As clock ticks, online poker folds

An attempt to establish internet poker in California foundered this week in Sacramento, with rival interests – including tribes, horse racing tracks, card rooms and others – unable to reach agreement on legislation during the final weeks of the legislative session.

With three weeks to go before the midnight Aug. 31 deadline, the principals in the talks said there was not enough time to reach an accord this year. “Basically,” said attorney David Quintana of the California Tribal Business Alliance, “we just ran out of time. But we’ll be back.”

Legalized internet poker would generate some $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. There are about 750,000 to a million players in California who would participate in internet poker if it was legalized, according legislative estimates. Three other states – Nevada, New Jersey and Delaware also have online poker.

Lawmakers’ attention were focused on such major issues as rewriting and scaling back the $11.14 billion water bond for the November ballot and whether to delay the scheduled Jan. 1 startup of a likely boost in fuel taxes to curb greenhouse gas emissions.

Tribal leaders “have concluded that rushing a bill in the closing days of this legislative session will not allow for the level of careful public examination and confidence an issue of this magnitude requires,” said a written statement released jointly by a dozen casino-owning tribes, including Agua Caliente, Barona, San Manuel, United Auburn and Yocha Dehe.

The San Manuel tribe, in a separate statement, noted that “any effort to push a bill through by the end of this legislation session was going to face significant challenges, not the least of which is the limited time left to consider the bill under regular order.   The intrastate Internet poker legislation is a complicated measure that could impact state gaming policy for many years to come.”

Privately, sources familiar with the negotiations also said that lawmakers’ attention were focused on such major issues as rewriting and scaling back the $11.14 billion water bond for the November ballot and whether to delay the scheduled Jan. 1 startup of a likely boost in fuel taxes to curb greenhouse gas emissions. Gaming negotiators were not able to agree on the online role of horse racing tracks, sources said.

Two bills contained the gaming legislation, AB 2291 by Assembly Reginald Jones-Sawyer, D-Los Angeles, and SB 1366 by Sen. Lou Correa, D-Santa Ana. Correa, who is termed out this year, is the chair of the Senate Governmental Organization Committee, handles legislation dealing with liquor and gambling, among other issues.

Correa said he was dropping his bill, while Jones-Sawyer is expected to make a similar announcement by next week, sources said. Jones-Sawyer was not immediately available for comment.

The bills, with largely the same content, were both introduced in February just hours before a legislative deadline.

The action this week marked the third time in three years that online gaming interests have failed to reach agreement on a compromise bill to send to the governor’s desk.

There are big dollars involved.

Aside from gaming worth hundreds of millions of dollars annually, the legislation would have required participating companies to come up with a $5 million buy-in and direct some of those revenues – perhaps 5 percent – to the state.