California Intrastate I-Poker Study Bill up for Public Comment

21 February 2008

California State Assembly member Lloyd Levine, D-Van Nuys, on Feb. 15 introduced legislation (AB 2026) that would order a study on the Unlawful Internet Gambling Enforcement Act to find out whether a California-only online poker scheme could work.

According to the proposal, the results of the study, which would be conducted jointly by the California Gambling Control Commission and the California Department of Justice, would have to be reported to the Assembly by June 30, 2009.

The study will look for how much room the state actually has to operate an online poker scheme within the confines of the UIGEA, and how to guarantee that players are of legal age and are located in the state, among other things, Levine told IGN.

"We have preliminary ideas, but we don't want to operate on a hunch," he said.

The bill is sponsored by a California-based grassroots legislative group called the Poker Players of America (PPOA) that was formed after the UIGEA was passed.

It is an organization that was "rightly upset" about the bill, Levine said.

Levine added that the PPOA has provided technical expertise and support for the bill by bringing about awareness of the issue.

Levine will not be involved in setting up the in-state online poker system; he is simply trying to make it legal for those who want to operate a business, he said.

But he doesn't yet know who would fall into that category.

"It would have to be a regulated entity," Levine said.

And since poker is considered a Class 2 game in California, which means players play against each other instead of the house, Indian tribes would be able to operate these state-only online poker sites without renegotiating their compacts with the governor.

While the Nevada study found that most residents weren't all that interested in regulating online gambling in the state, Levine is confident that the results would be drastically different in California.

Meanwhile, Greenberg Traurig Attorney Patrick O'Brien believes Levine's bill has a shot to survive a vote in the Assembly.

"I think this legislation has a very good chance of passing and if it does, I think the study will show that intrastate poker in California would be feasible," O'Brien told IGN.

"The question is whether there will be enough support for it to counter the opposition which can be expected from the Christian Conservatives, the tribes, the race tracks, the card rooms and maybe even the lottery interests. At the end of day, it will be about money and what's in it for the state. If the state does legalize intrastate Internet poker, it can be expected to take a large share of the rake and the operator(s) will earn the hefty profits which the offshore operators now enjoy."

On the other hand, Sacramento-based gaming attorney Martin Owens sees some potential problems facing inexperienced operators interested in getting into the proposed sector.

"California is one of about five states that still authorize independent licensed card rooms," Owens said.

"They had been struggling before Indian gaming came, and aren't doing much better now. Technically, licensed Internet poker rooms could be a godsend to them -- but that's only if they're willing to adapt to the technology. It's been my experience that people involved in brick-and-mortar gambling enterprises don't always do well when they try to take it online. Many of the skill sets just don't transfer, and that can be a bitter thing for somebody who's put in years and years."

However, Owens sees the potential for other states if California is successful in its endeavor.

"I do think that one state successfully authorizing Internet poker within its borders will start a domino effect, exactly as the New Hampshire state lottery did back in the 1960s," Owens said. "And like the lotteries, if the wager or bet is legal at point A and legal at point B, then it should be legal to bet between points A & B. This is the foundation of Powerball and MegaMillions. The appetite for poker cannot be doubted, nor its potential profit. The avalanche is ready; all we need is the right stone to fall."

Levine said he has played poker, but he wouldn't call himself a poker player. The reason he is behind this legislation is because it is a hobby that a lot of people have and he wouldn't want anyone to tell him that he couldn't participate in one of his hobbies, he said.

The bill now sits in a 30-day public comment period, as required by state law. It will not be eligible to be heard by the Assembly until March 20.

Emily Swoboda is the senior staff writer at IGamingNews. She lives in St. Louis, Mo.