Coalitions Shuffle The Deck, But CA Online Poker Still A Wash This Year

Hands shuffling playing cards

In an April interview with Online Poker Report, California Assemblyman Reggie Jones-Sawyer pronounced California online poker dead for the 2017 legislative session. This was a bit surprising so early in the process. Especially considering Jones-Sawyer introduced an online poker bill earlier this year.

But with the two sides at an impasse, Jones-Sawyer was, more or less, stating the obvious.

In his postmortem, Jones-Sawyer cited the need to let the tumult from 2016 die down. Last year, both sides found themselves backed into a corner at one point or another. Jones-Sawyer’s hope is that after some time for healing, the two sides can come back together. Then all parties can try to work out a proposal that would be amenable to all.

Jones-Sawyer told OPR:

“I think the ability to work out something next year has a bigger chance if we do some of the come-together healing things right now. I don’t want to sound like a minister or psychologist, but we’ve got to start from ground zero where we’ve got to at least get people to want to try to get it done again. When I first started on this in earnest, we were going slow and methodical, and we had some successes. We weren’t trying to rush anyone and we weren’t pitting one side against the other, as best we could.”

Legislation at a stalemate, but coalitions keep changing

Legislative action might be unlikely, but the landscape continues to shift, particularly when it comes to the two main coalitions.

In 2016 it was the Pechanga coalition that saw some minor defections when there was growing support for a bill seen as very favorable to PokerStars.

This year, it’s the PokerStars coalition that is under duress.

San Manuel bids adieu to the coalition

Not long after Jones-Sawyer declared online poker DOA in 2017, the San Manuel Band of Mission Indians, one of PokerStars’ two key tribal casino allies, announced it was throwing in the towel. The tribe then left the PokerStars’ coalition.

Jacob Coin, San Manuel’s executive director of public affairs, explained the decision via email:

“Because this effort has taken so long and required so much tribal effort and attention … San Manuel has decided to turn to other tribal issues at this time and has thus terminated its participation in the coalition. San Manuel wishes every success to the remaining coalition members and appreciates the fine and effective working relationship it has had with all of them. No inferences of any kind should be drawn from its decision to withdraw from the coalition.”

The loss of San Manuel doesn’t tip the scales in any discernible way. However, it does limit PokerStars’ ability to try to overcome what had been a shrinking opposition party.

Bottom line: the loss of San Manuel erodes the strength of the PokerStars coalition, but doesn’t incapacitate it. PokerStars still has Morongo in its corner. With Morongo, the online poker company has the political clout needed to prevent harsh bad actor language from working its way into a bill.

Card rooms under fire

It certainly does not help the PokerStars coalition that two of the three California card rooms that have thrown their lot in with PokerStars find themselves in legal trouble.

Gardens Casino reached a $2.8 million settlement with FinCEN in July 2016. The casino admitted it violated money laundering protocols in the Bank Secrecy Act.

But Gardens troubles didn’t end there. Gardens is also in hot water with the state. After Gardens failed to disclose the ongoing federal investigation during its most recent license renewal, the state threatened to pull its license.

The other PokerStars-aligned card room that’s landed in legal trouble is the Bicycle Casino. Federal agents raided and shut down The Bike for a period of about 20 hours in April.

Like Gardens Casino, the Bike’s troubles stem from violations of anti-money laundering procedures.

Gardens and The Bike are still coalition members. Their ongoing legal issues will affect the Stars coalition in at least two ways though:

  • The Pechanga coalition can leverage these legal issues as a further sign that PokerStars and its allies are unsuitable for licensure.
  • The two card rooms’ attention will be diverted away from online poker as they deal with the much more serious issue of the AML investigations and the fight to keep their licenses.

Certainly the troubles plaguing Gardens Casino and Bicycle Casino add fuel to the bad actor fire. Plus, these issues will likely keep the two casinos from devoting their full time and energy into online poker.

Steve Ruddock

About

Steve Ruddock is a longtime member of the online gambling industry. He covers the regulated US online casino and poker industries for variety of publications, including OnlinePokerReport.com, PlayNJ.com, USPoker.com, and USA Today.