One of the primary hurdles in the California online poker discussions has been opposition from the state’s Indian tribes. Much of the existing brick and mortar California gambling industry is owned and operated by Tribal business; hence they were naturally concerned about how the online gambling initiative would affect them. One of the biggest recent news headlines concerning CA online poker was that a consensus has been reached by key California Tribes on the online poker issue.
One measure of progress came with the deal that each online poker license would be limited to two websites. This allows smaller tribal interests to effectively compete with the larger corporations, providing protection for them and therefore making the initiative more attractive to them. A great deal of time and effort has gone into attempts to bring the major Tribal coalitions into agreement on the matter, and it looks like this has finally been achieved.
The waters are not clear sailing yet however. In anticipation of online poker reaching legal status in the Golden State, several prominent tribes, including the Morongo Tribe, among others had already entered into a partnership with PokerStars concerning access to online poker services for California players. The existing California legislation that is being considered includes a ‘bad actor’ clause, which is designed to prevent offshore online gambling brands from participating in the state regulated online poker industry if they have been found to violate the UIGEA bill in the past. PokerStars falls into this category and according to the language on the bill, would be eliminated from participation in the online poker market in California.
Nevada has enacted Bad Actor language in their online gambling laws, and while New Jersey considered it, they ended up removing it prior to passage of the bill. PokerStars takes specific offense to the AGA’s attempt to eliminate them from the market. They recently shared that several prominent US based gambling entities, including Caesar’s Entertainment, offered to sell specific casinos to the Rational Group (owners of PokerStars). The AGA claims PokerStars is a criminal enterprise, yet its members want to sell their interests to the Rational Group, who was quick to point out that they felt this to be a very hypocritical position.
There have been multiple suggestions on how this can be handled. For states that actually do enact ‘bad actor’ stipulations, most are expecting a time penalty and possibly a fee as well before they can participate in a state’s regulated online poker options. Illinois is considering a 10 year penalty, while others are suggesting 5 years. Because this industry really is all about money, the fee is expected to be hefty if applied. A compromise is expected to be reached in time for the online poker bill in California to be passed this session. Whether or not this will happen is anyone’s guess, but there is a lot of motivation to get the show on the road, which might make opposing parties a little more willing to compromise on this issue. As the story unfolds we will continue to report on its progress here.