CALIFORNIAN HEARINGS (Update)
12 February 2010
The pros and cons of legalised online poker
Californian Sen. Roderick Wright's informal Senate
Government Organization Committee enquiry into the
intrastate legalisation of online poker continued
Tuesday with a trenchant observation by the Senator as
further testimony was heard: At this time of day, Im
going to guess 30 000 to 40 000 people are playing in
California, he said. Its not as though were sitting here
making a decision whether or not people are going to
play Internet poker. That ships sailed.
the panel heard from the consulting firm Global Betting
and Gaming which estimated the number of active accounts
held by state residents dropped from 7.8 million in 2006
to 5.7 million in 2007, but has since soared back to 8.4
million this year and is on its way to more than 10
million by 2012.
This potential reservoir of
revenues for the state is going to offshore companies.
Californians who play on those sites may or may not
be breaking the law, the director of the states Bureau
of Gambling Control testified, There is some debate
whether its currently illegal to sit down and play at
your computer under state law, said Jacob Appelsmith.
That leaves the state with two choices, Appelsmith
said: Either make it clearly illegal and try to seize
players accounts, or establish a legal, intrastate
system that would protect players and allow the state to
license and tax operators.
We believe the status
quo is unacceptable, he said.
expressly allows states to establish online poker sites
that could accept accounts only from their own
residents. Gaming interests eager for business and
lawmakers eager for new sources of state revenue are
exploring whether California should pursue that option.
Lesley Lohse, chairwoman of the California Tribal
Business Alliance, said establishment of
state-sanctioned Internet poker would be in direct
violation of compacts and agreements with the tribes.
George Foreman, an attorney for the Morongo tribe,
argued that because poker is not a banked game, but
rather one in which players compete against each other,
it is not subject to the compacts prohibition on
allowing anyone other than tribes to operate gaming
Tribes have no exclusivity with respect
to poker, he said.
Senator Wright said his
committee will explore ideas that might allow the state
to collect up to $600 million in taxes and licensing
revenue and also safeguard players by establishing
regulated sites that protect against cheating and ensure
prompt payout of winnings.
I think we have to do
something, he said. I dont know what yet.
testified that software exists to protect players and
ensure only California residents 21 or older are
permitted on a legal intrastate site.
the technology to do this, said Chris Derossi, chief
executive of online gaming software company CyberArts.
Those consumers who trust their online bank should have
no difficulty trusting the online poker world.
Several experts testified that a high percentage of
California players would gravitate to a legal site if
one existed and additional players would come on board
if they knew that regulated, legal sites were available.
I think players would prefer to play with a legal
entity within California, said William Eadington,
director of the Institute for the Study of Gambling and
Commercial Gaming at the University of Nevada, Reno.
Leo Chu, owner of the Hollywood Park Casino, said
online poker players largely prefer to play at home and
theres little that legal card clubs can do to attract
Whatever we do, they will play
online, he said. We need to get these people to play
where the operators will pay taxes to California. To use
a Las Vegas slogan, whatever happens in California
should stay in California.
The Desert Sun, which
has been closely following the proceedings, reports that
the Agua Caliente Band of Cahuilla Indians sumitted a
statement to Senator Wright's committee, in which Agua
Caliente tribal chairman Richard Milanovich wrote that
the tribe had a neutral stance at this time.
havent seen a product emerge yet that we believe is
either ready to embrace or oppose, Milanovich wrote. The
tribe, which operates The Spa Resort Casino in Palm
Springs and Agua Caliente Casino Resort Spa in Rancho
Mirage, is intrigued with the notion of the intrastate
Internet poker in California from the vantage point of
how it would be structured, how it would be regulated
and how to ensure that those engaged would ultimately
capture a significant market share from the non-licensed
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