Levine’s online poker proposal is closely monitored by gaming tribes

A seemingly innocuous bill that would implore the Department of Justice to begin investigating the future of online poker has quietly been one of the most closely watched bills among tribal gaming interests this year.

While hardly any tribal governments have taken formal positions on the measure, they have been actively working behind the scenes, monitoring the bill's progress.

The bill, AB 2026 by Assemblyman Lloyd Levine, has been amended once again after a contentious hearing in the Senate Governmental Organization Committee. Levine had tried to actually legalize a system of California-only video poker, but pared back the scope of his bill after quiet opposition from gaming tribes and anti-gambling forces.

Levine's bill, in its current form, would require the Department of Justice to create a set of guidelines and regulations for online poker in California. But the Legislature would have to affirm those regulations and formally legalize online poker in a future bill, after the DOJ has come up with its guidelines.

The drive to re-legalize video poker stalled amid concerns that tribes would be shut out of any new online poker expansion, because of technical requirements in state law.

The once-thriving business of online poker was outlawed by the federal government in 2006, the feds used their powers to regulate interstate commerce to restrict the abilities of credit card companies to do business with online poker centers, many of which are not based on American soil.

Levine says his measure will help protect gamblers in California, many of whom continue to illegally gamble on off-shore sites, and bring millions in revenues to state coffers.

Proponents of the crackdown said online gaming provided a convenient front for money-laundering while preying on children and gambling addicts. At the time the ban was adopted, it was estimated that 23 million poker players were among the Americans who bet $6 billion per year online, accounting for half the worldwide market, according to analysis by the Congressional Research Service.

But Levine and proponents of the bill say the federal government left room in its national crackdown on online poker for states to step in. If a state can ensure that all players and servers are located in California, states would be free to create new, state-only poker sites.

Politics, not technology, has been the obstacle to getting a state-only plan approved. Tribes have raised quiet concerns that they would be shut out of any new online poker business, or at the very least need to amend their existing gaming compacts with the state to get in on the action.

"For tribes to do this, it would have to take a compact amendment," said Sen. Jim Battin, R-La Quinta, who represents many tribal nations in his district. That's a very big problem This governor tends to ask for the world, the sun and the moon" from tribes in negotiations.

Only one tribe, the Morongo Band of Mission Indians, registered formal opposition to the bill, and that was on procedural grounds. Morongo's objections centered on the bill being amended from a study bill to a bill that would actually implement

But behind the scenes, a number of the state's largest gaming tribes have closely monitored the progress of Levine's plan.
Proponents of the bill insist they want tribes to be a part of the online gaming action.

"It's our desire that regulated gaming entities can play, and we don't intend to exclude anybody," Levine said. "My personal opinion is, I think this is going to open up a new market to the tribes that they don't have access to."

Other supporters of the bill also say tribal support is key. "If they're not going to play, it's not going to happen," said Jim Tabilio, president of Poker Voters of America, which is sponsoring Levine's legislation. "We want the tribes to be able to play."

But Tabilio admits there have been complications, and legal questions that still need to be resolved.

"Like pretty much anything that has to do with Indian gaming law, the feds have managed to screw this up over the years. It's just a morass," he said. "The prevailing opinion we're moving forward on is that Indians can do it. It may or may not require an amendment to the compact. But we're operating on a series of assumptions based on what attorneys have been telling us."

But Battin still has concerns about a new $1 billion gaming business that could shut tribes out of the process.
"It doesn't matter what the intentions are," Battin says. "What matters is what the bill does."