California iGaming Week in Review: Horse Tracks and Pressure’s on Santa Ysabel

Written By Jennifer Newell on July 28, 2014 - Last Updated on September 13, 2022
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Last week in California, the talk over two major topics heated up even further. And neither one of them revolves around the actual drought that the state is experiencing.

The August 31 deadline for the passage of some form of online poker bill in California is little more than one month away, and the discussions surrounding bill requirements seems to be pushing any possibilities of a concrete bill even further behind.

Horse tracks want a piece of the online poker pie, and according to the Poker Players Alliance, lobbyists for those establishments could be the ones who hold up the bill indefinitely. While everyone else is talking about the bad actor clause, horse tracks could be the ones leading the charge to stop the bill, right out of the gate.

Meanwhile, Santa Ysabel and its real-money online poker site still insists it will launch regardless of said bill. With lawyers on their side, the company is standing by its view that the site is legal and doesn’t need no stinkin’ authority to operate. But will they put their money where their opinions are?

Giddyup, Online Poker

The bad actor clause has been at the center of most discussions regarding the possibility of passing an online poker bill in California. Last week, a group of 25 card rooms penned a letter to State Senator Lou Correa to indicate that their participation in any online poker regime is necessary in order for them to support the cause.

Most recently, the horse racing tracks of the state are speaking up.

PokerNews spoke to PPA Executive Director John Pappas after the GiGse conference, and he chimed with his impressions. He sees some middle ground on the bad actor clause, and he feels that differences can be resolved.

“Anyone who says that’s the reason it isn’t happening is using it as an excuse,” he said. “But saying the horse racing tracks can’t be a part of the market whatsoever doesn’t leave any room for compromises.”

Pappas said that a representative of the horse tracks spoke at GiGse and said that any bill that excludes them from the regulated online poker industry is “wholly unacceptable.” The representative “made it clear that they still have powerful allies in the Assembly and Senate.”

Meanwhile, tribal representatives, such as those involved with the tribal alliance that includes the 13 powerful tribes with major influence over online poker in the state, have noted that they will not accept the participation of horse tracks in the new industry.

There may be too many horses on the track for a race to happen at this point.

Even if the bad actor clause isn’t the impediment that it once was, the road is still not smooth. If New Jersey allows PokerStars into its online poker setup, it may change the minds of some lawmakers in California. But the tribes remain firm on the exclusion of PokerStars, and the now-added friction between tribes and horse tracks may be too much for the debate to handle.

Pappas seemed to think that there is simply no interest in overcoming all of the obstacles this year.

“I think the prevailing concern is that some of these tribes aren’t really interested in getting a bill done this year,” he told PokerNews, “and that some of the lawmakers would like to see it delayed as well. They’d like to push it off another year to build alliances, fundraise, and kind of assess the situation as it develops in other states and with the federal government.”

He may be right. With just one month to go and no hearings on the Assembly or Senate schedule, as well as the state legislature on recess until August 4, the momentum for California online poker has slowed tremendously.

It may be stopped altogether for 2014.

PrivateTable Assertions Could Be Tested

If no online poker bill passes in 2014, the promise of the Iipay Nation of Santa Ysabel to launch real-money online poker on could be put to the ultimate test.

The site was supposed to launch in July but has yet to do so. The tribe has been working with California legislators to enact online poker legislation in 2014, but the aforementioned reasons may keep it from happening.

PrivateTable may need to put its real-money gaming where its mouth is and launch. Santa Ysabel Interactive President and Casino General Manager David Chelette has repeatedly asserted that the online poker website does not violate any laws.

But in a recent interview with Online Poker Report, Chelette noted that the tribe’s primary goal is to work with legislators and be included, along with other small tribes, in any legislation that moves forward.

“As California gets closer to the final draft of the proposed legislation, we are hoping to have an opportunity to provide some input as to how it could better allow Santa Ysabel and other small to mid-level gaming tribes a way to participate within a state-licensed online gaming structure.”

PrivateTable is ready for launch, with servers established and set up in the Mohawk Territory of Kahnawake and an inter-jurisdictional license from the Kahnawake Gaming Commission. Secondary servers are actually located on the Iipay Nation’s tribal reservation. The site itself is operated by Santa Ysabel Interactive and regulated by the Santa Ysabel Gaming Commission.

For now, Chelette asserts that PrivateTable is “designed and implemented to be in compliance with current federal law and California state law.”

Gaming attorneys have been chiming in on the situation and seem to feel that Santa Ysabel is well within its rights as a tribal entity to operate online poker in California without the formality of a new online poker law.

Casino City Times interviewed Martin Owens, a gaming attorney who works on behalf of Santa Ysabel, and he noted that the servers being located on Native American land puts the tribe in full compliance with California law. He claimed that online poker falls under the Class II category of gaming in the Indian Gaming Regulatory Act (IGRA), which doesn’t require the consultation of any state authority for operation of the activity.

In addition, Owens contended that Santa Ysabel and California signed a Class III gaming compact in 2005, which authorizes the tribe to offer gaming.

Now, it’s PrivateTable’s turn to act. Are they confident enough in their arguments and legal research to launch the site and begin accepting real-money wagers for online poker play in California?

All eyes are on one tribe in California to see if they do it.

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Jennifer Newell

Jennifer has been writing about poker for nearly a decade, including extensive work as a freelancer, where Jennifer has worked for numerous gaming-related websites, magazines, and blogs with a focus on players, news, and interesting stories. Follow Jennifer on Google+ and Twitter.

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