Latest California Online Gambling Hearing: Plenty of Bark, but Little Bite

A steady parade of stakeholders offered their viewpoints and preferences regarding the future of regulated California online gambling in a Wednesday hearing before a state legislative committee that as expected, produced plenty of rhetoric and sound bites but little substance to add to the discussion.

CaliforniaThe hearing was held yesterday afternoon before the California State Assembly’s “GO” Committee (the Committee on Governmental Organization).  Several online-gambling regulatory bills remain under consideration by the committee, which in recent weeks has already approved one shell measure on the topic for further consideration.

Wednesday’s hearing was information-only, with no voting scheduled or conducted.  The four-hours-plus hearing was broken down into a half-dozen topic-specific panels, with nearly two dozen industry executives, regulators, and interested parties on hand to offer their varying takes on the several issues facing the largest US state as it tries to resolve years of legislative gridlock on the topic.

Here’s a rundown of the various topics and the participating witnesses.  The six topics featured introductory statements from the witnesses and a question-and-answer period by GO Committee members following an introductory statement by committee chairman Adam Gray, one of the sponsors of the shell bill already passed on by the GO Committee:

Background: How did Internet gaming evolve and what might the future hold from a legal, regulatory, economic, and operational standpoint?

  • Stephen M. Hart, J.D., Partner, Lewis Roca Rothgerber LLP
  • Chris Krafcik, Research Director North America, GamblingCompliance
  • Anita Lee, Senior Fiscal & Policy Analyst, Legislative Analyst’s Office

Regulated Online Gaming: What can legislators, regulators and operators expect given the experience in legal markets to date and the related practices to effectively implement and regulate iPoker.

  • Craig Abrahams, CFO, Caesars Interactive Entertainment
  • Michael J. Pollock, Managing Director, Spectrum Gaming Group
  • Anna Sainsbury, CEO, GeoComply

Enforcement and Regulation: What would be needed from a regulatory standpoint to implement and regulate iPoker in California?

  • Anna Carr, Deputy Director of Legislation and  Regulatory Affairs Division, California Gambling Control Commission
  • Nathan DaValle, Assistant Bureau Chief, Bureau of Gambling Control, US Department of Justice
  • Stacey Luna-Baxter, Assistant Bureau Chief, Bureau of Gambling Control, US Department of Justice
  • Richard Schuetz, Member, California Gambling Control Commission

Suitability Standards for Licensure: What suitability standards should be considered in an iPoker framework bill to deem a licensee eligible for licensure?

  • David Fried, Chief Counsel, California Grand Casino
  • Jeff L. Grubbe, Chairman, Agua Caliente Band of Cahuilla Indians
  • Eric Hollreiser, Head of Corporate Communications, Amaya Inc.
  • Leland Kinter, Chairman, Yocha Dehe Wintun Nation
  • Anthony Pico, Chairman, Viejas Tribal Council
  • Keith Sharp, General Counsel to Hawaiian Gardens Casino, iPoker Counsel to Commerce Casino and Bicycle Casino
  • Lynn “Nay” Valbuena, Chairwoman, San Manuel Band of Mission Indians

Horse Racing’s Eligibility: Should California’s Horse Racing Industry be included as an eligible licensee in an iPoker framework bill?

  • Bob Baffert, Thoroughbred Trainer, Board of Directors, Thoroughbred Owners of California
  • Keith Brackpool, West Coast Chairman, Stronach Group
  • Mark Macarro, Chairman, Pechanga Band of Luisefio Indians
  • Mike Pegram, Board Chairman, Thoroughbred Owners of California

Consumer Perspective: Should California authorize and regulate online poker?

  • John Pappas, Executive Director, Poker Players Alliance
  • Robert Uithoven, Board Member, Coalition to Stop Internet Gambling

The second half of the day’s six-pack of topical hearings was expected to produce most of the day’s verbal fireworks, though that turned out to be only part true.  Pechanga tribal chairman Mark Macarro surprised many onlookers by positing that the hardline coalition of about ten tribes, of which the Pachanga is one, might be open to a profit-sharing system through which some online-gambling revenue might be shunted towards the state’s pari-mutuel racetracks.

Those tracks have the support of California Governor Edmund “Jerry” Brown, but have before this been excluded from consideration by Pechanga and the other hardline tribes.  That subtopic also featured the day’s pseudo-celebrity testimonial appearance, by renowned horse trainer Bob Baffert.  However, according to several reports, Baffert did more post-Triple Crown celebrating about his horse, American Pharoah, than offer any deep discussion or knowledge of the topics at hand.

The following topic dealt with the topic of supposed “bad actors,” specifically inclusions in several bills designed to block international online-poker giant PokerStars from participating in the California.  Amaya Gaming’s Head of Corporate Communications, Eric Hollresier, was on hand to defend PokerStars’ interests and explain the nature of the 2012 settlement between Stars and the US Department of Justice, in which no wrongdoing was admitted.

Some of the committee members used the occasion to briefly grill Hollreiser about Stars’ background and earlier, pre-Amaya history, while others wondered why such a “bad actor” clause was even necessary, since all prospective licensees and third-party service providers would have to clear suitability checks by California gaming regulators under most forms of the bills being considered.

The final topic of the day pitted pro-online witness John Pappas, executive director of the Poker Players Alliance, against a representative of the radical anti-gambling group CSIG, the Coalition to Stop Internet Gambling.  The CSIG coalition is comprised largely of far-right, conservative-religious factions who are against all forms of gambling, but in particular any new online form or expansion of gambling in general.  Robert Uithoven, representing CSIG, repeatedly tried to introduce falsely created and discredited “research” as fact during his appearance, but was generally parried by the well-prepared Pappas.

What remains to be seen is what effect the day’s exercise has upon the bills’ state-level fates.  Several of the GO Committee members appeared to frame their questions to the testisfying witnesses in ways that suggested that they’d already made their decisions on the topic of California online gambling.  Another hearing on the issue is scheduled for early July, which to a certain extent, promises more of the same.


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