Lawmakers bet that California's ready for state-sanctioned online poker
Published: Sunday, Mar. 13, 2011 - 2:00 am | Page 3A
Every smart phone, laptop and personal computer in California would become a state-sanctioned online poker parlor under fiercely contested legislation to expand permissible gambling.
Lawmakers are eyeing potential revenue from two Senate bills that would make California the first state to bless and tax around-the-clock Internet poker.
States are not necessarily banned by federal law from approving online poker websites within their boundaries – and players routinely wager on flushes, straights and full houses at Internet sites of foreign or offshore firms.
California's bills hope to tap into the existing lucrative market by courting players who reside in the state, licensing operators, regulating and taxing the poker games, and making it a crime for Californians to use an unauthorized site.
The high-stakes issue has attracted an army of lobbyists, with fighting spilling over into whether Nevada and foreign firms should be allowed to compete with California tribes, card clubs and horse tracks for a state license.
At its core, the battle pits groups seeking to gain financially against others protecting their turf – turning some tribes against others, and Indian casinos willing to team with card clubs against those that are not.
One of the bills, Senate Bill 40, is sponsored by the California Online Poker Association, or COPA, a coalition of the Morongo Band of Mission Indians, the Commerce Casino, 28 other Indian tribes, and 13 other card clubs that are pushing to jointly offer Internet poker games.
"I think if we blink at this moment, we'll lose a golden opportunity," said state Sen. Lou Correa, D-Santa Ana, the author of SB 40. "Internet poker is an area that's growing, and for us to ignore it, to say we're not going to address or regulate it, that's really ignoring the facts."
Gambling opponents counter that pushing online poker into the mainstream poses huge risks for impulsive or problem bettors, who could lose large sums in fast-paced games while sitting alone, without anyone urging them to slow down or stop.
The Rev. James Butler, a United Methodist minister and executive director of the California Coalition Against Gambling Expansion, contends that expanding Internet poker would increase bankruptcies, divorces and unemployment.
"This will enable people to lose their homes without ever leaving the house," he said.
Sen. Rod Wright, D-Inglewood, said that it's obvious many Californians want to play online poker. Some already do, he said, adding that government has a lousy track record in stopping activities – from prostitution to drug sales – that are frowned-upon but in demand.
"Every experience that this country has had, when we've tried to prohibit things that people wanted to do, we've come up short," he said.
Wright is pushing a broader Internet poker bill, Senate Bill 45, which would allow Nevada, offshore or foreign firms to compete for a California license and could open the door to betting on other games, too.
A minefield of issues surrounds the online poker fight – including how high to tax such games, how many licenses to issue, what restrictions to impose, and how to ensure that games are run fairly and exclude minors and out-of-state residents.
Gov. Jerry Brown has taken no position on the bills.
Nobody knows for sure how many Californians would use a state-sanctioned site. Findings in SB 40 and SB 45 estimate that more than a million Californians currently are Internet gamblers.
A consulting group led by former state finance director Tim Gage concluded in a study funded by COPA that online poker in California would attract about 2.3 million players, create about 1,100 jobs and generate about $81 million per year for the state.
Opponents counter that potential negative fiscal effects have been given short shrift. Besides exacerbating social ills, Internet poker potentially could reduce patronage at tribal casinos and cut into discretionary spending that otherwise might be spent at restaurants, stores or entertainment venues.
David Quintana, political director of the California Tribal Business Alliance, said its three tribes with casinos cannot support SB 40's push to pair tribes with card clubs that have bitterly opposed Indian casinos in years past.
Quintana said the tribal alliance is wary that the second Internet poker bill, SB 45, could open the door to Internet games that violate tribes' exclusive right to operate casino gambling in California.
"They're trying to jam something through," Quintana said of the two Senate bills. "Our guys believe, 'Hey, hold on for a second, this could be a much better thought-out plan.' "
Parke Terry, lobbyist for Poker Players Alliance, a nonprofit group whose contributors include two major offshore Internet poker firms, said the two Senate bills would restrict competition by barring poker players from using foreign websites.
"We don't want to see the play of online poker criminalized," Terry said.
The 28-tribe California Nations Indian Gaming Association is split on legalizing Internet poker but voted recently to support SB 40.
Jerome Encinas, CNIGA spokesman, said passage of Correa's bill could position Indian gambling for a future in which growing numbers of people use the Internet.
"If we sit on our hands, we're not going to be a part of that evolving state," Encinas said.
All Californians could benefit from money generated by online poker, said Patrick Dorinson, representing two advocacy groups backed by European gambling firms that hope to help run a state-sanctioned poker website by contracting with a licensee.
"When you're looking under the seat covers for money, you should take it where you can," Dorinson said of California's economic struggles.
Wright's Internet poker bill got sidetracked last year.
"I'm optimistic, but it's a tough go," Wright said of this year's SB 45.
"I took it up knowing that I was probably getting in the middle of an ugly fight," Correa said of his competing bill, SB 40.
Lawmakers are eyeing potential revenue from two Senate bills that would make California the first state to bless and tax around-the-clock Internet poker.
States are not necessarily banned by federal law from approving online poker websites within their boundaries – and players routinely wager on flushes, straights and full houses at Internet sites of foreign or offshore firms.
California's bills hope to tap into the existing lucrative market by courting players who reside in the state, licensing operators, regulating and taxing the poker games, and making it a crime for Californians to use an unauthorized site.
The high-stakes issue has attracted an army of lobbyists, with fighting spilling over into whether Nevada and foreign firms should be allowed to compete with California tribes, card clubs and horse tracks for a state license.
At its core, the battle pits groups seeking to gain financially against others protecting their turf – turning some tribes against others, and Indian casinos willing to team with card clubs against those that are not.
One of the bills, Senate Bill 40, is sponsored by the California Online Poker Association, or COPA, a coalition of the Morongo Band of Mission Indians, the Commerce Casino, 28 other Indian tribes, and 13 other card clubs that are pushing to jointly offer Internet poker games.
"I think if we blink at this moment, we'll lose a golden opportunity," said state Sen. Lou Correa, D-Santa Ana, the author of SB 40. "Internet poker is an area that's growing, and for us to ignore it, to say we're not going to address or regulate it, that's really ignoring the facts."
Gambling opponents counter that pushing online poker into the mainstream poses huge risks for impulsive or problem bettors, who could lose large sums in fast-paced games while sitting alone, without anyone urging them to slow down or stop.
The Rev. James Butler, a United Methodist minister and executive director of the California Coalition Against Gambling Expansion, contends that expanding Internet poker would increase bankruptcies, divorces and unemployment.
"This will enable people to lose their homes without ever leaving the house," he said.
Sen. Rod Wright, D-Inglewood, said that it's obvious many Californians want to play online poker. Some already do, he said, adding that government has a lousy track record in stopping activities – from prostitution to drug sales – that are frowned-upon but in demand.
"Every experience that this country has had, when we've tried to prohibit things that people wanted to do, we've come up short," he said.
Wright is pushing a broader Internet poker bill, Senate Bill 45, which would allow Nevada, offshore or foreign firms to compete for a California license and could open the door to betting on other games, too.
A minefield of issues surrounds the online poker fight – including how high to tax such games, how many licenses to issue, what restrictions to impose, and how to ensure that games are run fairly and exclude minors and out-of-state residents.
Gov. Jerry Brown has taken no position on the bills.
Nobody knows for sure how many Californians would use a state-sanctioned site. Findings in SB 40 and SB 45 estimate that more than a million Californians currently are Internet gamblers.
A consulting group led by former state finance director Tim Gage concluded in a study funded by COPA that online poker in California would attract about 2.3 million players, create about 1,100 jobs and generate about $81 million per year for the state.
Opponents counter that potential negative fiscal effects have been given short shrift. Besides exacerbating social ills, Internet poker potentially could reduce patronage at tribal casinos and cut into discretionary spending that otherwise might be spent at restaurants, stores or entertainment venues.
David Quintana, political director of the California Tribal Business Alliance, said its three tribes with casinos cannot support SB 40's push to pair tribes with card clubs that have bitterly opposed Indian casinos in years past.
Quintana said the tribal alliance is wary that the second Internet poker bill, SB 45, could open the door to Internet games that violate tribes' exclusive right to operate casino gambling in California.
"They're trying to jam something through," Quintana said of the two Senate bills. "Our guys believe, 'Hey, hold on for a second, this could be a much better thought-out plan.' "
Parke Terry, lobbyist for Poker Players Alliance, a nonprofit group whose contributors include two major offshore Internet poker firms, said the two Senate bills would restrict competition by barring poker players from using foreign websites.
"We don't want to see the play of online poker criminalized," Terry said.
The 28-tribe California Nations Indian Gaming Association is split on legalizing Internet poker but voted recently to support SB 40.
Jerome Encinas, CNIGA spokesman, said passage of Correa's bill could position Indian gambling for a future in which growing numbers of people use the Internet.
"If we sit on our hands, we're not going to be a part of that evolving state," Encinas said.
All Californians could benefit from money generated by online poker, said Patrick Dorinson, representing two advocacy groups backed by European gambling firms that hope to help run a state-sanctioned poker website by contracting with a licensee.
"When you're looking under the seat covers for money, you should take it where you can," Dorinson said of California's economic struggles.
Wright's Internet poker bill got sidetracked last year.
"I'm optimistic, but it's a tough go," Wright said of this year's SB 45.
"I took it up knowing that I was probably getting in the middle of an ugly fight," Correa said of his competing bill, SB 40.
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