California’s tribal gaming operators have united behind a draft bill which could eventually legalize online poker in California, thus opening up what promises to be the biggest market in the United States, and possibly one of the biggest in the world. In a letter to the sponsors of the current draft bill, Senator Lou Correa (D-Santa Ana) and Assemblyman Reginald Jones-Sawyer (D-Los Angeles), a coalition of Native American tribes announced that they had come to terms and would be lending their support.
“We are honored to inform you and your colleagues that for the first time in five years, the undersigned tribal governments are united in support of the attached unified language that would authorize intrastate Internet poker in the State of California,” begins the letter. “As you know, this journey has been long and difficult, but the challenges posed by the Internet demand that we harness rather than cede the technology of the future for California and for our tribal communities.”
The unification of the tribes is a significant step on the road towards regulation; however, of the signatories representing 13 tribal operators in the letter, there was one notable absence. The Morongo Band of Mission Indians has failed to endorse the bill, due to its recent agreement with PokerStars.
The agreement, between the aforementioned, as well as the Commerce Club, the Hawaiian Gardens Casino and the Bicycle Casino, would theoretically allow PokerStars to provide its new partners with online poker software and infrastructure should regulation come into force, thus offering the world’s biggest online poker room a backdoor into a regulated Californian market.
The schism between the Morongo Band and the rest of the tribes relates to the strongly worded “bad actor” clause in the current draft bill, which would effectively shut PokerStars out of California post-regulation. “Bad actors” refers to any foreign operator that continued to accept bets from US players after the Unlawful Internet Gambling Enforcement Act of 2006 prohibited them from doing so, a list that includes PokerStars. The bill states that the bad actor clause is “non-severable”, which means that the bill cannot be passed in its current form without the clause.
Strong Language Alienates PokerStars
Crucially for PokerStars’ allies in California, the bill prohibits any operator from associating with “any brand or business name, including any derivative brand name with the same or similar wording, or any trade or service mark, software, technology, operational system, customer information, or other data acquired, derived, or developed directly or indirectly from any operation that has accepted a wager or engaged in a financial transaction related to such wager from any person in the United States on any form of Internet gaming after December 31, 2006.”
Morongo Chairman Robert Martin recently said that his tribe would fight any bill with such a clause.
“Efforts by a select few interests to rewrite longstanding and effective policy in order to gain a competitive market advantage or to lock out specific companies is not in the best interests of consumers or the state and will be vigorously opposed by our coalition, online poker players and many others,” he said.
Meanwhile, it’s clear the rest of the tribal gaming industry, fearful that it would be impossible to compete in a regulated market that included PokerStars, are attracted by the hard-hitting language of the bill and are consolidated in their efforts to keep the online poker giant out of the state.
While California, then, took further step towards regulation this week, the rift between the Morongo tribe – allied with the Commerce, the Bike and the Hawaiian Gardens – and the rest of the tribal gaming industry, has intensified and threatens to derail the whole process.