New push for online gaming

An illustration of an online poker player. (Photo: photosani)

Three months after attempts to reach an agreement to establish internet poker in California fell apart, a major California gaming tribe says it has joined a coalition to push for new legislation to bring online gambling to the state.

It is at least the fourth effort in as many years to bring internet poker to California, which by one estimate would generate more than $260 million annually and nearly $400 million annually within a decade. Three other states – Nevada, Delaware and New Jersey – have authorized internet poker.

San Manuel’s decision to join the coalition seeking to bring in PokerStars suggested that a new round of intense talks was on the way.

The San Manuel Band of Mission Indians said Tuesday it had joined a group that includes the Morongo Band of Mission Indians, California’s largest card clubs and the Amaya Gaming Group, owners of several companies that together serve the bulk of the world’s internet poker market. Those companies include PokerStars, a major player in international gaming.

The California negotiations foundered in August, at least in part because of the efforts by Morongo and the card clubs to bring in PokerStars and other out-of-state expertise. There also was disagreement about the role of horse racing tracks in online gaming.

But those familiar with the talks said then that another effort would resume in 2015.

San Manuel’s decision to join the coalition seeking to bring in PokerStars – a move that other tribes opposed in the earlier negotiations – suggested that a new round of intense talks was on the way.

The early announcement came weeks before the formal beginning of the new legislative session, and nearly two months before lawmakers return to Sacramento for their regular schedule of floor sessions and hearings.

“We are pleased to join this coalition,” said Lynn Valbuena, chairwoman of San Manuel, said Tuesday in a written statement. “We are convinced that the various interests must work together if we are to be successful in establishing a well-regulated environment and the best-in-class Internet poker industry for California.”

Morongo Chairman Robert Martin said San Manuel’s decision “marks a new day in our efforts to authorize online poker in California … As tribes come together on this issue, the opportunity for success grows.”

The California market is viewed as the jewel of the U.S. online gaming market. There are about 750,000 to a million players in California who would participate in internet poker if it was legalized, according to legislative estimates.

Any legislation would require the signature of Gov. Brown, who has not said whether he supports online gaming.

The card clubs in the coalition include the three largest in the state — the Commerce Club, the Hawaiian Gardens Casino and the Bicycle Casino. A spokesman for the card clubs, attorney Keith Sharp, said the coalition sought legislation “that provides strong regulation and consumer protection.”

Morongo operates the Morongo Casino Resort & Spa near Banning in Riverside County, while San Manuel operates the San Manuel Indian Bingo & Casino in Highland.

Amaya owns the Rational Group, which in turn owns and operates PokerStars, Full Tilt, the European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and the Asia Pacific Poker Tour. According to the company, “these brands collectively form the largest poker business in the world, comprising online poker games and tournaments, live poker competitions and poker programming created for television and online audiences.”

When the most recent negotiatons came to a halt in August, a number of tribal leaders noted that they were unable to reach agreement on a bill with the end of the 2014 session just weeks away.

They “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,” according to a written statement released jointly by a dozen casino-owning tribes, including Agua Caliente, Barona, San Manuel, United Auburn and Yocha Dehe.

In a separate statement, San Manuel agreed, saying 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.”

Aside from gaming worth hundreds of millions of dollars annually, the earlier 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.

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