Hardline Tribal Coalition Opposes New Amendments as California Online Poker Battle Continues

The political battle over suitability requirements and so-called “bad actor” exclusions in California’s political battle over the possible regulation of intrastate online poker has flared up again, with a hardline coalition of California’s tribal nations authoring a formal letter of opposition to the latest version of Assembly Bill 2863, as approved by Assembly “GO” (Governmental Organization) Committee chair Adam Gray on Thursday.

CaliforniaThe three-page letter of opposition to AB 2863 was signed and dated on Friday by the usual core of opposition to Gray’s bill.  The six tribal chairpersons and nations now on formal record as opposing AB 2863 are:

Mark Macarro, Tribal Chairman, Pechanga Band of Luiseño Indians

Jeff Grubbe, Tribal Chairman, Agua Caliente Band of Cahuilla Indians

Clifford LaChappa, Tribal Chairman, Barona Band of Mission Indians

Margie Mejia, Tribal Chairwoman, Lytton Band of Pomo Indians

Robert J. Welch, Jr., Tribal Chairman, Viejas Band of Kumeyaay Indians

Leland Kinter, Tribal Chairman, Yoche Dehay Wintun Nation

Gray’s re-forwarding of the legislation now includes the amended “bad actor” language based on an end-of-2011 cutoff date regarding the prior offering by offshore companies of online-poker services to Californians.  Though that date is in line with the current state of US federal law, the hardline group, centered on the Pechangas and Agua Calientes, is adamant about a UIGEA-based cutoff date.

The real intent, as explicit detailed in Friday’s letter of opposition, continues to be a financially-incentivized goal of trying to bar from California the possible participation of PokerStars, which looms as formidable competition.  Friday’s opposition letter also includes attacks on the license fees and tax rates now specifically defined within AB 2863, protesting those as well, but have no doubt: The focus of the Pechanga-led opposition has always been and continues to be PokerStars, meaning that this political split is as unresolved as ever.

“Our coalition remains committed to the policy principle that unlawful online gaming, whether in the past,
present, or future, must not be incentivized. The federal Unlawful Internet Gambling Enforcement Act
(UIGEA) clarified the legal status of online gaming in 2006, which caused all publicly traded online poker
operators to withdraw from the U.S. market. However, as most online poker operators exited the market due
to UIGEA several privately held offshore gambling websites made a conscious decision to continue operating
in order to capture market share and grow their companies and brands by unlawfully accepting bets from U.S.
players after October 13, 2006, when the UIGEA was enacted,” reads the opposition letter, which has been published in its original form over at OnlinePokerReport.

That statement is technically accurate but only in a limited sense, and it utterly omits overriding factors that forced several UK-based, publicly-traded companies to exit the US market post-UIGEA, most specifically a special reciprocity between the United States and the United Kingdom that contained the overriding threat of seizures and extradition to the US on something of a “guilty until proven innocent” basis.

The entire text of Friday’s opposition letter, in fact, is littered with such misconstructions and lies of omission, and bears the unmistakable hallmark of being drafted by gaming lawyers in the hardline tribes’ employ.  Whether or not that probable lineup of gaming laws includes prominent California-based gaming attorney I. Nelson Rose is unclear, although a previous statement made by Rose on the legality of gaming in general is provided.

“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. In fact, one of the world’s
leading experts on gambling law, Professor I. Nelson Rose, recently opined:

“’The common law and public policy of every state hold that gambling is an illegal activity. State-licensed gaming is an exception to the general rule. Like any other exception to common law, gaming, including Internet poker, is strictly construed in favor of limiting the activity. This allows the state to deny licenses to applicants who do not comply with the state’s requirements.’”

Note that the excerpt is construed to prejudge all Internet-based activity in favor of the coalition’s interests, despite the fact that jusisdictional debates over i-commerce has existed ever since the Internet itself was created, affecting far more than just gambling-related business.  In addition, at least as it relates to gambling, multi-jurisdictional and legal findings have general declared that the gambling activity is deemed to have occurred in the location of the business and its online-linked infrastructure, in the absence of any regulatory offerings elsewhere.

FlushDraw has reached out to Rose for clarification on the true context of the quote.  We’ll update as information warrants.  Also, tomorrow, FlushDraw will deconstruction the many false, limited and misleading assertions contained in the Pechanga coalition’s letter of opposition, in those assertions’ entirety.

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