Following the removal of Mike Gatto’s AB 9 and Reggie Jones-Sawyer’s AB 167 online poker bills from a Wednesday hearing, it’s time to start writing the obituary for California’s online poker hopes in 2015. Just be sure to end it with the same line that has accompanied the past six obituaries, “Next year looks promising.”
The announcement that the two bills would be pulled from Wednesday’s hearing came after the horseracing industry rejected Pechanga’s olive branch of revenue sharing and the capability to act as affiliates for online poker sites.
The inclusion/exclusion of PokerStars is certainly the sexier argument, but it’s the role of the state’s horseracing industry that seems to be the deeper issue. It should be noted that the only online poker bill that advanced through committee in the past seven years was a two-page shell bill that didn’t address either issue.
What does horseracing want?
Pechanga’s offer to horseracing was essentially a risk-free revenue stream that comes with a low ceiling. Racing wants the opportunity to develop their own online poker sites and take the same risks as card rooms and tribes.
What is it Pechanga and its allies fear?
On the surface it seems like horseracing would be bit players in California’s online poker industry. Apart from partnering with PokerStars, most people feel they are unlikely to be one of the major players in the industry. A number of analysts feel tracks should “take the money and run” and accept Pechanga’s offer.
Since they are essentially unwilling to even entertain the offer here must be legitimate reasons for scorning the offer, and there has to be a reason Pechanga et al. want to keep racing out of the mix.
So, if it’s not tracks cutting into their online poker revenue, perhaps it’s what could be coming further down the road: Namely, legalized online casino gambling.
The theory goes, if racing gets in on the ground floor with online poker it would be next to impossible to keep them from offering online casino games should the state eventually go down that path. From there it’s not hard to envision scenarios where slot machines added to racetracks as voters become more and more desensitized to expanded accessibility to gambling.
Another issue that may be at work is racing’s current online presence through TVG. Racing may appear like the potential also-ran in California’s online poker industry, but racing (as they often point out) is the only entity taking legal online best online in California. Because of the racing industries long tenure of online bets they likely possess a massive list of gamblers willing to place bets online in the state.
While the benefit of this list may be overstated, it’s still a powerful asset.
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