California

Hardline ‘Cali 7’ Tribes Pen Letter Opposing Jones-Sawyer California Online Poker Bill

A hardline coalition of California tribal nations opposed to online-poker legislation that would grant anything other than perpetual and virtual exclusivity to the state’s tribal nations has authored a letter protesting a compromise online-poker legalization bill, recently introduced in California by Rep. Reginald Jones-Sawyer.

CaliforniaThe Jones-Sawyer bill, AB 167, was notable in its openness regarding entities deemed potentially eligible for licensing by the state’s gaming regulators, should online poker be approved.  Those entities include California’s horse tracks and other pari-mutuel facilities, along with companies targeted by so-called “bad actor” legislation in other versions of California’s various online-poker regulatory measures, including a different bill introduced by Jones-Sawyer himself last year.  That bill, as with all other California online-poker proposals to date, failed to advance from committee in the face of widespread opposition over its favoritism to select and powerful tribal concerns.

Six of the “Cali 7” tribes were listed as signatories to a letter sent to Jones-Sawyer, which was published in its entirety on Wednesday evening at OnlinePokerReport.  The six tribes signing the letter were:

Agua Caliente Band of Cahuilla Indians
Barona Band of Mission Indians
Lytton Band of Pomo Indians
Pechanga Band of Luiseño Indians
Viejas Band of Kumeyaay Indians
Yocha Dehe Wintun Nation

The seventh tribe considered to be a part of the politically militant group, the Sycuan Band of the Kumeyaay Nation, was separately reported by OPR to have written an independent letter to Rep. Jones-Sawyer, reiterating the same stance.

The “Cali 7” tribal nations were previously identified by gaming-beat writer Dave Palermo in a separate piece earlier this week, also at OPR, though not collectively given a referencing handle.  The seven tribes were the core driving force behind prior legislation introduced by Rep. Jones-Sawyer, CA State Senator Roderick Wright, and both prior and current bills introduced by Rep. Mike Gatto.

Those bills, all drafted with the direct input and backing of some or all of the same group of tribes, invariably included the controversial bad-actor language and attempted to block the state’s pari-mutuel facilities from licensing consideration.  The most recent Gatto bill, AB 9, is the one currently backed by the Cali 7 coalition.

A look inside the text of the letter as reproduced by OPR shows the Cali 7 willing to misconstrue history in order to further their objectives.  The misconstructions include citing various California voter initiatives without mention of constitutional issues which subsequently voided some of those votes, and a willful conflating of possible California online-poker market entrant PokerStars with the nine-digit frauds conducted by two other US-facing online-poker companies, Full Tilt and Absolute Poker.  The intent of the conflation is a blatant attempt to smear PokerStars reputation by inferring consumer fraud by the online giant where none has ever existed, or even been claimed.

Here’s an excerpt from the tribes’ letter to Rep. Jones-Sawyer, illustrating the smear tactics at work:

… Additionally, California has an important public policy interest in ensuring that gaming licenses are not issued to persons or entities that have engaged in any form of unlawful or unauthorized gaming. It is crucial that any internet poker bill protect this public policy interest in order to instill public trust and confidence in the integrity, fairness, and legitimacy of state-sanctioned internet poker. This public trust was undermined by unscrupulous entities and brands that, according to a 2011 indictment by the United States Department of Justice, accepted bets in violation of U.S. laws and defrauded poker players of over $300 million.

Just a few years ago, three major online poker operators – Absolute Poker, Full Tilt Poker, and PokerStars – had their websites seized and shut down by the FBI on allegations that, from at least November 2006 through March 2011, those operators violated the Unlawful Internet Gambling Enforcement Act (UIGEA) and the Illegal Gambling Business Act. Each of those firms continued to grow their companies and their brands by unlawfully accepting bets from U.S. players after December 31, 2006, the effective date of the UIGEA. Criminal indictments were handed down against certain owners and senior officers. In the end, these presumed violators negotiated a settlement with the U.S. Government for $731 million, rather than risk the looming possibility of criminal convictions – which certainly would have prevented those firms from obtaining gaming licenses in U.S. jurisdictions. …

The letter goes on from there to discuss neighboring state Nevada’s inclusion of a similar bad-actor code, which again was a protectionist measure jammed into the process by Nevada’s casino industry.

However, as one can see from the above, the tribes intentionally mislead by failing to mention that PokerStars was not involved at all in the alleged $300 million fraud against players, which was perpetrated by the owners and operators of the other two “Black Friday” companies, Full Tilt and Absolute Poker (which also included UltimateBet / UB.com).

In fact, the larger share of that defrauded money was actually returned to defrauded players by PokerStars through its acquisition of Full Tilt, as part of its 2012 settlement with the US Department of Justice.  PokerStars admitted no wrongdoing in its settlement, and a late-2011 opinion by US Attorney General Eric Holder clarified that the core activity offered by PokerStars — online poker — was legal to play by US citizens under federal law.

The ongoing hardline tactics of the Cali 7 tribes continues unabated despite widespread evidence that the coalition’s stance is a losing one — only through compromise with other and more diverse gaming interests does any online-poker regulatory bill stand a chance of passage.  The coalition’s extreme tactics may even indicate that the various bills injected into the state’s legislative process in recent years are nothing more than a complex ruse, designed to stymie the advance of online poker in California while furthering these tribes’ other financial interests.

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