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Copyright © Capitol Weekly
HEADLINE: Could Internet poker
return to California?
Body:
In 2006, Congress effectively put a stop to the booming online
poker industry. But now, a group of motivated online poker players,
and Assemblyman Lloyd Levine, D-Van Nuys, are looking at exploiting
a loophole in the federal law that could bring online poker back
to California.
Levine’s bill, AB2026, would order a study
on the federal law that banned Internet poker, and would explore
whether a California-only online poker service might be legal.
If it is, the state would be able to regulate the online games and presumably get a cut of the online action.
“Our understanding of the law is that so long as the player
and server (hosting the online game) are in California, it would
be legal,” said Levine. “But that’s what we
are trying to find out.”
The bill is sponsored by a group called the Poker Players of
America. According to its Web site, the group describes itself
as “American as apple pie — free Americans joining
together to fight for their right to play the All-American game
of poker!”
“Founded and guided by experienced political professionals
who also play poker, PPOA has been created to provide information,
mobilization and coordination of legislative/political action
programs necessary to make the voices of America’s millions
of poker players heard.”
The federal government used its power to regulate interstate
commerce to crack down on Internet poker in 2006. The feds decided
to target credit card companies, restricting their ability to
do business with online poker centers, many of which are not based
on American soil.
Proponents of the crackdown said online gaming provided a convenient
front for money-laundering while preying on children and gambling
addicts. At the time the ban was adopted, it was estimated that
23 million poker players were among the Americans who bet $6 billion
per year online, accounting for half the worldwide market, according
to analysis by the Congressional Research Service.
The crackdown has had an impact on the growing poker boom, both
on and off-line. In 2006, the main event at the World Series of
Poker had more than 8,700 participants. A year later, after the
Internet ban took effect, that number dropped to 6,358, reducing
the grand prize of the tournament from $12 million to $8 million.
Sponsors of the event blamed Congress for the drop in attendance.
Much of the world series boom had been fueled by online Internet
players, who bought in to cheaper tournaments for a chance at
winning a seat in the world series, which retails for $10,000.
In 2007, the casino hosting the 2007 main event did not allow
online poker Web sites to purchase main event seats to offer as
prizes for online tournaments.
Levine said that if there is a California-only solution, online
gamers might have to acquire a “GPS add-on” that will
ensure that gamblers truly are located in California.
But it is unclear just who would be running these new, California-only
Internet poker companies. Card club operators, who currently host
legal live poker games, would probably want in on the online action.
But other Internet entrepreneurs, some of whom have no history
or background in gaming, could easily enter the fray.
And since poker is considered a Class 2 game, a game in which
players play against each other instead of the house, Indian tribes
would be able to operate these state-only online poker sites without
renegotiating their compacts with the governor.
But Levine says the beauty of a one-state system is that the
Legislature and the governor will ultimately be able to control
those decisions.
“It would be regulated,” said Levine. “We don’t
know what the state’s piece will be, but it will be a regulated
entity.”
Levine said online gaming operated by California-based interests
would also ensure consumer protection for Internet gamblers.
“If you’re gambling in California with one of these
offshore sites, and they just decide not to pay you, you’re
out of luck,” Levine said.
“If you play legally, then there is recourse.”
For now, Levine and his staff are trying to determine the legality
and the feasibility of such a system. But Levine said if it seems
viable, his bill could evolve from a “study bill”
into an actual push to re-legalize Internet poker in California.
“It’s a study bill while we work out the details,”
he said. “But we might put some teeth into it if it looks
like we can do this.”
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