12/14/09 – During the latest House Financial Services Committee hearings on legislative attempts to legalise online gambling in the United States, chairman Barney Franks challenged the opposition of the Morongo Band of Mission Indians to the proposal, remarking that they had a self-interested motive in trying to block federal moves.
Franks was referring to the attempt by the band earlier this year to get Californian poker clubs and other Indian bands on board for an attempt to get the state to give them exclusivity on intrastate legalised online poker.
His challenge was proved to be on the mark this weekend, only a short time after the hearing closed, when news broke in the LA Times of the latest Morongo initiative.
The newspaper reported that, with the state of California bracing for billions of dollars in budget shortfalls, a consortium that includes the Morongo and a group of casinos is offering Californian leaders a stake in a new pot of money if they allow Internet poker sites to set up business.
The consortium plans to take the idea to the state Legislature next month, the LA Times claims.
The newspaper goes on to discuss the importance of the Internet gambling market's revenue-earning capabilities and the legal constraints on it within the United States before quoting a Morongo spokesman, Patrick Dorinson. He said the consortium proposes that the state regulate such games in California to "ensure their legitimacy and protect players' privacy" and that some of the revenue be shared with the state.
The noted online gambling expert Professor I. Nelson Rose has advised the Commerce Casino, a card club involved with the Morongo, that California would be exempt from federal restrictions if the businesses were operated entirely within state lines and served only Californians.
Federal attorneys disagree, and the California Legislature would have to tread carefully. State law gives Indian tribes the exclusive right to operate electronic games of chance at present.
A breach could jeopardise the $361 million the state gets annually from its share of slot play, Cheryl Smith, president of the Stand Up For California! organisation said. Her group opposes gambling expansion without strict regulation.
State Senator Roderick Wright – a Democrat – chairs the Governmental Organization Committee, which reviews gambling legalization, and is planning hearings on the Morongo-Commerce Casino proposal in February 2010.
He said any legalization would have to permit Internet games without allowing expansion of electronic gambling in casinos that would compete with Indian slots.
And any bill would have to be supported by Indian tribes, said Wright, who benefited from $50 000 spent on television ads by the Morongo in support of his election last year.
"Some in the gambling industry say that legalizing Internet poker businesses in California would shift profits away from the 58 casinos operated by Indian tribes in the state — and thus reduce its income from such enterprises," the LA Times comments, quoting Robert Smith, chairman of the California Tribal Business Alliance who wrote to legislators recently.
"Card game gambling on the Internet would take business away from brick and mortar casinos," the Indian leader wrote, calling the Internet poker proposal "a Trojan horse for the wholesale expansion of non – Indian, off-reservation gambling."
There are lawmakers who view a legalised online poker environment as viable and making a useful contribution to over-stretched state coffers: "I think it is workable and a potential source of new revenue," said Democratic Party Senator Dean Florez, a member of Wright's committee. "How you structure it is the key."
State officials have no estimate for the potential windfall, but California Internet poker games could take in $1 billion each year, Rose said. If the state took the same 25 percent cut from poker that it takes from Indian-run slot machines, it could mean an extra $250 million for government coffers.
Wright said he expects that the state would get a flood of requests for permission to operate Internet card games from many of the 67 Indian tribes with state gambling compacts and California's 89 non-Indian card clubs, as well as from charitable groups.
"There are 300 to 400 entities who could apply and say we want a piece of the action," Wright said.
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