Indian tribes in California have recently banded together in an uncharacteristic show of unity in hopes of keeping “bad actors” out of a possible online poker scheme in the state.
Urging California lawmakers considering regulation to exclude “bad actors whose past behavior and tainted brands and assets would erode the integrity of Intrastate Internet poker,” the tribes took aim at PokerStars’ reported collaboration negotiations with one tribe and a few card rooms.
As is well-known, this is not the first time PokerStars has been called a bad actor for continuing to operate in the U.S. post-UIGEA and probably won’t be the last. But is it a fair label to put on the world’s top poker site considering that the previous settlement with the DoJ allows PokerStars to apply for a license just like any other potential operator?
Let’s face it. PokerStars catapulted to the top of the online poker industry in part by remaining in the U.S. market while others left. For this, there is an incredible amount of contempt and jealousy among gaming companies and others who cry foul over PokerStars gaining perhaps an “unfair” advantage. But was it unfair?
PokerStars issued a statement as first divulged by Online Poker Report that took offense to the tribal condemnation. Released by PokerStars’ Head of Corporate Communications Eric Hollreiser, the statement does make some interesting points, such as:
“The fact is that UIGEA did not make illegal any gaming that was not already illegal before its passage. This has been confirmed by the U.S. Third Circuit Court of Appeals and by the U.S. Department of Justice. PokerStars operated under legal opinion that its offering of online poker did not violate U.S. law before 2006 and maintained that opinion following the passage of UIGEA.”
That statement is supported, according to Hollreiser, by a letter written by Principal Deputy Assistant Attorney General Brian Benczowski to House Committee on the Judiciary Chairman Rep. John Conyers in 2007 stating that, “[T]he UIGEA itself does not make any type of gambling legal or illegal, rather, the statute is focused on regulating the methods of payment for already-illegal gambling.”
Hollreiser also states an opinion by the U.S. Court of Appeals in Interactive Media Entertainment & Gaming Ass’n v. Attorney General that found the UIGEA “does not itself outlaw any gambling activity, but rather incorporates other Federal or State law related to gambling.”
The intent of the UIGEA and whether or not those examples are proof enough that PokerStars is not the bad actor as has been portrayed are much better left to attorneys and gaming regulators to decide. It does seem proper that PokerStars be given the opportunity to apply “just like any other company seeking to operate in California and investing in a fair and well-regulated market,” as Hollreiser requests.
California tribes have long been stifling any process in online poker regulation while looking out for their own interests. Part of the problem is there are a large number of tribes in the state and they all can’t agree on what their best interests are. Naturally, the tribes can mostly come together on the issue of keeping other gaming interests out. But is that fair?
PokerStars points out that it has always met “the highest standards of suitability that maximize consumer protection and consumer choice.” The Rational Group cites the procurement of 11 licenses in jurisdictions worldwide, “more than any other company,” as evidence of this.
Whether the tribes get their way or PokerStars is allowed to make their case remains undecided at the moment. But PokerStars’ desire to be treated as any other applicant should be considered. Hollreiser is correct in pointing out the following:
“Most regulatory frameworks around the world leave the assessment of suitability to qualified expert regulators. The same position has been taken by the legislators in New Jersey. The California Gambling Control Commission has a 15-year history of successful consumer protection and is more than qualified to continue to determine suitability.”
It is evident that tribes in California are attempting to limit competition based on the alleged bad actor status affixed to PokerStars. But as was done in New Jersey where PokerStars was permitted to apply, it only seems fair that a PokerStars application should also be allowed to be presented before the commission. Whether the UIGEA was violated by PokerStars or is being misrepresented by others in an effort to keep PokerStars out is up to gaming regulators to decide.