of the legislative session are scrapped and must start from scratch (including being introduced all over again) whenever a new legislative session begins.

The problem is, the people involved can often change – or change their minds – based on the current political climate.

Take California for instance.

The ground shifting below

In 2014, there were 13 tribes firmly opposed to PokerStars. In 2015 there are perhaps six to eight, with one of the original 13 now partnered with PokerStars.

And let’s not forget PokerStars was a privately owned company at the start of 2014, but was bought by a publicly owned company, Amaya Gaming, in June of 2014, completely upending the bad actor debate.

In 2014 State Senator Lou Correa was one of the people who introduced an online poker bill. But Correa is no longer in the California Senate after reaching his term limits.

Correa’s seat was won by Assemblyman Isadore Hall III, who as the Assembly Governmental Committee chair oversaw the Assembly hearing on online poker last year. Now Hall’s chairmanship has gone to Adam Gray, while Hall was picked to chair the Senate Governmental Organization Committee.

Confused yet?

Because of the constantly changing climate, the best way to measure progress is to compare where we were in previous years at this time, and where we are now.

So here is a look at where California online poker legislation stood at this time last year and where it stands today.

California online poker legislation efforts in 2014

Last year, California’s online poker hopes took a major hit when embattled Senator Roderick Wright was convicted on eight counts of fraud in January.

Wright had been leading the charge toward the legalization of online poker in the Golden State, and his absence created a major void as he was not only online poker’s greatest champion in the California legislature, he was also the Chairman of the Governmental Oversight Committee which is where all online poker bills are likely to begin.

We learned who would take the baton from Wright at the end of February when Assemblyman Reggie Jones-Sawyer, and State Senator Lou Correa introduced online poker bills just before the legislative deadline. Correa had also introduced a bill late in the 2013 session (when the allegations against Wright first came to light) and as far back as SB 40 in 2010.

By March of 2014, the entire online poker debate in California got flipped on its head when the Morongo Tribe and several California card rooms were rumored to be partnering with PokerStars – a rumor later confirmed during an online poker hearing in April.

This caused a huge rift, and cemented what have come to be known as the Pechanga and the Morongo coalitions, with racetracks on the outside looking in.

Here are the details of the hearing that took place on April 23, 2014.

At the same time a storm cloud was also appearing on the horizon as U.S. Senator Lindsey Graham (R-SC) and Representative Jason Chaffetz (R-UT) were introducing the Restoration of America’s Wire Act (RAWA) in Congress.

California online poker legislation efforts in 2015

On the bright side, 2015’s legislative efforts have been less hurried.

Assemblyman Mike Gatto (a new player when it comes to this issue) introduced an online poker bill (AB 9) in December of 2014, ahead of the new legislative session. Gatto’s bill favored the Pechanga coalition, and closely resembled previous efforts by restricting racetracks and containing strict bad actor clauses.

In January, Assemblyman Reggie Jones-Sawyer introduced an online poker bill (AB 167) that not only favored the Morongo/PokerStars coalition, but was also inclusive to racetracks.

As if two starkly different bills weren’t enough, newly appointed GO Committee chairs Isadore Hall III and Adam Gray announced they would be introducing companion “compromise” bills, which were ended up being framework bills with no specifics.

So here we are in 2015, with four bills to choose from (two of which are expected to be identical); RAWA reintroduced by Jason Chaffetz in Congress and still hanging over everything at the state level; and perhaps as many as five competing factions in California gaming.

Upshot #1

Everything about California online poker in 2014 seemed rushed. For starters, you had the Roderick Wright scandal coming to a close, and bills being introduced just before the legislative deadline by legislators who were not accustomed to leading on this issue.

Conversely, 2015 has been more methodical.

Bills have been introduced early (and often), and two of those bills were introduced by the all-important GO Committee chairs. Because of this, it’s almost a certainty at least one online poker hearing will be held this year, and likely more.

The question now is: Will any of the state’s gaming interests blink and make the necessary concessions to get a bill passed?

Where the principals stood in 2014

At the start of 2014 the key issues revolved around licensing fees and who (in the California gaming sector) would be allowed to apply for licenses.

However, as partnerships began to materialize, and with the dissolution of COPA (California Online Poker Association) in 2012. the state’s gaming interests evolved into three main camps:

  1. Pechanga and a coalition of 13 other tribes
  2. Morongo, Bicycle Casino, Commerce Casino, Hawaiian Gardens Casino, and PokerStars
  3. Racing

Also a factor, but pushed to the backburner, were the smaller card rooms in the state.

Where the principals stand in 2015

Presently, the key players in the three main groups referenced above have remained relatively the same.

That being said, there has been a lot of movement in terms of both policy and affiliation within these coalitions, and there could now be as many as five individual online poker factions in California.

The most notable change was the splintering of the Pechanga coalition.

In December, San Manuel dropped out and joined the PokerStars/Morongo coalition, and earlier this year the Pala, Rincon, and United Auburn tribes also effectively absolved their association with the Pechanga coalition and adopted their own stance – a stance very close, but not identical to the Morongo point of view.

Caesars Entertainment, partnered with Rincon, also adopted this pro-PokerStars/Racetracks position.

Two other tribes that were on board with Pechanga in 2014 (Paskenta and Sycuan) have not made their intentions clear this year, as the letter opposing AB 167 contains only six tribal signatures.

Therefore, the original 13 tribes in the Pechanga coalition in 2014 may now be down to eight or even six member tribes.

Furthermore, the RAP (Rincon, Auburn, Pala) coalition, Morongo, and the a group of 25 card rooms are all on the same page and feel racetracks should be allowed to apply for online poker licenses.

Upshot #2

For the most part, the gaming interests in California have coalesced around the idea of allowing both PokerStars and racetracks to apply for a license (which doesn’t necessarily mean they will receive one).

While this may seem like progress, it’s more akin to being down 25 points in the final two minutes of a basketball game and going on a 10-0 run to cut the deficit to 15 with 50 seconds left.

Because it would affect tax policy, online poker bills in California require a 2/3 majority to pass, so California more or less needs a consensus to pass an online poker bill.

And even though the momentum is shifting towards a more inclusive bill, not everyone is on board with this idea. Despite the splintering of  Pechanga’s coalition, as long as Pechanga is against a bill it’s unlikely to pass.

Conversely, as long as the Morongo tribe is against a bill it would also likely fail.

And, as long as racing is against a bill it’s also likely to fail.

So 2015 is much the same as 2014 on this front. No consensus = no bill.

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