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Revitalizing California's Potential Online Gaming Regulation

Revitalizing California's Potential Online Gaming Regulation 0001

Since California State Sen. Rod Wright withdrew his bill to license and regulate Internet poker within the state in late June because of a lack of support from California's card clubs and Indian casinos, Poker Voters of America has gotten involved to try to revive the legislation.

The organization proposed an amendment to the bill that would set up a mitigation fund that would allocate up to $100,000 annually over five years to each land-based Indian casino, card club and racetrack that may face competition from online poker.

Another proposed amendment would increase the number of licensed operators allowed under the legislation from three to five, which would create more competition to benefit players.

Melanie Brenner, executive director of Poker Voters of America, hopes the amendments are enough to get California's gambling interests on the same page to push for legislation this year.

"We're not giving up for this year," Brenner said. "We still want to try to move this year if at all possible, so we're looking at ways to include this in a budget play. We are one of the few revenue bills available. It's a long shot, but I still think there's an opportunity to be part of that mix."

Part of the pitch made by Brenner to California businesses and representatives is that the state should act quickly to set up an intrastate poker network before federal legislators create a nationwide structure.

This has made some people question if Poker Voters of America was looking out for the best interests of poker players. A federal online poker system would obviously be better for players than a more restrictive intrastate system.

"There is no federal bill," Brenner said. "We've been waiting how many years for a federal bill. If the federal bill comes, great. One of the reasons we came into existence is we saw no movement on the federal level and don't see any movement on the federal level soon. We needed to come up with something. This is an alternative to create a regulated system within the U.S."

Despite the progress made this year by Barney Frank to get his bill passed through the House Financial Services Committee, federal licensed and regulated Internet poker may still be farther away than players hope. Frank's bill is still a long way from getting a positive vote from the full House, and Internet poker legislation has yet to make any progress in the Senate. The November elections also could throw a wrench in the mix.

The state level can be easier and quicker to maneuver through. It's smart to play the levels of government against each other. That's politics. Looming federal legislation puts pressure on states like California to make their move to claim revenue for the state. If states, especially ones with the number of poker players of California, passed online poker legislation it would put pressure on Congress to make sure the federal government doesn't miss out on potential revenues.

"(Poker Players Alliance executive director) John Pappas would tell you the best thing that's happened to him is what we're doing in the state, because it puts pressure on the feds to do something," Brenner said.

The question in California is if a intrastate regulated system would be better for players in the state than the current unregulated environment. That depends on the final legislation. So far, it is up in the air.

"We never talked about restricting play," Brenner said. "If someone in California wanted to play at an offshore site, there's not a restriction on doing that. But we feel strongly that there's enough players in the state for an intrastate system to be beneficial. The caliber of operators we'd bring in to run these hubs will create an environment people will want to play on, and they will have consumer protections you don't have on offshore sites. We believe people will play that haven't played before because they will be playing on a regulated system."

If Poker Voters of America does not succeed in the long-shot effort to get online poker included in the budget, it will probably need to find a new sponsor for the bill moving forward. Last month, a Los Angeles County Grand Jury unsealed an eight-count felony indictment accusing Wright of filing a false declaration of candidacy, voter fraud and perjury. California law requires a candidate for state legislative office to reside in the district he seeks to represent, and it is alleged that Wright lived in Baldwin Hills rather than the Inglewood district he represents.

"We've done a lot of work educating legislators and a number have shown interest in being the sponsor for next year," Brennen said.

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