New California Online Poker Bill Introduced

As reported by CardPlayer.com:

California will have another chance to legalize real-money online poker this year with a new bill introduced Friday by two Golden State lawmakers.

Assemblyman Adam Gray and Assemblyman Reggie Jones-Sawyer put forth the state’s latest attempt at regulating the card games, AB 2863. The online poker-only legislation comes about six weeks after a separate online poker bill from Jones-Sawyer was pulled from a hearing agenda.

AB 2863 calls for race tracks in California to receive up to $60 million in revenue sharing per year from online poker operators, in exchange for the horse racing industry not being in the space. Under the proposal, only tribal casinos and card rooms could be online poker operators. Service providers, like a PokerStars, would also be allowed in thanks to partnerships with operators. …

Click here to read the full story

Court Gives Indian Tribe New Chance at CA Casino

CasinoIn what amounted to a tart reminder to California voters that they have limited authority over sovereign Indian tribes, a federal judge has ordered Gov. Jerry Brown’s administration to renew negotiations with North Fork Rancheria of Mono Indians officials over the tribe’s plan to build a casino in the Madera area off Highway 99, about 30 miles north of Fresno.

State voters last November rejected Proposition 48, which would have ratified Brown’s and the Legislature’s approval of the proposed $350 million, 2,000-slot machine casino. Opposing the ballot measure was largely supported by the state’s editorial pages on the grounds that the casino would be built on land purchased by North Fork Rancheria that’s more than 30 miles from tribal lands. The fear was this would set up a precedent for a sharp expansion of Indian casinos in heavily populated urban areas.

But the main groups funding the push to reject Proposition 48 were Indian tribes who didn’t want to see their market share reduced, not civic activists worried about gambling expansion. U.S. District Court Judge Anthony W. Ishii’s ruling appears to clear the way for such an expansion. This is from the Fresno Bee:

Ishii said federal law requires the governor to negotiate with the tribe and conclude compact negotiations within 60 days. If both sides can’t reach agreement, the judge will appoint a mediator. The state and the tribe will then have 60 days to present a final offer for the mediator’s selection.

The North Fork tribe argued that under federal Indian gambling law, the power rested in the hands of a federal judge to order the governor back to the table and, if necessary, select a mediator to choose between a state-proposed compact and one from the tribe. The complaint was filed after the governor’s office sent a letter to the tribe’s lawyers declining further negotiations.

“The state does not now contend that any of the (Department of the Interior) secretary’s determinations were incorrect, nor does it articulate a basis for its refusal to negotiate regarding the Madera parcel,” the judge said in requiring the governor to negotiate.

Construction of the North Fork casino would be paid for by Station Casinos, the Las Vegas company that would operate the facility and share profits with the tribe.

Senate president worries about rapid gambling expansion

The federal court’s ruling is likely to be treated with alarm by some state lawmakers. State Senate President pro Tem Kevin de Leon has a history of raising concerns about off-reservation casinos. In July 2013, he wrote a letter to Gov. Jerry Brown in reaction to approval of the North Fork project.

“I am deeply concerned by the current ad hoc process of approving off-reservation gaming projects which does not sufficiently protect state interests and our residents,” he declared.

But Brown has been working much more closely with Indian tribes to advance their casino projects, at least their non-controversial ones, than his predecessor, Arnold Schwarzenegger.

The Republican actor-turned-politician used his 2003 recall campaign as a platform to demand that Indian tribes share their gaming revenue with the state. Subsequent deals his administration cut with tribes were conditioned on such revenue sharing. But in 2011, the 9th U.S. Circuit Court of Appeals held up a trial court summary judgment ruling throwing out any such state requirements. The blistering opinion mocked the state of California’s official position that demanding a cut of tribal gaming revenue wasn’t really a tax.

“No amount of semantic sophistry can undermine the obvious: a non-negotiable, mandatory payment of 10 percent of net profits into the state treasury for unrestricted use yields public revenue, and is a ‘tax,’” the ruling held.

Brown’s administration chose not to appeal the ruling to the U.S. Supreme Court. That suggests the governor, a Yale Law School graduate, expected the North Fork ruling but didn’t want to resume negotiations with the tribe until ordered to by a federal judge so as to not seem to be defying voters’ rejection of Proposition 48.

Originally published by CalWatchdog.com

The Juiciest Job in Sacramento

hustler_casino71Around the Capitol they’re known as “juice committees” – those that oversee lucrative industries, allowing politicians to foster relationships they can squeeze for campaign cash.

These panels preside over business interests that fight obscure industry battles before the Legislature; think of lawyers vs. insurance companies, doctors vs. physical therapists, or card rooms vs. Indian casinos.

“These are non-visible issues that are of high interest to very wealthy groups,” said Stacy Gordon Fisher, a political scientist who studied Sacramento’s juice committees as a professor at University of Nevada, Reno.

So those groups spend what it takes to get noticed, hiring lobbyists and pouring money into political campaigns.

One of the juiciest committees is responsible for regulating booze, cigarettes and gambling. It was called the “committee on public morals” back in the 1800s but now goes by a more innocuous name: the committee on governmental organization.

G.O., as the committee is known, is one of the Legislature’s biggest, with a total of 34 members in the Senate and Assembly. Its decisions impact profits for California’s gambling factions — card rooms, racetracks and Indian tribes that run casinos. And now, those businesses are bankrolling the political ambitions of the committee’s chairman, Sen. Isadore Hall (D-Compton).

Hall landed in the California Senate in December, following a special election in which just 7 percent of those registered turned out to vote. It was the latest in a long string of political victories for Hall, who advanced from the school board in Compton to its city council to the state Assembly. He represents one of California’s poorer Senate districts, where about 20 percent of people live in poverty.

Hall had served less than three months in the state Senate when he announced plans to run for the Congressional seat being vacated by Rep. Janice Hahn (D-San Pedro), who endorsed him. Through June, he’s raised twice as much money as his closest opponent, attorney Nanette Barragan.

As Hall works to build a campaign war chest for what’s likely to be a competitive election next year, about 8 percent of his donors have come from the district he seeks to represent.

Instead, the bulk of them reflect relationships he’s built as G.O. chairman. More than one-third of the $369,000 Hall raised in the first six months of the year came from people tied to a gambling business. Donors include:

  • Former Assembly speakers Fabian Núñez and Willie Brown, who have worked as consultants to casino magnate Sheldon Adelson in his fight against online poker – an issue that has come before Hall’s committee for several years.
  • Pornographer Larry Flynt, who owns the Hustler Casino in Hall’s Senate district and pushed for a bill this year that would change a rule about casino ownership.
  •  Sacramento lobbyists David Quintana and Steve Cruz, who represent casino-owning Indian tribes, and Robyn Black, who represents Flynt and horse-racing interests. They routinely lobby bills in Hall’s committee and are forbidden by state law from contributing to a legislator’s state-level campaign. The law does not apply, however, to federal races.
  • Las Vegas casino executives Frank and Lorenzo Fertitta, whose company worked with a California tribe to plan a casino near Fresno with the help of a bill carried by Hall.
  • Seven Indian tribes that run casinos, as well as owners of numerous card rooms and horse racing tracks.

“They want to have access to him to have their position heard,” said Gordon Fisher, the political scientist who wrote a book called “Campaign Contributions and Legislative Voting.”

“Over the long term they give him money, he hears them out. There’s not necessarily a quid pro quo, but a relationship is built.”

Asked about his fundraising, Hall said he didn’t want to talk about it while inside the state Capitol. And then he did not respond to follow-up inquiries.

Card room owners are supporting Hall’s congressional campaign because he’s “a champion for the industry,” whose support goes back to his experience in local government, said Jarhett Blonien, a lobbyist who represents several card rooms.

“It’s not so much that they’re looking for favors, it’s that Isadore is their friend and they want to help him out,” Blonien said.

Black, the horse-racing lobbyist who gave $500 to Hall’s campaign, said her donation is unrelated to the business she has before him. She pointed out that she’s donated to several congressional campaigns across party lines.

“There are members that you get to know because you worked with them here in Sacramento and you just know they’re the kind of person you want representing our state,” Black said.

The message was the same from Quintana, the lobbyist for several casino-owning tribes, who gave $2,000 to Hall’s campaign: “I’ve seen him operate in Sacramento… and I think he would make a great congressman.”

To be clear: donors don’t necessarily get their way. Quintana, for example, lobbied against a bill Hall carried this year to expand the ability for sports teams to host live raffles at their games. The bill passed through the Legislature and is awaiting action from Gov. Jerry Brown.

Which gets back to the allure of a juice committee: Often, the money keeps flowing no matter which way politicians vote.

“It’s not like he always has to represent their interests for this to be a good investment,” Gordon Fisher said.

“Every once in awhile he might be a critical vote on a piece of legislation that’s important to them.”

Originally published by CalMatters.org

4 Online Poker Bills Square Off in CA Legislature

This year could bring gambling to Internet users in California. For years, online poker has been legal in the United States, but not in the Golden State. Now, amidst a host of competing interests, a spate of new bills has emerged in the hope of changing that.

Four pieces of legislation have been put into play: AB9AB167, and two identical bills, AB431 and SB278. Of these, AB9 and AB167 have attracted the most attention.

Lawmakers have hesitated to act boldly, unsure which constituencies should be treated most favorably. But after so much wrangling, some kind of consensus has seemed inevitable: as analysts have agreed, the money in online gambling is too big to ignore.

Tough choices

The market for Internet poker has grown large enough that its would-be masters haven’t hesitated to push and pull for influence in Sacramento. As U-T San Diego reported, legislators still disagree strongly, however, about how to choose among “card clubs, Indian tribes, race tracks and out-of-state gaming companies,” all of which want to play a leading role:

“Lawmakers and these groups have failed for nearly a decade to craft rules for who should control state-regulated poker sites and how much they should pay to do so. During this time, thousands of California poker players have migrated to playing online through unauthorized, often untrustworthy sites based overseas, letting industry and tax money slip away.”

Much of the uncertainty in the Legislature revolved around the way the law should treat California’s Indian tribes, some of which have proven especially eager to get in on the action. That question, in turn, has long been tangled up with controversies over federal policy.

Attention has focused around America’s biggest online poker website, an out-of-state business called Pokerstars. Because it has been working with California’s Morongo Band of Mission Indians and San Manuel Band of Mission Indians, Pokerstars has a vested interest in taking a robust share of the online poker business under a new regulatory regime.

But as the Sacramento Business Journal noted, a rival group of Indian interests, including the Pechanga Band of Luiseno Indians and the Agua Caliente Band of Cahuilla Indians, has accused Pokerstars of raking in illegal profits between 2006 and 2011, when Congress briefly had outlawed online poker as a matter of federal law.

Rival tribes, rival bills

As a result, divisions on legislation have gathered around the battle lines set by the tribes. Pechanga and Agua Caliente have sided with AB9 — authored by Assemblyman Mike Gatto, D-Glendale — because it contains a so-called “bad actor” clause, barring Pokerstars from entering California’s online gambling market.

Morongo and San Manuel, meanwhile, have rallied around AB167, introduced by Assemblyman Reggie Jones-Sawyer, D-Los Angeles. In lieu of a bad actor clause, that bill would punt to the state Department of Justice on which companies could and couldn’t participate.

In an effort to break the impasse, yet another alternative was recently introduced by State Sen. Isadore Hall, D-South Bay, and Assemblyman Adam Gray, D-Merced. Their identical bills are AB 431 and SB 278.

In a statement, the two allies played up their potential to reach a consensus through their legislative authority:

“Hall and Gray serve as Chairmen of each legislative house’s policy committee that oversees gaming within the state and are best positioned to lead a productive dialogue on an iPoker regulatory framework. By working together, their legislation seeks to build consensus on a public policy matter that has eluded California for years.”

Persistent challenges

Despite the substantial market, the lack of movement on online gambling has been attributed to several stubborn factors. As Gatto explained at the recent iGaming Legislative Symposium, legislators have proven risk-averse, and Californians haven’t exactly pushed them to action:

“If we pass a great bill, this isn’t going to make my career in terms of the voting public, and if we don’t pass a bill it’s not going to break anyone’s career. If you went to the average person on the street, I don’t think they’d even have an opinion on this and they would just want to know am I going to see some tax dollars go to my school and my neighborhood.”

Last year, Gatto noted, no more than five constituent emails out of 57,263 sent to him concerned online poker.

Originally published on CalWatchdog.com

CA to legalize online poker?

As reported by the San Diego Union-Tribune:

 — Will 2015 be the year California legalizes online poker?

Two lawmakers at the state Capitol are betting big that it will be.

But their competing bills, introduced early this session, show there’s still strong disagreement about which industry players should control and benefit from the popular, and lucrative, business.

Candidates include card clubs, Indian tribes, race tracks and out-of-state gaming companies.

Lawmakers and these groups have failed for nearly a decade to craft rules … 

Full Story Here