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Tribal Business Fighting California Poker Proposal

2/6/10 - The conferences and lobbying among tribal gambling groups - some for and others against legalising poker in California to close state budgetary gaps (see previous InfoPowa reports) - has triggered some opposition from the California Tribal Business Alliance, which this week released the results of an independent study claiming that potential revenues may have been overstated.
 
The study was conducted by Mike Genest, the former Director of the California Department of Finance, who in a seven-page letter estimates the revenue that California could derive from a proposal that is currently being discussed in the legislature to license and tax intrastate, internet poker. 

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The essence of Genest's letter is in the following excerpt: "The proposal would result in an annual General Fund revenue reduction of $365 million, partially offset by an annual increase in revenue of up to $50 million and by an unknown, but probably not substantial increase in personal income tax collections."
 
Playing off Genest's opinion, CTBA chairwoman Leslie Lohse released a statement saying: "The proponents of this proposal to legalise internet poker in California are touting it as a major solution to our state's budget crisis.
 
"It was important to bring in a neutral third party to analyse the viability of this proposal as a revenue resource. I think the results clearly show the state needs to research some more feasible solutions."
 
Alison Harvey, executive director of the Association added that the monopoly poker initiative launched earlier by the Morongo band of Indians and certain card room companies is also is likely to siphon $365 million a year out of the state’s general fund if tribes operating Indian casinos under 2004 and 2004 gaming compacts invoke the exclusivity clause.
 
“And that’s in a down economy,’’ Harvey said.
 
Patrick Dornison, a spokesman for the Morongo, responded by calling the report a “politically motivated” document, saying it was “cobbled together at the last minute with the intention of negatively influencing the Senate hearing next week on Internet poker.’’
 
Dorison took exception to the California Tribal Business Alliance stance. It assumes that people will continue to play illegal, offshore sites, thereby, decreasing potential revenue to California, he said.
 
“Perhaps the (alliance) should keep up on current events,’’ he said, noting a crackdown by Mastercard and VISA on the use of their cards on offshore sites would leave poker players in the United States unable to play.
 
“This goes to what we have said all along that California needs a regulated intrastate game that will offer consumers protection from unscrupulous operators and maximize revenue to the state,’’ Dorinson said.
 
The California Tribal Business Alliance projected, as part of the study, that the total gross gambling yield attributed to Internet poker played anywhere in the world from terminals in California in 2011 will be $536 million.
 
“If all players moved to the proposed new, single-licensed entity’s site, and continued to play at the same level, a 10-percent fee would generate $53.6 million,” Genest’s report said.
 
In August of 2009, a plan was proposed to legalise and tax intrastate poker in California, but no legislator would author the legislation. The proposal has returned and the Senate Governmental Organization Committee will take up the issue of internet poker next week on February 9.
 
Genest's report is available online at www.caltba.org
 
The California Tribal Business Alliance consists of California Indian tribes interested in developing partnerships and coalitions with like-minded governments and with business entities in California, with the intent to build productive alliances based on mutual respect and cooperation. 

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The CTBA members are the Jackson Rancheria of Miwuk Indians, the Lytton Band of Pomo Indians, Pala Band of Mission Indians, the Paskenta Band of Nomlaki Indians, the United Auburn Indian Community, and the Viejas Band of Kumeyaay Indians.



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