Despite federal laws which ban the online gambling business in the USA, State Sen. Lou Correa, D-Santa Ana, California, wants laws to be put in place to regulate this industry in his state. There are however some problems that come with this territory, and the Unlawful Internet Gambling Act is not necessarily the biggest hurdle to overcome. Initially a bill was proposed that would allow online poker and as Native American Indian tribes control this industry, the bill (SB40) is perceived to have been designed to accommodate COPA – the California Online Poker Association, which is a coalition of 29 tribes which manage 30 live card rooms.
However Native American Indian tribes who are not part of the COPA coalition, believe SB40 discriminates against them, and no preferential treatment should be allowed to any one group. The California Tribal Business Alliance (CTBA) that consists of tribes which did not ante up the $50 million in up-front fees required to become licensees; say SB 40 has been tailor-made to suite the COPA coalition only, and they are not wishing to have any part of it – although they do want online gambling; so, CTBA are not supporting the bill. The $50 million was due to be paid into Californian coffers no later than July 1, 2011.
As far as Correa is concerned, he has said that he has an open door, and is willing to listen to any proposed amendments, although he wants the bill to advance very soon. His words were ~ “Come talk to me, if we sit down and talk we can come up with a win-win solution.”
As far as the California Tribal Business Alliance is concerned they are game to compete in the online gambling market – at this point in time with poker, but only if the process is open and fair. If introduced in December – which is the plan – the bill only allows for a handful of licensed sites and these will be intrastate. Correa’s amendments are for $250 million (at least five licenses) to be paid into state pockets in order for the bill to pass. This has sweetened the deal as far as the state is concerned. But it also means that no more online gambling licenses will be granted until 2016. This is to give the initial operators a breathing space to recover their investment. This wins a vital few years of monopoly for a fledgling industry, but also allows room for tribal dissention as COPA is now being accused of seeking out such a monopoly.
The feeling from COPA is that every tribe in California was afforded the option to become part their group for a nominal fee of only $1. According to supporters of the bill, this means that no tribes were locked out of the process, and by pooling resources, even tribes with very little ability to generate wealth would be able to share in the wealth generated from online gambling. CTBA is also not buying this argument; they apparently are not keen to share profits with smaller, less fortunate tribes.