Thursday June 25,2015 : CALIFORNIA HEARING – POSITIVE BUT FAMILIAR
State Government Organization Committee hears a wide range of testimony in almost five hour afternoon session.
Yesterday's California Assembly Government Organization Committee hearings on legalised intrastate online poker is perhaps best summed up as generally positive but familiar in content to that which has gone before.
Both supporters and detractors made now well-known submissions, and experts provided factual information on the pros and cons of regulation and licensing and what other states are doing in this field.
But the positions taken by several interested parties – chiefly in the tribal sector – appeared to be unchanged, with some tribes, led by the Pechanga, Agua Caliente and the Viejas, vehemently opposed to the involvement of the racetracks in any legalised regime, and continued insistence on the "bad actor" clauses with which they hope to exclude major companies like Pokerstars.
On the other side of the line, there are those who aver that the state regulator should be the non-politicised body that decides who should or should not be licensed, and not lawmakers voting for blanket "bad actor" clauses in state legalization.
Looking for nuggets of relatively new information, the assessed value of the Californian markets proved interesting.
Anita Lee, Senior Fiscal & Policy Analyst, Legislative Analyst’s Office estimated that the unlicensed online poker market in California is around $300 to $400 million a year, but warned that if the state was too greedy on the tax and fees front operators may find it difficult to get players to switch to their licensed sites.
Her estimates were not too far off those off independent researcher Chris Krafcik, who assessed revenues at $217 million in year one, rising steadily to $366 million by year four. He estimates the state's take on those numbers would be a maximum of $18 million in the first year and a maximum of $28 million in the fourth year.
Geolocation expert Anna Sainsbury of GeoComply once again delivered an impressive presentation on the capabilities of geo-location technology, hopefully enlightening further politicians who sometimes appear to have difficulty grasping even the basics of modern technologies.
Several witnesses reiterated the findings of both research outfits and land casino managers that online gambling does not cannibalise brick and mortar revenues but complements their operations by bringing fresh interest and demographics to them. It's a point that cannot be made enough, with some politicians apparently unwilling to accept the fact.
Richard Schuetz of the California Gambling Control Commission discounted fears that minors can easily gain access and bet on internet gambling websites, and made the startling comments that his Commission does not have its own testing laboratory, and that it is both underfunded and understaffed. That said, he expressed confidence in the Commission’s ability to regulate.
The assistant bureau chief of the Bureau of Gambling Control in the Department of Justice, Stacey Luna, gave an insight into the popularity of the California market by revealing that 2,400 cardroom-related applications were under consideration. She made the point that the organisation was in need of additional funding, but that it was capable of impartially addressing suitability or licensing issues such as those triggered by the "bad actor" arguments that have permeated the legalization debate.
Much time was spent by parties arguing for and against bad actor clauses, with one tribal executive noting accurately that the gulf between the different points of view and commercial interests remains as wide as ever.
The racetracks again appealed for a non-exclusive, level playing field in any online poker legalization initiative in the state and opposed the tribal moves for their exclusion from any online poker market that might emerge.
Exclusion would be a disaster for the racetrack industry, they submitted.
Poker Players Alliance executive director John Pappas probably summed up the popular public view when he suggested that the various interested parties were arguing over slices of the pie when the dish had yet to be baked.
He appealed for consumer safety to be the central concern of the legalization debate. There could be no public policy justification for the current situation, in which attempts to make online poker safe through regulation and licensing in California had failed year after year, he said.