Not everyone agrees, but in my opinion a lot of progress towards an online poker bill was made in California over the past few weeks. The question is, will it be enough to get a bill passed?
Following this week’s developments, it seems the only power players that remain in the camp of all out resistance to PokerStars are the Pechanga Tribe and the Agua Caliente tribe. These are the only two entities, from the coalition that at one point in time contained 13 tribes, who publicly criticized Assemblyman Reggie Jones-Sawyer‘s online poker bill, AB 167.
Keep in mind this was a coalition that was speaking with one same voice as recently as this past summer.
San Manuel jumps ship
The progress towards a potential PokerStars-friendly bill dates back to late last year when the San Manuel Band of Mission Indians defected from the coalition of 13 tribes headed by the Pechanga Band of Luiseño Indians and joined the PokerStars coalition.
The addition of San Manuel to the already powerful and united alliance of the Morongo Band of Mission Indians, Commerce Casino, Bicycle Casino, and Hawaiian Gardens Casino didn’t really tip the scales in one way or the other, but it did call into question how unified the tribal coalition was and seems to have been a signal as to which way the wind was blowing.
It also seemed to have a snowball effect.
The movement of San Manuel to the opposition side was widely believed to be a case of being full of sound and fury signifying nothing, but it was a start, and the first sign that the anti-PokerStars coalition wasn’t as united as a Greek phalanx defending the pass of Thermopylae.
The real progress started with the introduction of Reggie Jones-Sawyer’s AB 167, an online poker bill that dealt with the two biggest issues on the table, racetracks and bad actor clauses.
AB 167 can best be described as “PokerStars-and racetrack-friendly” as it contained limited language prohibiting “bad actors/tainted assets” and expressly allows racetracks to apply for online poker licenses.
AB 167, and the fact that there was so little opposition to the bill (no unified letter this time around), was a harbinger of what occurred this past week.
Rincon, Pala, and UAIC
AB 167 seems to have sparked something among other tribes in California, as this past week three tribes announced they were leaning towards AB 167’s approach to bad actors and racetracks.
The three tribes will all be major players in the online poker market in California:
· Rincon Band of Luiseño Indians – Partnered with Caesars Entertainment
· Pala Band of Mission Indians – Pala Interactive’s proprietary software is already in use in New Jersey
· United Auburn Indian Community – Partnered with bwin.party
At the Western Indian Gaming Conference, Rincon’s chief legal counsel Stephen Hart stated, “there are no bad actors anymore when the company transitions to new ownership,” according to Pechanga.net’s Victor Rocha.
Rincon Chairman Bo Mazzetti also addressed the issue, telling Press Enterprise, “There’s got to be a lot of give and take on all our parts.” Mazzetti added that for any bill to pass, “There will be some things we don’t like.”
Caesars’ about face
Perhaps even more importantly than the tribal shifts was Rincon’s partner, Caesars Entertainment, changing their tune. Jan Jones Blackhurst, a lobbyist for Caesars Entertainment, made similar comments to those made by the Rincon tribe, as did Seth Palansky, Caesars Vice President of Corporate Communications.
This is an important step, as Caesars, and their powerful lobby, have long-supported bad actor clauses in legislation. As the Poker Players Alliance noted, this positional change by Caesars moves the industry towards a more unified front, and not only in California.
PokerStars Head of Corporate Communications Eric Hollreiser also addressed the new dawn in California in a series of tweets:
“We welcome the support of all those who want to see a US online gaming market that protects consumers, generates tax revenue and (creates a responsible, vibrant and competitive marketplace). We are encouraged by the recent comments from Caesars, California tribes including Pala, Rincon and United Auburn and several dozen card rooms who believe that working together is best way to promote the industry, protect individual freedom & counter misleading, negative campaign of self-interested, anticompetitive groups.”
However, as Chris Grove noted, Rincon, UAIC, Pala, and Caesars stance on bad actors is not the same as the PokerStars-aligned Morongo and San Manuel tribes. In the Rincon letter to Assemblymen Gatto and Jones-Sawyer they leave the issue of tainted assets somewhat unresolved. This would permit Amaya Gaming, the new owners of PokerStars, to be licensed, but leaves the potential use of PokerStars’ software and/or databases in question.
Morongo willing to compromise
On top of the opposition to PokerStars fading, PokerStars supporters also seem willing to give a little ground as well.
Like Rincon Chairman Mazzetti, Morongo Chairman Robert Martin told the Press Enterprise last week that their side was willing to compromise: “There has to be compromise or it won’t get done…”
Precisely what this compromise would entail was left unsaid, and in the past the PokerStars side has been unwilling to give an inch, feeling they were completely in the right.
For instance, last year I proposed a hypothetical compromise that included prohibiting PokerStars from using its database as a concession, and was told by a spokesperson for the Morongo/PokerStars/Card room coalition that this was not an option on the table.
Perhaps this hard line approach has changed?
One reason tribes may be willing to compromise
So what sparked all these changes of heart?
Without doubt the most pressing reason is a sense of urgency by current and potential online operators. 2015 could very well be the make or break year for the industry.
If a heavily populated state doesn’t pass an online poker expansion bill this year there might not be enough time to keep New Jersey’s, Delaware’s, and Nevada’s online poker markets from withering. Even if bills are passed in 2016, the earliest these states would be able to launch would be mid to late 2017; some two and a half years from now.
By then there may not be a legal online poker industry left to save in New Jersey, Nevada, and Delaware considering the decline in those markets.
There is also the continued push from Sheldon Adelson to ban online gaming at the federal level. While rival factions are busy self-destructing poker bills in California, they may find the rug pulled out right from underneath them by Adelson.
Is it enough?
One issue that makes passing an online poker bill extremely difficult in California is that as a bill that impacts tax laws it is introduced as an emergency measure, which means it must pass the legislature with a 2/3 vote. So any significant opposition is enough to derail it.
Dave Palermo, an industry veteran, posited that the new position by UAIC, Pala, and Rincon causes more problems than it solves, and according to Palermo’s sources, as long as Pechanga remains opposed to PokerStars there will not be a compromise.
However, one thing we should consider is the optics. Will Pechanga look like the sole party pooper if a bill once again fails to pass? In previous years there were divided coalitions of special interest groups, but this year is shaping up to be a case of Pechanga/Agua Caliente vs. the world, and if the Morongo/Card room/PokerStars coalition does make concessions, and Pechanga still kills the bill, it will not look good.