Pechanga no pal of PokerStars

July 05, 2016 3:00 AM
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A seven-tribe coalition, led by the Pechanga Band of Luiseño Mission Indians, owners of Pechanga Casino, California’s largest, is demanding substantial changes to California AB 2863, the Internet Poker Consumer Protection Act of 2016.

The coalition has been seeking to prevent PokerStars from entering the California market by insisting on a “bad actor” clause in any Internet poker bill.

Pechanga claims Amaya Gaming, PokerStars’ parent company based in Canada, is “unsuitable” because of its former ownership and activities, and the tribe insists PokerStars be penalized for past transgressions by waiting 10 years and paying a one-time, $60 million “fee” before taking wagers from Californians, a far stiffer penalty and restriction than currently on the table in Sacramento.

Making matters more troubling for Amaya and its stakeholders, CEO David Baazov is facing insider trading charges in Quebec, and a recent shareholders meeting was held behind closed doors, with officials refusing to discuss either the investigation or potential takeover bids.

Here is the main portion of Pechanga’s letter to California Assembly Member Adam Gray (D-Merced), who co-introduced AB 2863:

“Dear Chairman Gray,

“As a follow up to our June 27th Stakeholder meeting, we write to provide you with amendments on the suitability language that, if accepted in their entirety, would not only remove our opposition, but would take us closer to a support of amended position on the measure.

“First, we wish to acknowledge your work to make progress on a contentious issue. We also applaud the Appropriations Committee for advancing the concepts of delayed eligibility for past illegal actors and financial penalties for past illegal actions.

“That said, as clearly and consistently expressed by this coalition, resolving the suitability question in a manner that truly and effectively maintains the highest integrity in the operation of Internet poker in California remains the critically important and pivotal issue to be addressed. The language must provide real consequences for past illegal operation of iPoker sites from 2006 to 2011, and must not allow companies to benefit from the tainted assets (including financial assets, brand recognition and player data) gained from that illegal behavior.

“Unfortunately, the June 27 version of the bill does not resolve our fundamental suitability-related concerns. However, we offer the attached amendments that would:

“• Specify that any service provider applicant that engaged in Internet gambling after December 31, 2006 without a license is unsuitable for a license for a period of 10 years from the date of the first legal Internet poker bet in California.

“• Cause any assets such as trademarks, tradenames, databases or other intellectual property used for unlicensed Internet gambling after December 31, 2006, to be ineligible for use for a period of 10 years from the date of the first legal Internet poker bet in California.

“• Require, after expiration of the 10-year unsuitability period, persons and entities ineligible for licensure to pay $60 million toward the Internet Gaming Enforcement Fund prior to being deemed suitable.

“• Amend the existing non-severability provisions to prevent a lawsuit from overturning critical suitability and eligibility requirements of this bill.

“Essentially, all of the primary purposes of your measure will be maintained with our amendments. The sole change will be that those who operated illegally in the past will face clear consequences for those actions.

“Again, with acceptance of our attached suitability amendments we would be pleased to continue to work with you to refine financial and technical language to support and move AB 2863 forward.

“Regrettably, if these amendments are not accepted, we must continue to strongly oppose further movement of AB 2863. Not all members of the Coalition are moved to compromise and depart from the longstanding principle of disqualifying offshore websites and assets that took illegal bets. Accordingly, if these proposed amendments are rejected, we anticipate some will seek what they believe to be more appropriate protections for Californians – a ban on ‘bad actors’ and ‘tainted assets’ in the Internet poker industry.”

Clearly, there is much at stake here, as California, our nation’s largest state with nearly 40 million residents, has the largest potential player pool. Unfortunately, it seems the card clubs and tribal casinos can’t agree on how to share the potentially-huge profits that will likely be measured in the hundreds of millions of dollars.

But the real losers here are California poker players who want to play online. There’s no doubt every gaming concern in the state wants a piece of the Internet poker pie, but until all the competing coalitions find a way to work together, and agree on a reliable operator, it appears greed will continue to strangle the Golden State’s golden goose for the foreseeable future.

Let’s hope they come to their senses so we can bring legal Internet poker to California sooner rather than later!