A state Senate hearing last month sought to bring sanity to the discussions about legalizing internet poker in California. The hearing brought out the pros and the cons, and a divided stance by California gaming tribes was the most interesting moment.

Nine California gaming tribes last month sent a letter to a Senate committee saying they oppose a proposal for intrastate internet poker.

The Senate Governmental Organization Committee has begun hearings on the proposal, which is sponsored by the Morongo Band of Mission Indians and some card clubs, including the Lucky Derby and Hollywood Park. So far no bill has actually been filed.

The nine tribes cited possible threats to the tribal state gaming compacts that guarantee the exclusivity of gaming for tribes. Mark Macarro, chairman of the Pechanga Band of Luiseno Indians, one of the nine, commented, "We simply do not agree with the consequences of authorizing intrastate internet poker." He added that his tribe might withhold gaming payments to the state if the proposal becomes law.

Morongo's proposal would allow internet betting on poker through a network that would be operated by the tribes and card clubs. They claim that there are hundreds of millions of dollars changing hands every year from as many as a million Californians.

Robert Martin, chairman of the Morongo Band, told senators, "We feel the games should be controlled by the tribes and the state-and taxed."

Senator Roderick Wright, who chairs the committee, said that internet gaming is a reality. "This train is running and picking up steam," he said, and the state isn't collecting any taxes from it.

He also threw out another metaphor: "At this time of day, I'm going to guess 30,000 to 40,000 people are playing in California," he said. "It's not as though we're sitting here making a decision whether or not people are going to play internet poker. That ship's sailed."

One study estimates that online poker could generate $53.6 million a year in state taxes. However, the same study warns that adopting such a law could also threaten the state's exclusivity agreement with gaming tribes.

Drew Soderborg, fiscal and policy analyst with the Legislative Analyst Office, agrees with that warning. "There could be legal challenges if online poker were approved. If such challenges were upheld, the state could lose hundreds of millions of dollars in revenue annually," he said.

Morongo attorney George Forman argues that the compacts guarantee exclusivity of "gaming devices," and that laptop computers are not gaming devices. He also contends that because poker players compete against each other, and not against the house, that the game is not subject to this rule. "Tribes have no exclusivity with respect to poker," he said.

Frank Catania, a former director of New Jersey's Division of Gaming Enforcement and one of the foremost authorities in internet gambling, believes California would benefit from the legalization of online poker.

"A well-regulated online gaming industry results in private investment in the technology sector and creates many high-skill, high-paying jobs," he said. "Regulation also generates many potential levels of taxation-business, gaming, payroll, etc.-which can be used to fund social programs, particularly those related to gaming."

By GGB Staff

Staff writers for Global Gaming Business magazine. Las Vegas, Nevada.