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2006/12/07
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I am still trying to figure out if it is going to be legal in the states for onliine gambling😟😟? any input from any 1😟😟??:crying
This month's federal indictments of three prominent online poker outfits threw the multibillion-dollar industry into turmoil.
The charges could create a window of opportunity for California or other states to legalize online games. Or they may give state lawmakers another reason to keep a safe distance from the issue.
Even before the charges, licensing online gambling has divided politically active tribes with casinos as well as veteran members of the Legislature's Democratic majority. The Morongo Band of Mission Indians near Banning and the San Manuel Band of Mission Indians near San Bernardino are dominant members of a group pushing one of two legalization bills in Sacramento.
But other influential tribes, such as the Pechanga Band of Luiseno Indians near Temecula, have been vocal critics of the idea, saying it would hurt tribal casinos. And other tribes, such as the Agua Caliente Band of Cahuilla Indians in the Coachella Valley, have stayed neutral.
Supporters of legalizing online gambling say California is losing out on hundreds of millions of dollars in revenue from residents playing illegal sites based in Ireland, the Isle of Man and elsewhere. Legalization at the federal level is inevitable, they say, and California would get the most money if it had its own system in place before then.
But skeptics downplay the prospect of quick action in Washington. They also contend that legalizing online poker or other games, such as California 21, could violate parts of revenue-sharing agreements between the state and tribes. And legal online games would increase the number of problem gamblers, critics say.
And among proponents of online gambling, there are deep divisions about the right approach. State senators Lou Correa, D-Santa Ana, and Rod Wright, D-Los Angeles, have dueling measures.
Senate leader Darrell Steinberg, D-Sacramento, recently told colleagues that his office will try to help broker a consensus.
"Obviously, if you have divisions, particularly among Indian tribes, that makes it tough," said Assemblyman Brian Nestande, R-Palm Desert , the top Republican on the Assembly committee that oversees gambling. "And you're always going to have some people who believe you shouldn't have any legalized gaming at all."
Nestande has not taken a position on either bill.
FEDERAL CHARGES
The indictments of Full Tilt Poker, Poker Starz and Absolute Poker on April 15 -- what some industry insiders call "Black Friday" -- injected a new level of uncertainty into the California debate.
U.S. authorities allege that the companies, which are based outside the U.S., set up phony businesses to move money to and from U.S. players as a way to bypass the 2006 federal ban on online gambling. The feds seized domain names, and thousands of U.S. players lost access to their money, at least temporarily.
The indictments leave untouched a provision of the federal law that allows states to license their own online games. California would be the first to legalize.
People closely involved in the process disagree on how the latest developments change the chances of legalization.
"In my opinion, this indictment is really going to put a damper on anything happening in Sacramento, and nationally, for that matter," said Jerome Encinas, director of government affairs for the California Nations Indian Gaming Association.
But within hours of the indictments, the group behind the Morongo-backed legislation said it was the perfect time to act.
"By enacting SB 40, sites like those indicted today would be banned from the California market and strong protections for consumers would be in place," said Ryan Hightower, spokesman for the California Online Poker Association. "This is a real game-changer in terms of revenue potential for California."
Patrick Dorinson, a spokesman for several online poker firms that have never taken illegal U.S. bets, said the indictments should eliminate fears that large off-shore sites would swoop in and dominate a legalized California market.
"There's a window that's open now," Dorinson said. "You've now got 6 million people in the country, and 1 million people in California, with no place to play."
TWO BILLS IN PLAY
The issue has attracted a bevy of special interests, including card clubs, the horse-racing industry, software vendors and tribes.
The Correa bill backed by the Morongo tribe originally would have put a single "licensed entity" that was a tribe or already had a gambling license in charge of a legalized online poker network.
Last month, Correa amended the measure to allow three licensed entities at the start, to a maximum of five. The change hasn't ended criticism that the bill's influential backers are trying to limit competition.
"Other than the fact it's illegal, it might be a good idea," Wright said.
Wright leads the committee that oversees gambling issues. Correa's bill faces a May 6 deadline to be considered by the panel and, as of Wednesday, no hearing had been set.
Wright's bill, three times as long, would license games besides poker. He also wants to expand the pool of potential licensees beyond what the Correa bill proposes. What if web giant Google wants to apply and offers to pay the state the most money, he has said.
REVENUE FORECAST
Both sides tout online gambling's revenue potential for the recession-wracked state budget. But experts disagree about how much the state could get, and how soon.
Earlier this year, a study commissioned by the poker association estimated that legalized poker could earn the state more than $1 billion over the next decade.
But a 2010 study commissioned by the California Tribal Business Alliance concluded that online poker would yield little money to the state while voiding more lucrative revenue-shari