California tribes continue to dispute Internet poker bill

Federally-recognised tribes in California and licensed cardrooms would be able to apply for online poker licenses. Such licenses would cost USD5 million each while those that are handed a licence would be taxed at 5% of gross gaming revenue.

Rational Group, operating company of online poker brand PokerStars, and its online gaming partners in the state have hit out at the clause as it would exclude PokerStars from the licensing process. In California, PokerStars is currently in partnership with the Morongo Band of Mission Indians, as well as the Commerce Club, Hawaiian Gardens Casino and Bicycle Casino card rooms. The Morongo band was not included in last week's letter, PokerStars operated in the US under an uncertain area of legality until April 2011 when the Justice Department brought criminal charges against the firm’s executives.

Despite not having admitted any wrongdoing, Pokerstars agreed to pay US$731 million to settle a lawsuit. Money was paid out into the accounts of its own US players and was also used to cover debts of its rival online poker brand, Full Tilt Poker.

Keith Sharp, an attorney who represents the three cardrooms, said: “We were hopeful when we heard discussions were going on that we would see something come out that advanced the ball, but it didn't happen. The language didn't substantively change. It's still the PokerStars-centric bad actor language, and we're disappointed they apparently don't want to engage in meaningful dialogue on that issue. They just want to keep PokerStars out, and that's clear.”

“Our mantra is to leave it to the regulators and let them decide. Don't legislate anyone out of the market. If you remove that date, a lot of people get knocked out. If you want to try to talk about bad actors, a lot of people need to look in the mirror. We're certainly not going to budge. We just think it's so obvious the reason that language is there is centered on PokerStars.”

“We're hoping we can have dialogue with the tribes about a way to address this and perhaps convince them, as in New Jersey, to allow regulators to do the job. Putting any artificial restrictions on competition is not good for the marketplace. When you start trying to manipulate the market to act a certain way, that creates difficulties and you don't optimise the marketplace.”

“Don't try to legislatively pick winners and losers, regardless of if every tribe other than Morongo signs that letter. Do what's best for California, for a robust market where everyone has an equal opportunity to participate, not artificial and anti-competitive provisions,” he concluded.