California Stakeholders Reach Shock Online Poker Compromise

February 12th, 2016 | by Kaycee James

California online poker offers $50 million to racetracks

Assemblyman Mike Gatto believes that online poker has a 10 percent chance of passing, despite the huge news that the horseracing industry will be paid off. (Image: catherinefalkorganiztion.org)

California’s chances of legalizing online poker this year are spotty at best, according to experts, thanks to the inability of its various stakeholders to remotely agree on how a future market might take shape.

Two coalitions, one allied to PokerStars, and one not allied to PokerStars, are at furious loggerheads about the morality and legality of letting a so-called bad actor (PokerStars) into the market.

The only thing that terrifies the anti-PokerStars league more than PokerStars, perhaps, is the idea that California’s racetracks might one day also be involved too.

They hate this. The tracks aren’t supposed to participate in anything other than horseracing, they argue. Allowing the racetracks to participate would be tantamount to an expansion of gambling that violates tribal exclusivity, they argue.

In this climate of bleak disharmony and rabid self-interest, there is no way that any online poker bill could get the two-thirds majority it needs in the legislature to pass into law.

Freeze out the racetracks, for example, and you also freeze out legislators who represent the communities that rely on the horseracing industry for jobs.

News Leaked Inadvertently

But while the various tribal operators and card clubs and racetracks have spent the last two years squabbling ad nauseum about who should have a stake in what and who shouldn’t, it seems that a very recent under-the-radar compromise has been reached without anyone really noticing.

The racetracks are getting paid off, to the tune of $50 million a year.

This is an amendment to Assemblyman Adam Hall’s online poker bill (AB 431), which, if passed, will see the ailing horseracing industry compensated, hugely, for its non-participation in a future online poker market.

Yes, that’s fiddy-million $$$. Per year.

The amendment was not announced officially, nor was published, it was leaked in two identical letters written to Hall by tribal operators who were doing what they do best: complaining about stuff.

The Morongo Band and San Manuel Band of Mission Indians, who together form the pro-PokerStars coalition, were specifically complaining about Hall’s recent push to regulate daily fantasy sports, which appears to be sailing through the legislature. Unlike online poker.

The Ten-Percenters

Even more specifically, they were complaining about the fact that they would have to contribute this extraordinary amount of money to the horseracing industry, while DFS companies, as the bill stands, apparently wouldn’t.

Perhaps, finally, the tribal operators have found some common ground: a mutual hatred of the Adam Hall’s DFS bill.

Could this be the impetus needed to push online poker through in 2016?

Alas, Assemblyman Mike Gatto thinks no.

Gatto is a man fond of attributing percentages to California’s chances of legalizing online poker in any given year. He’s pretty much a California online poker bill percentage calculator.

When he introduced his (now defunct) online poker bill at the end of 2014, he gave California a 50 percent chance of legalizing online poker. In an interview with PokerNews this week, he has revised those odds to 10 percent.

That’s pretty much like filling up a gutshot on the river, then; a four-outer.

As we all know, it shouldn’t happen, but as we also know, somehow, and sometimes, it just does.