As legal online gaming – whether with a full range of casino games, or poker only – slowly starts to emerge in America, state by state, an interesting conundrum awaits. With regulatory systems set up in Nevada, Delaware and New Jersey to allow only existing land casinos to be licensed online, the issue of whether Internet play will help or hurt brick-and-mortar play remains up in the air; there’s simply not enough data yet, one way or the other, to determine how that is likely to play out.
Helping or Hindering? Too Soon to Tell
But while clearly some major land gaming operators – Station Casinos and Caesars Entertainment, most notably so far – have placed their bets on the line that the two different gambling formats can be symbiotic, over in California, not all casino operators are so sure. And while some industry analysts who are watching the Golden State carefully to see which way the online wind will be blowing in 2014 say that it’s inevitable that California will cave sooner rather than later, that doesn’t mean it’s going to be a fight without a few arrows being slung.
“I don’t have any doubt we’ll have legal online poker in California,” I. Nelson Rose, a Whittier Law School professor who specializes in gambling law, predicts. “Only politics is preventing it.”
“Politics” is a politically correct way of saying “Indian tribes,” as these casino operators peppered throughout the state have, to date, been one of the primary stumbling blocks to launching an online presence in California. After all, unlike Stations and particularly Caesars, they don’t have major branding symbiosis behind them, since they are generally just named for the tribe that operates and sometimes owns the casino in question. And on the other side of the coin, these operators don’t hesitate to throw their weight around in the legislature with lobbyists representing their interests.
“The tribes have done a tremendous job of using the wealth generated from gaming to gain political power,” Rose says.
Rose points out that – unlike the viewpoint of major casino brands that see the potential for one medium to boost the other – Indian casinos tend to see the Internet as a threat to their business. But with betting on the ponies already legalized in California, Rose believes this is a horse that has clearly left the barn, and is simply on its way to its final destination. And the reason, in this expert attorney’s estimation, is simple: California desperately needs to boost its state tax coffers, given its somewhat abysmal current financial picture. And Rose believes this will come to pass – for legalized Internet poker, anyway – during the 2015 legislative session in Sacramento.
Coming Sooner Rather Than Later
Rose isn’t alone in his conjectures about California’s online poker direction, either. Jeff Ifrah – an attorney who also has a gaming law focus and practices out of Washington, D.C. – foresees other states’ success as a bellwether for California to move forward with it as well.
“There haven’t been any incidents where someone has accessed the system and actually played the game from outside of those three states, as far as I know,” Ifrah noted, referring to the relative success of the geo-location systems that online sites are using to determine where players are located at the time of play. If anything, the geo-tracking systems have worked a little too well, sometimes keeping people who really are within a state’s borders from playing online, if they are too close to the borders in question.
“California coming online would dwarf any success that those other markets had,” Ifrah said, referring to the state’s 38,041,430-person population base, which makes it far and away the largest of any U.S. state.
Ifrah also thinks that California’s Indian tribes may have tunnel vision when it comes to their paranoia about the online market.
“It’s not like opening another casino across the street,” Ifrah says. “Online gaming can actually generate new foot traffic for land-based casinos.”