What Impact Will San Manuel’s Defection on CA iPoker?

Written By Steve Ruddock on November 18, 2014
San Manuel Abandons Tribal Gaming Coalition

Last week the San Manuel Band of Mission Indians announced they would be breaking ranks with the coalition of 13 tribes they joined several months ago. The coalition of 13 tribes was originally formed as an oppositional force against the powerful union between PokerStars, the Morongo Band of Mission Indians, Commerce Casino, Bicycle Casino, and Hawaiian Gardens Casino.

Not only did San Manuel break ranks, but the tribe switched sides entirely, joining the enemy so to speak, by aligning themselves with the PokerStars coalition.

But I’m here to tell you not to get too excited about last week’s announcement from San Manuel. The tribe’s change of heart will likely have little impact on legislative efforts in California, and will do little to solve the polarizing Bad Actor issue in the state.

Immovable object vs. the unstoppable force

Gambling Compliance’s Chris Crafcik made a very astute tweet explaining how the dynamics would likely remain the same following the announcement of San Manuel joining the PokerStars alliance:

What the San Manuel shift means is that the two opposing sides may be even more evenly matched, which could conceivably make things harder in the state. But as long as the Morongos are on one side and Pechanga is on the other, little will change.

Something that could change the balance of power would be if PokerStars could come to an agreement with the politically powerful horse racing industry in California. Racing has been pushed aside by both factions (although the Morongos have addressed the need to bring racing into the mix in some capacity) during the debate. If racing ends up throwing its considerable political weight behind PokerStars it could be a game changer.

Possible repercussions

While it does little to move California closer to a consensus on an online poker bill, San Manuel’s defection does pose several potential problems for the Pechanga coalition.

First, it weakens the coalition. It may not strengthen legislative efforts or tip the scales too far in any one direction, but it does make PokerStars stronger, and the tribal faction weaker.

Second, it has likely left many of the other members of the tribal coalition wondering if their loyalty could cost them in the long run. With the defection of San Manuel, I’m sure some members of the tribal coalition are wondering whether other tribes in the coalition are perhaps in talks with PokerStars and could potentially switch sides.  For some of the smaller tribes (who wield less political clout) an alliance with PokerStars may appear a bit more promising.

Third, from an outsider’s perspective the tribal coalition now seems shaky – the first crack has appeared. The tribal coalition was formed out of necessity, while the PokerStars coalition has strong bonds and seems more unwavering.

If one succeeds they all succeed in the PokerStars coalition since they will have a working relationship post-legislation and will be partnered with the best online poker provider in the world, whereas the Pechanga coalition will simply go their separate ways regardless of the outcome, and be left to fend for themselves.

Fourth, for tribes that are not entirely opposed to PokerStars, but needed to choose a side in this fight, it may allow them to break ranks (without joining the PokerStars coalition) and form a third, independent coalition. This coalition would likely consist of tribes (or several autonomous tribes) tired of the gridlock, who would be willing to support whomever presents an agreeable online poker bill.

One possible example of a tribe willing to break ranks is the Pala Band of Mission Indians who have their own proprietary software (Pala Interactive) and are set to launch in New Jersey.  Pala has a legitimate interest in online poker and may be growing tired of the gridlock.

Another example would be the United Auburn Indian Community, who are partnered with bwin.party. The UAIC is part of the tribal coalition, but bwin.party Group Director of Poker Jeffrey Haas made what seems to be an argument against Bad Actor clauses when I asked him the official bwin.party stance on Bad Actor clauses in California:

“This is a matter for the regulators to decide.”

Compare this to PokerStars own comments on the same topic made by Head of Corporate Communications Eric Hollreiser:

“Most regulatory frameworks around the world leave the assessment of suitability to qualified expert regulators.”

The December bill will tell us a lot

When Assemblyman Reggie Jones-Sawyer introduces his online poker bill in December it should give us a good indication of what has been transpiring behind the scenes in California.

Three things to keep an eye on:

  • Does it contain Bad Actor language, and how far does the Bad Actor clause go;
  • What concessions, if any, are made to racetracks, smaller card rooms, and smaller tribes;
  • Who backs the bill and who comes out against it.
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Steve Ruddock

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.

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