Rival attempts to legalize Internet poker in California are underway in the Capitol, setting the stage for a lobbying and political showdown over a market worth hundreds of millions of dollars annually.
Two measures unveiled on Feb. 21, the deadline to introduce new bills for the year, would authorize online poker websites, letting gamblers participate from anywhere they can access the Internet. Similar efforts failed last year after heated negotiations between tribal interests and lawmakers ended without an agreement on the final form of the complex legislation.
This year, again, there are divisions.
“There are a lot of moving parts,” said Sen. Lou Correa, D-Santa Ana, the newly named chairman of the powerful Senate Governmental Organization Committee, which has jurisdiction over alcohol, horse racing and gambling, among other issues. “But we will work hard, and I am hopeful.”
There are big dollars involved.
Legalizing Internet poker in California would generate $263 million in revenue the first year and some $384 million within a decade, according to a December 2013 report prepared by Academicon, a research and consulting firm, and PokerScout, a marketing research company that tracks gaming.
Estimates vary widely, but the Senate committee believes there are an estimated 750,000 to 1 million online poker players in California, and the number is likely to increase with legalization. These include players who are registered to participate in states that allow it, such as Nevada and New Jersey, or in unregulated or other online games across the country.
One bill, AB 2291 by Assemblyman Reginald Jones-Sawyer, D-Los Angeles, has the support of the Yocha Dehe Wintun Nation, the Agua Caliente Band of Cahuila Indians and the Pechanga Band of Luise? Indians.
The other bill, Correa’s SB 1366, has support from the Dry Creek Rancheria Band of Pomo Indians, which operates River Rock Casino in Alexander Valley, the Federated Indians of Graton Rancheria, which operates the Graton Resort and Casino in Rohnert Park, the San Manuel Band of Serrano Mission Indians, the United Auburn Indian Community, the Rincon Band of Luise? Indians and others.
Both bills legalize Internet poker, but they differ over eligibility requirements, licensing and launching costs and security rules, among numerous other provisions.
The Jones-Sawyer bill requires an operator to make a $5 million one-time payment after the license has been approved; in the Correa bill, that fee is $10 million, with additional fees to be determined, depending on the licensing level.
Both bills leave open the cost of applying for an Internet poker license. Last year, in legislation that ultimately was rejected, the application fee was set at a minimum of $1 million. Both measures also waive background investigations and license fees for tribes that have conducted poker games in person on their own tribal lands over a period of years.
Determining licensing and eligibility rules will play an important role in this year’s negotiations, as will the number of poker websites for each operator. The Jones-Sawyer bill suggests limits on websites; the Correa bill does not.
But both sides say the bills face major negotiations.
“As most of you know, the exact language of an introduced bill rarely if ever is what makes it through the process,” three tribal chairmen – Jeff Grubbe of Agua Caliente, Mark Macarro of Pechanga and Marshall McKay of Yocha Dehe – wrote Feb. 21 to other tribal leaders. The three are among those who support the Jones-Sawyer bill. “We fully expect the bill to evolve as our conversations continue,” they wrote.
A lot of work already has been done, in part because of last year’s negotiations, said one tribal spokesman.
“The work that was done in the Senate built the most extensive record on this issue and is unmatched,” said Jacob Coin, a spokesman for the San Manuel tribe, a sponsor of the Correa bill. “The policy matters certainly have been researched and discussed and debated, so that’s certainly a big part. The latest reiteration is built upon the foundation of all those efforts last year.”
Dry Creek tribal officials said they had no comment on the legislation. Graton Rancheria representatives referred calls to Station Casinos, their Las Vegas-based casino manager. Station representatives did not provide a comment.
The Senate has been the principal forum for online gaming legislation for the past five years because of Sen.Rod Wright,
D-Inglewood, the former chairman of the Senate Governmental Organization Committee and a specialist in gaming legislation.
But Wright is not likely to be a participant this year. He was convicted of eight felony counts of voter fraud and perjury on Jan. 28 for lying about the location of his residence when he ran for office and registered to vote over a period of years.
He remains in the Senate pending his May 16 sentencing – he could receive a maximum of eight years and four months in prison – but he was removed as chairman of the Senate Governmental Organization Committee, with Correa taking over the post.