Wright submits new poker bill, Reid says his is still alive

Sen. Rod Wright has reintroduced legislation from last session to legalize online poker in California.

His SB 45, which went into print late Wednesday, is similar to SB 1485, which he carried last session but which never made it out of the Senate. Both bills would require the California Gambling Control Commission to enter into contracts with up to three hub operators. The operators would be allowed to offer online poker to California residents under contracts lasting up to 20 years.

Meanwhile, U.S. Senate Majority Leader Harry Reid said late Wednesday that his proposed online poker legislation is still alive – contrary to some published news reports.

The Las Vegas Sun reported earlier that he was dropping the efforts, but Reid said his comments were taken out of context.

One of the states most likely to be affected by potential federal legislation is neighboring California, where multiple online poker bills could be fighting it out in the newly-minted legislative session.

On Monday, Sen. Lou Correa, D-Santa Ana, introduced poker legislation on behalf of the California Online Poker Association. This organization is led by a pair of southern California gaming tribes, the Morongo Band of Mission Indians and the San Manuel Band of Mission Indians. Correa’s SB 40 calls on the California Gambling Control Commission to offer a license to offer online poker within California.

Morongo had been shopping to be the sole legal source for online poker in California. Any California tribe could be a member, and revenues would be split.

“COPA opposes the current lame-duck effort by Harry Reid because it hurts California,” said Association spokesman Ryan Hightower. “Reid’s effort rewards the Nevada gaming interests that gave him hundreds of thousands of dollars in campaign donations during the recent election. California has a $25 billion deficit and an unemployment rate of 12 percent. Any revenues generated by Internet poker in California should stay within the state and not be shipped off to Washington, D.C., or Nevada or even offshore.”

But Correa’s bill – surprisingly, to some – does not contain language that would offer an exclusive license to the Morongo-leg consortium or anyone else. Some feared that the tribe was trying to create a monopoly.

David Quintana, the lobbyist and political director for the California Tribal Business Alliance, said the tribe had been using the specter of federal legislation to push for state-sanctioned poker in the near term.  Proposed language of the Reid legislation had been circulating since at least last week.

In addition to pre-empting state rules, Reid’s plan would also have trumped key pieces of previous federal legislation relating to online gambling. Those include The Wire Act, the pre-Internet 1961 law that prohibits “betting or wagering knowingly using a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers.” In doing so, it would end the as-yet legally unsettled debate over whether this law bans Internet gaming.

The bill would also end some of the provisions of the Unlawful Internet Gambling Enforcement Act (UIGEA), the 2006 law it purports to strengthen, by making exemptions for horse racing bets across state lines. However, Reid’s bill would specifically outlaw most other forms of Internet gaming.

Reid’s bill was seen by critics as an effort to make sure that Nevada casinos would not be left out of any nationally sanctioned online poker system. These casinos, particularly Harrah’s and MGM, have given heavily to Reid, including this year, when he survived a tough general election challenge in a big Republican year.

But that same big Republican year has probably doomed federal poker legislation for the foreseeable future.

It was the last Republican majority in Congress that passed UIGEA in 2006, and many members of the GOP have said they are morally opposed to expanded gambling. With Reid’s Democratic majority in the Senate dropping to a bare 51 seats – nowhere close to the 60 needed to overcome a filibuster – many believed the current lame-duck session was his best chance to push something through.

Reaction from tribes to Reid’s bill was generally negative. Much of this has to do with Reid’s historically cozy relationship with Nevada casinos, and many believe the bill is written in such a way to give these casino interests a leg up over tribes in offering Internet poker.

The Tribal Alliance of Sovereign Indian Nations, a 14-tribe organization that includes the biggest Southern California gaming tribes, including Morongo and the Pechanga Band of Luiseño Indians, has been circulating a letter opposing the bill on the grounds that it would shut tribes out of this potentially lucrative new form of gaming.