California AG Puts a Stop to Tribe’s Online Poker Gambit

sealofCaliforniaLegalizing online poker in California has been a long, slow grind and borne scant results. In Sacramento online poker has been sheer gridlock for over five years.

California legislators, tribal factions, card rooms, and other interest groups have deliberated, cajoled, and compromised, but many issues are still unresolved.

The process has been frustrating. Which could explain why, when a remote California tribe declared they would take matters into their own hands and launch an online poker site, virtually everyone took notice.

It began in June when the small, previously little-known tribe located in Southern California, the Iipay Nation of Santa Ysabel, walked on to the main stage of the online poker debate, made their speech, and effectively “dropped the mic,” declaring they would launch an online poker site in California without legislative approval.

Santa Ysabel’s objective

The Santa Ysabel tribe’s plan was to launch an online poker site under the pretext that online poker falls under the definition of Class II gaming as found in the 1988 Indian Gaming Regulatory Act (IGRA).

To prove they were serious, Santa Ysabel unveiled their play-money website, and announced a trio of partners that would assist them in the efforts:

  • The much maligned Kahnawake Tribe (located in Canada) would house the servers and act as the regulatory body overseeing the tribe’s online offerings.
  • A newly minted payment processor, FinPay, with a questionable history in the industry, would handle the payment processing end of the operation.
  • And Dobrosoft/IG Soft, which currently provides the online poker software to several offshore, unregulated online poker rooms operating in the United States, would provide the poker client.

After several delays and false alarms the tribe eventually launched an online gaming site, but it wasn’t their proposed online poker room, instead it was an online bingo site,

Just days after the launch of Desert Rose, California Attorney General Kamala Harris filed a complaint and Temporary Restraining Order (TRO) against Santa Ysabel’s online bingo site, and the DOJ later added a UIGEA violation to the list of charges already rendered by the California AG.

And with that the Santa Ysabel’s online poker gambit came to a crashing halt. Although the tribe has since pushed back on these injunctions, and are posturing that the launch of a real-money online poker site is still imminent. At the same time the tribe’s online bingo site is currently still up and running until this is decided in court.

Questions from the outset

From the outset the Santa Ysabel’s motives and sincerity were questioned. Were they courting support and trying to gauge the level of opposition to their cause? Were they merely attempting to strengthen their bargaining position in a new tribal compact? Did they feel they were in fact justified to launch an online poker site under Class II gaming?

There were also concerns over what would happen if they succeeded? Would any tribe in any state suddenly able to launch an online poker site on their own accord?

Other commentators openly questioned how a small tribe that had closed its land-based casino just months before, owing millions of dollars to creditors, was able to find startup capital, and how they planned on financing such a monumental undertaking?

Bottom line

As much as we would like to see online poker return to the U.S., online poker advocates should be thankful the Santa Ysabel’s iGaming gambit started and finished with online bingo.

Despite Santa Ysabel’s repeated protestations that this would be 100% legal, even if we assume it is, the tribe’s online poker room would not be playing by the same rules as the legal online poker rooms in Nevada, Delaware, and New Jersey, and may do harm than good.

To start with, Santa Ysabel would not be using a third-party player verification service. They would not be using a licensed geolocation company.

Another worrisome aspect of this venture is the decisions and oversight would be handled by a tribe that already bankrupted their land-based casino and owes millions from this failed gambling venture.

This lack of outside oversight from the state was apparent before they ever dealt a hand of poker, with just a cursory look at their chosen partners: FinPay, Dobrosoft, and the Kahnawake Tribe, which has perhaps the most flies.

With the Kahnawake’s setting the rules, there would be zero controls concerning the holding of player deposits in segregated accounts, considering they imposed no such restrictions on the other online poker rooms they licensed –Ultimate Bet and Absolute Poker included. would be, for all intents and purposes, an unregulated offshore online poker room that happened to be headquartered in the United States – right down to the software they were using.

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