Hearing Scheduled for Intrastate Online Poker in CaliforniaCommerce Casino and Morongo Tribe Amongst Entities Supporting Regulation |
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California — the cash-strapped state that has shown willingness in the past to be a trendsetter when it comes to legislative action — is ready to hold a hearing on the merits of regulating online poker. California State Sen. Roderick Wright (D-Inglewood) told the LA Times this week that the state legislature is planning on holding a hearing on the issue in February.
“I think it is workable and a potential source of new income,” said fellow State Sen. Dean Florez (D-Shafter). “How you structure it is the key.”
The Morongo Band of Mission Indians and the Commerce Casino are two entities in a group of gaming-associated groups who are calling for regulation. Both the Morongo tribe and Commerce hope to operate online poker websites if the legislation became law.
“About one million Californians are playing poker offshore right now,” said Patrick Dorinson, a spokesperson for Morongo, referencing the popularity of current online poker sites that serve American players.
Lawmakers are hesitant to predict how much intrastate online poker could bring in to the state in terms of revenue, but the LA Times said that if the state operated poker like it does its Indian-run slot machines, more than $250 million could be raised per year.
However, not all groups support the proposal.
“Card game gambling on the Internet would take business away from brick-and-mortar casinos,” said Robert Smith, the chairman of the California Tribal Business Alliance.
Anti-gambling advocates have also voiced concern on the issue.
“If someone can come home from work and give their credit-card number to an Internet site and lose thousands of dollars, that is going to exacerbate a bad situation” Jim Butler, executive director of an advocacy group against gambling expansion, told the Times.
California would become the first state to explicitly legalize and regulate intrastate online poker if this proposal becomes law.
However, the state has its share of obstacles even if the legislature decides that this is something it wants to pursue.
The Department of Justice has long claimed that all forms of gambling on the Internet are illegal, but there is no applicable law that states such a position, and most lawyers agree that the law that the Department of Justice refers to, the Wire Act, only applies to sports betting.
A recent ruling by the U.S. third circuit court of appeals clarified that the UIGEA, which was passed in 2006, did not criminalize any forms of online gambling. That law just affects the payment processors and how money can be transferred onto sites.
While California legislators don’t appear to be intimidated by the DoJ’s position on online poker, U.S. law is much less vague when it comes to the operation of online gambling. State and federal laws prohibit companies from operating Web-based gambling games in the country.
However, I. Nelson Rose, a professor at Whittier Law School and a gambling law expert, has advised Commerce Casino that “California would be exempt from federal restrictions if the businesses were operated entirely within state lines and served only Californians,” according to the Times. Federal attorneys reportedly dispute this claim.
This is not the first time the California government has entertained the notion of regulating the online poker industry in its state. Assemblyman Lloyd Levine first introduced a bill that would do just that in February 2008. The government never acted on that bill before the legislative session adjourned for the year.
It will likely be a long road toward any kind of intrastate poker, but California has shown that it’s not quite ready to give up on the idea quite yet.
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