California Tribes Feel Slighted By Online Poker Proposals


Posted by on Thursday, March 29th, 2012

The current online poker legislation before the California state legislature has Indian gaming interests feeling concerned that they may not get their due if the regulations are approved in their current form.

California gaming officials are rumored to be expecting anywhere from eight to 12 applications to provide online poker in the state. Although there is currently no cap on the number of licenses that can be granted, it is believed that only a fraction of those may actually win approval, it was reported by Card Player.

The California Tribal Business Alliance (CTBA) doesn’t like the idea that companies not located within California may receive licensing over existing businesses in the Golden State.

“The legislation as described would also let out-of-state interests come in to essentially extract revenue from California with no real constraints other than that they ‘partner’ with a legal entity,” said CTBA’s chairwoman, Leslie Lohse. Lohse referred to the latest proposal as an “inferior legislative product” that, if approved, would be a “harsh slap in the face” to California tribal gaming interests.

The land-based casinos of California tribes tallied $6.78 billion in revenue in 2010, which totalled 25 percent of the Indian market in the U.S., according to the Las Vegas Review-Journal. But a huge California licensing fee, such as the $30 million fee required in the currently proposed legislation, would seriously dampen the prospects of California tribes to seek licensing. However, the $30 million licensing fee is better than the $50 million fee that was proposed in 2011, and subsequently failed to advance.

Although tribal interests throughout America are not overly encouraged by online poker legislative proposals in individual states, they have also been less than satisfied with language used in federal online gambling schemes. The Chairman of the National Indian Gaming Association, Ernie Stevens, testified previously that the bill sponsored by Rep. Joe Barton (R-TX) “violates the core principals of tribes” to act independently as governments and factor appropriate tax measures as they see fit.

The current proposal introduced by California Senators Darrel Steinberg and Rod Wright, titled SB1463, aims to regulate poker for a two-year period, followed by the possibility of other casino games eventually being phased in. Key clauses of the measure include the likelihood of interstate agreements, as well as the ability to opt in or out of federal plans that may be enacted for online gambling.

With California in need of additional tax revenue, SB1463 is thought to have a better chance of passing than 2011 proposals. What remains to be seen is if California tribal interests will be included to their satisfaction.


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