Record Tribal Gaming Revenue Could Hinder California iGaming

March 5th, 2016 | by Kaycee James
record Indian gaming revenue.

Record revenue for Indian gaming entities shows why California is struggling to regulate online poker. (Image: politifact.com)

Tribal gaming revenue hit record levels in 2014 which may help to explain why California’s online poker bills are having a hard time getting passed.

According to the annual report published by Casino City, US Indian casinos banked $28.9 billion in 2014 which is an increase of just over 1.9 percent compared to 2013.

The previous report, which was released in March 2015 and covered the operating period for 2013, outlined the fourth consecutive increase in tribal gaming revenue to $28.3 billion.

This year that trend continued and, according to the report’s author Alan Meister, the growth of Indian gaming outpaced commercial casino growth by 2 percent.

Tribal Gaming Booming in California

Leading the way with the largest contribution to the national total was California’s 72 Indian casinos. Thanks to a stronger economy in 2014 than in 2013, the state’s casinos generated 4.4 percent more revenue for a total haul worth $7.3 billion.

While the rate of growth on a national scale is certainly impressive, the continued strengthen of Indian gaming in California will be of most interest to those in the state hanging their hopes on the latest iGaming bill.

Various bills have been introduced in California since 2008, but only one has so far made it through a committee vote.

AB 431, which was submitted by Assemblyman Adam Gray, received a positive response from members of the Assembly Governmental Organizations Committee and the Assembly Appropriations Committee.

However, the bill lacked any real substances and has since fallen by the wayside. In fact, one of the main sticking points with this bill and those that have gone before it is the issue of bad actors, namely PokerStars, entering the market.

Tribal Gaming a Crucial Part of iGaming Battle

In 2015, the Pechanga Band of Luiseno Indians led a coalition of opposition against so-called bad actors (poker sites that operated in the US post-UIGEA). Unlike New Jersey which recently licensed PokerStars, certain tribal gaming entities want to bar these sites from becoming part of a newly regulated market.

For those on the other side of the fence this has become a major sticking point and, with Indian gaming being so financially powerful, it’s easy to see why online poker regulation has continually stalled in California.

At present, there is fresh hope for Californians in the form of AB 2863 which was recently submitted by Assemblyman Adam Gray and Assemblyman Reggie Jones-Sawyer. While the merits of this bill are yet to be debated, it does propose a system that would only allow tribal casinos and card rooms to be licensed operators.

Under this system major poker brands would need to partner with a tribal casino in order to be granted an operating license. However, AB 2863 also fails to ban “bad actors,” which would mean sites such as PokerStars could enter the market.

The fate of this bill will be decided in the coming weeks, but what’s clear from the latest Indian casino revenue report is that very little will happen unless every tribal gaming entity agrees to it.

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