California's Internet gambling bills generate conversation, cash
By Laurel Rosenhall
The Sacramento Bee
Published: Sunday, Aug. 7, 2011 - 12:00 am | Page 1A
© Copyright The Sacramento Bee. All rights reserved.
Bills to legalize online gambling hit the state Capitol more than two years ago – and are likely headed for another year of debate.
Lobbyists and political campaigns are benefiting from the protracted discussion, collecting millions of dollars from the card rooms, racetracks and Indian tribes seeking to shape the future of Internet wagering.
The conversation centers on how it should be implemented and which of the competing interests will reap the benefits. That creates even more business for Capitol advocates, as they sort out differences among their clients.
"Any time there's a major new legislative initiative that is contentious, the details of which have to be worked out, it's good for the business of lobbyists, political consultants and lawyers," said Howard Dickstein, a lawyer who represents several Indian tribes, including the one that owns Thunder Valley casino near Lincoln.
"Any issue where there is this much money involved is going to attract advocacy on all sides," Dickstein said.
Gambling interests have long been big political spenders in California – even more so with the advent of Indian casinos in the 1990s. Moving the business online will require another political push.
It's impossible to say exactly how much is being spent by interest groups advocating Internet gambling. The secretary of state's office does not organize lobbying data by bill number, and some people working on the issue are lawyers or consultants who are not required to disclose financial information because they are not registered lobbyists.
But disclosure forms filed by some of the interested parties provide a glimpse of the business being generated by this debate:
• The Morongo and San Manuel bands of Indians, sponsors of one of the Internet gambling bills, together spent more than $337,000 on lobbying last year. They have spent nearly that much more – $304,000 – on lobbying just in the first half of this year.
• Some tribes, which oppose the Morongo and San Manuel bill because they say it doesn't give them enough opportunity to make money on Internet gambling, spent about $1.2 million on lobbying in 2010. They are on track to spend at least that much again this year.
• Major card rooms and racetracks that want to operate Internet gambling spent another half-million dollars on lobbying last year, and this year are spending at a similar pace.
Those figures don't count how much gambling interests are spending on consultants who are not registered lobbyists.
Former lawmakers Willie Brown and Lloyd Levine are both consultants on the issue. Brown works for the Morongo tribe, while Levine is advising technology companies that operate Internet gambling sites overseas.
Levine said he was the first state legislator in the nation to introduce a bill on Internet gambling when he was an assemblyman in 2008. Now, about a dozen states are discussing the idea.
In California, supporters say legalizing Internet gambling will bring hundreds of millions in new taxes to state coffers.
The two current bills propose different visions for how the state should engage. Both limit the network to players inside state lines. But SB 40 by Sen. Lou Correa, D-Santa Ana, would legalize only Internet poker, while SB 45 by Sen. Rod Wright, D-Inglewood, would create a system for users to gamble online on all kinds of games.
Correa's bill is sponsored by a group that includes the Morongo and San Manuel tribes and a host of card rooms – all of which stand to make money through legal Internet poker. At a hearing last month, Correa said his bill should be approved before the federal government takes any action on legalizing Internet gambling.
"If we don't move today, this year, California is likely to be completely cut off from this business," he said. "It's time to act."
At the same hearing, Wright emphasized that his bill is not sponsored by an outside group.
"This is my work product," Wright said. "It reflects what I believe to be in the best interests of the people of California."
Both Wright and Correa have financial ties to gambling interests. Tribes, card rooms and racetracks have contributed to political campaigns, legal defense funds and charitable causes associated with lawmakers.
The San Manuel tribe spent close to $43,000 on an independent expenditure committee to support Correa's 2010 run for state Senate. The California Tribal Business Alliance, which opposes Correa's bill, spent $15,000 to support him in that race.
Correa is now raising money for a 2018 run for attorney general. In June, four card rooms sponsoring his Internet gambling bill gave a combined $18,200 to support Correa for that post.
The attorney general's office regulates brick and mortar casinos, though it's not yet clear which agency would regulate Internet gambling if it were to become legal.
Correa did not return calls seeking comment.
Foes struggle to be heard
Wright's 2008 run for state Senate received $30,000 in support from the Morongo tribe through an independent expenditure committee. His 2012 campaign coffer includes $53,800 from tribes, card rooms and racetracks.
Lobbyists and political campaigns are benefiting from the protracted discussion, collecting millions of dollars from the card rooms, racetracks and Indian tribes seeking to shape the future of Internet wagering.
The conversation centers on how it should be implemented and which of the competing interests will reap the benefits. That creates even more business for Capitol advocates, as they sort out differences among their clients.
"Any time there's a major new legislative initiative that is contentious, the details of which have to be worked out, it's good for the business of lobbyists, political consultants and lawyers," said Howard Dickstein, a lawyer who represents several Indian tribes, including the one that owns Thunder Valley casino near Lincoln.
"Any issue where there is this much money involved is going to attract advocacy on all sides," Dickstein said.
Gambling interests have long been big political spenders in California – even more so with the advent of Indian casinos in the 1990s. Moving the business online will require another political push.
It's impossible to say exactly how much is being spent by interest groups advocating Internet gambling. The secretary of state's office does not organize lobbying data by bill number, and some people working on the issue are lawyers or consultants who are not required to disclose financial information because they are not registered lobbyists.
But disclosure forms filed by some of the interested parties provide a glimpse of the business being generated by this debate:
• The Morongo and San Manuel bands of Indians, sponsors of one of the Internet gambling bills, together spent more than $337,000 on lobbying last year. They have spent nearly that much more – $304,000 – on lobbying just in the first half of this year.
• Some tribes, which oppose the Morongo and San Manuel bill because they say it doesn't give them enough opportunity to make money on Internet gambling, spent about $1.2 million on lobbying in 2010. They are on track to spend at least that much again this year.
• Major card rooms and racetracks that want to operate Internet gambling spent another half-million dollars on lobbying last year, and this year are spending at a similar pace.
Those figures don't count how much gambling interests are spending on consultants who are not registered lobbyists.
Former lawmakers Willie Brown and Lloyd Levine are both consultants on the issue. Brown works for the Morongo tribe, while Levine is advising technology companies that operate Internet gambling sites overseas.
Levine said he was the first state legislator in the nation to introduce a bill on Internet gambling when he was an assemblyman in 2008. Now, about a dozen states are discussing the idea.
Two bills, different visions
In California, supporters say legalizing Internet gambling will bring hundreds of millions in new taxes to state coffers.
The two current bills propose different visions for how the state should engage. Both limit the network to players inside state lines. But SB 40 by Sen. Lou Correa, D-Santa Ana, would legalize only Internet poker, while SB 45 by Sen. Rod Wright, D-Inglewood, would create a system for users to gamble online on all kinds of games.
Correa's bill is sponsored by a group that includes the Morongo and San Manuel tribes and a host of card rooms – all of which stand to make money through legal Internet poker. At a hearing last month, Correa said his bill should be approved before the federal government takes any action on legalizing Internet gambling.
"If we don't move today, this year, California is likely to be completely cut off from this business," he said. "It's time to act."
At the same hearing, Wright emphasized that his bill is not sponsored by an outside group.
"This is my work product," Wright said. "It reflects what I believe to be in the best interests of the people of California."
Both Wright and Correa have financial ties to gambling interests. Tribes, card rooms and racetracks have contributed to political campaigns, legal defense funds and charitable causes associated with lawmakers.
The San Manuel tribe spent close to $43,000 on an independent expenditure committee to support Correa's 2010 run for state Senate. The California Tribal Business Alliance, which opposes Correa's bill, spent $15,000 to support him in that race.
Correa is now raising money for a 2018 run for attorney general. In June, four card rooms sponsoring his Internet gambling bill gave a combined $18,200 to support Correa for that post.
The attorney general's office regulates brick and mortar casinos, though it's not yet clear which agency would regulate Internet gambling if it were to become legal.
Correa did not return calls seeking comment.
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