PokerStars Coalition Issues Support Statement as AB 2863 Hearing Nears

Intrastate online poker is back on California’s legislative-debate calendar, according to multiple reports.  A new hearing on the most recently submitted bill in the Golden State, AB 2863, which was introduced in February by California State Assembly “GO” (Committee on Governmental Organization) members Adam Gray and Reginald Jones-Sawyer.

State of CaliforniaA coalition centered on international online-poker giant PokerStars has issued a statement of support for the bill.  The letter was first published in its entirety by OPR but has since become separately available.  The  letter (below) generally thanks gray for his efforts and offers continuing support, and is signed by Amaya/PokerStars, the San Manuel and Morongo bands of Mission Indians, and three prominent LA card rooms, Commerce, the Bike and Hawaiian Gardens.

All five of these California poker-offering outlets have previously inked partnership deals with Stars in the event intrastate online poker is eventually approved and Stars itself receives licensing.

As for AB 2863, the latest in a long line of online poker bills in the state,i t received an initial reading later in February and was moved on to its first procedural stop last month, that being the GO Committee chaired by Gray which also features Jones-Sawyer as a prominent member.  AB 2863 is generally viewed as a compromise bill by most interested parties in the long-running California iPoker debate, and closely resembles earlier bills submitted by Gray.  Jones-Sawyer, who has offered competing bills, some orchestrated by a hardline group of about nine California tribal nations who for years sought exclusivity to online poker in the state, has been on board with Gray’s most recent submissions on the topic.

Some amendments have been proposed that could still scuttle this bill’s chances.  One of them, a proposed block on existing customer databases that PokerStars parent Amaya Inc. might possess, is referenced in the letter of public support that the PokerStars-centered coalition sent yesterday to Chairman Gray.

Also clouding the scene surrounding AB 2863 is the recent announcement of insider-trading charges by Quebec financial regulators against Amaya’s CEO, David Baazov, who has taken a leave of absence from his roles as CEO and chairman as the investigation continues.  Last week, the chairwoman of one of PokerStars’ tribal partners, Lynn Valbuena of the San Manuel Mission Indians, referenced Baazov’s and Amaya’s troubles amid a consensus-building meeting on AB 2863 being conducted by GO Committee chair Gray.

Said Valbuena, “San Manuel has deep concerns about these latest Amaya revelations,” which some media outlets expanded upon as a herald of the imminent collapse of the Stars-led coalition.

That read seems an overreaction.  Virtually any firm connected to Amaya would have deep concerns over the charges leveled at Baazov and one or two of the company’s other insiders.  If proven out, it appears certain that Baazov would be departing the Amaya/PokerStars scene, and the world’s largest online poker company could even be sold again.

Nonetheless, Stars itself isn’t going anywhere, and the brand’s massive favorability with consumers gives the site’s potential California partners plenty of reason to take a “wait and see” approach.  We do note that the brand’s lasting goodwill is a vestige of its years under the Scheinberg family’s aegis, and that Stars has taken some PR hits since being acquired by Amaya, but the company’s size and general market impact remain massive, as shown recently in New Jersey.  Since Stars is probably footing the bill for much of the consensus-building effort in California, it’s a good deal for its partners, statements of “concern” or not.

Yesterday’s letter from all known members of the Stars coalition debunks a bit the notion that the group faces imminent collapse.  However, it has likely left one possible addition, the United Auburn Indian Community, riding the fence for the time being.  The UAIC remains not a part of the Stars-centered group, and likely won’t consider joining until such time as the regulatory cloud surrounding Stars head Baazov is resolved.

————————————-

The coalition’s letter:

The Honorable Adam Gray
Chairman, Assembly Governmental Organization Committee
California State Capitol, Room 4117
Sacramento, CA 95814

Re: Support AB 2863

Dear Chairman Gray,

On behalf of a broad coalition of tribal governments, card clubs and online operators, we write in support of your AB 2863, your bill to protect consumers, create jobs, and strengthen our state’s economy by authorizing and regulating intrastate, Internet Poker in California. Authorizing online poker will be good for millions of consumers and poker players who will benefit from a safe, regulated, commercial gaming environment where they are protected and assured that the games are fair and honest.

We are proud to support this bill which would establish a vibrant, competitive marketplace, provide superior consumer protections, require strict oversight and regulation of licensees and service providers, and ensure that the state receives a reasonable return.  

Our coalition has worked closely with legislators and other interested parties to thoroughly vet this policy issue since 2008.  After years of research and deliberation, your leadership has produced a bill with broad support from California’s Indian tribes, the larger gaming community, and internet poker players.  We are optimistic that with your continued leadership and direct consultations with interested parties, this comprehensive piece of legislation can reach Governor Brown’s desk and earn his signature.  

As you know, there have been many informational hearings over the last 9 years in the Senate on this subject matter and we appreciate your informational hearing last summer in the Assembly that brought a cross‐section of stakeholders to the Capitol to engage in a thoughtful discussion.   With this extensive deliberation and dialogue, the major roadblocks that have prevented iPoker legislation from moving forward have now been resolved.   
   
We also appreciate your inclusive, transparent approach for getting all parties to dialogue.  We are confident the few remaining issues can be resolved and an agreement can be reached to finalize AB 2863 as it moves through the legislative process.

Our coalition does have some concerns with the bill as drafted and proposed amendments that we have seen. Namely, we are concerned about provisions that would restrict the ability to use customer databases, as that will only serve to stunt the growth of the iPoker market and the revenues available to the state.  

Nonetheless, we support AB 2863 and look forward to working with you, your staff and all interested parties to move this bill through the legislative process without delay.  

Every year that California fails to act not only puts consumers at risk while playing online games from unregulated offshore localities that provide few protections, but our state also loses out on collecting hundreds of millions of dollars that can be used for essential programs like public schools, public safety, healthcare and social services.

Again, thank you for introducing this much needed legislation.   

Sincerely,

San Manuel Band of Mission Indians
Morongo Band of Mission Indians
Commerce Casino  
Bicycle Casino
Hawaiian Gardens Casino
Amaya Inc./PokerStars

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