CALIFORNIA ARGUMENTS OVER PAUMA'S FREE ONLINE GAMBLING

12 September 2008

New website designed for marketing rather than gambling say San Diego tribe

The recent launch of a GameLogic-powered online gambling website by the Pauma Band of Mission Indians, offering free play on video slot machines, table games and card games, has become a hot subject of discussion by pro and anti gambling personalities.

The Pauma tribe, which operates the Pauma land casino in North County near San Diego in California says that the online site is a marketing aid offering free play in which credits redeemable at the land casino can be won. Players can also get special cards at the land casino that they can take home and play for points which they can later trade at the casino for credit to play on the gambling floor. The goal is to attract online players to the tribe's land establishment, using the PlayAway concept pioneered by Foxwoods (see previous InfoPowa report).

State gambling regulators are undecided on the legality of the website, saying they have yet to determine whether the games are legal, and a gambling watchdog group has claimed that the games are not properly licensed, reports the North County Times this week.

But online gambling legal and academic expert, Professor I. Nelson Rose is adamant that it is within the law, saying: "If you can't lose, it's not gambling."

The 918 member Pala Band of Mission Indians is located in northern San Diego County on a 12 273-acre Pauma Valley reservation, established for Cupeño and Luiseño Indians, who consider themselves to be one people. The Pauma Band is one of seven Bands of the Luiseno people located in San Diego and Riverside counties.

The Pauma tribe owns and operates Casino Pauma, providing employment to the tribal members and the surrounding communities. Its revenues enhance the tribal government's ability to meet the essential needs of the membership.

North County Times asked for comment on the new online site from the California attorney general's office, but was told that state lawyers were not aware of Pauma's online games. The office is now "looking at the Web site to see if the games violate the terms of a gambling agreement signed by gaming tribes and the state. Under that agreement, tribes are not allowed to offer gambling outside their reservations."

In addition to questions about the legality of Pauma's online games, the tribe may have launched the venture without a necessary license. Anna Carr, a spokeswoman for the state Gambling Control Commission, said Pauma's partner, the Boston-based GameLogic Inc., submitted an application for a vendor's license to comply with legal requirements that companies that sell games to tribes must be licensed by the state.

The application, which includes a background check of the company, is still being processed, Carr said.

Cheryl Schmit, executive director of Stand Up for California, a gambling watchdog group, said she believes the games are legal. But she said the tribe's online site should not be active until the state approves its license.

"They would need to be vetted by the Bureau of Gambling Control (under the attorney general's office) and approved by the Gambling Control Commission before they begin to play the games," Schmit said.

However, in 2006 the National Indian Gaming Commission, a federal agency that oversees tribal gambling, said in an opinion that a similar game offered by GameLogic was legal because "no gambling is done over the Internet, nor does any money change hands that way."

A spokeswoman for GameLogic insisted that its games are legal and have been approved by gambling regulators in several other states.

The Pauma tribe plans a $300 million expansion of its land casino, a project that includes a 19-story hotel and 2 500 slot machines on the tribe's reservation about 20 miles north of Escondido. In 2006, Pauma announced it would build the expansion project with its partners, the Mashantucket Pequots' Foxwoods Development Co.

Professor Rose said that as a marketing ploy the free online gambling concept was one which worked. He said that Pauma's online games could additionally help to build a customer base and the infrastructure necessary to switch over to real money operations if online gambling restrictions in the state are changed.

Online Casino News courtesy of InfoPowa