Update: Different Opinions on California Online Poker Legalization

Senate Governmental Organization Committee debates on two rival bills It has been reported this week that the California Senate Governmental Organization Committee debated on two rival online poker legalization bills. One of them, Sen. Lou Correa's SB40 bill once again received support from the California Online Poker Association - a coalition of Indian tribes and land card rooms, whereas the Agua Caliente Band of Cahuilla Indians assessed that the project should not be rushed. According to the bill sponsor himself, California needs to act quickly or it will be beaten to the punch. “Time is not on our side,” Correa assessed recently, adding that the benefit of the measure is that it would provide the state with $1.4 billion in revenue over 10 years and create 1,300 new jobs. “I suggest we keep California as a can-do state, and move forward this year,” he said, adding: “As a state, we cannot continue to make painful cutbacks in education law enforcement and healthcare and social services, not when there are more than $1.4 billion in new state revenues at stake and as well as more than 1,300 new California jobs through SB 40.” Another, federal online gambling supporter, Jim Wise reminded the committee that Nevada Governor Brian Sandoval signed a new law last month requiring his state to adopt regulations for Internet gambling by January. “This is further evidence that Congress is ready to move,” Wise underlined. Less optimistic is Jeff Grubbe of the Agua Caliente Band of Cahuilla Indians, who recommended: “We foresee no successful action on this front in either 2011 or 2012. We believe you have the time to carefully construct a proposal. We urge you to take the time to get it right.” He also specified that the Band will oppose both SB40 and SB45 by Senator Rod Wright, until six provisions are met. “Number one: it must be limited to online poker. Going beyond that would threaten exclusivity provisions of the state,” he stated the Band's stand, adding that “even then, it might trigger a challenge that could have serious implications for the state's general fund and the $346 million the state gets annually from compact tribes.” Secondly, the tribe seeks that the law is open to all entities – unlike in Correa's proposal which seems to favor the COPA coalition - “No one should be allowed to have an artificial monopoly,” Grubbe said, “either through a hub limit or licensing fees.” Then, the Agua Caliente wants offshore or international entities to be allowed to enter the state only if they partner with state-licensed online gambling providers. And finally, they want the revenues required of Internet poker not to exceed levels needed to set up a credible, safe alternative to illegal offshore gaming sites, specifying that the bills must clearly indicate the intention of the state to opt out of any federal Internet gaming legislation. SB40 has another opponent, the California Tribal Business Alliance, whose vice-chairwoman Leslie Lohse stated: “It is still crafted to benefit a select group.” She also criticizes the expensive licensing fees envisaged, which are lower for the first operators to apply: “Those who spend $5 million for a licence within 90 days after the bill takes effect could pay $50 million to the state against future revenues. After 90 days, the pre-pay fee rises to $250 million. “Tribes don't have that kind of money. We believe it will do irreparable harm to our economies. It would undermine our tribal agreements.” She also pointed out the 15-percent increase experienced by land gambling operations Black Friday. “Internet gaming is like the rush for gold. Are we so far removed we forget what the gold rush did for our people?” As for Correa's presentation before the committee, he put a particular stress on the main points of his bill: “•The need for new revenue in California this year, in order to prevent triggers in the state budget that will require further, massive cuts to education. •The need to protect consumers from fraud and theft which he claimed currently go unchecked at illegal, offshore online gambling Web sites. •The need to pass online poker legislation before dangerous federal proposals are able to pass Congress, stripping California of potential jobs and revenue.” In conclusion, he asserted: “What our state needs right now is revenue. SB 40 will allow California to generate $250 million this fiscal year, money that will help us meet the revenues projected in this (year's) budget but not identified. SB 40 will help avoid the triggers that will result in deeper cuts to education and other public services.”
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