It’s going on ten years now since online poker legislation in California first became a topic. The single biggest determent preventing legalization of online poker is a consensus agreement amongst California’s Indian tribes. There are currently 63 casino tribes that generate over $8 billion a year in gross revenue. Anyone associated with the gambling industry agrees that the potential for the online poker market in California is tremendous. So why can’t the tribes come together and an even more urgent question – is the window of opportunity closing on the nation’s largest gambling market?
A combination of the internet, new technology, growing competition, and changes in the gambling habits of younger consumers are all conspiring to close the window.
The chairman of the California Nations Indian Gaming Association (CNIGA), Steve Stallings, said in their recent annual meeting, that “The nine-year experience of trying to get internet poker legalized in California is a sad indicator of the complexity of the learning curve and competition we face in protecting and expanding our gaming status. It’s also a commentary on the need to settle our differences and compromise in private, among ourselves, and unite on policies and issues.”
Of the 63 casino tribes, it is generally agreed that there would need to be a coalescence of at least sixteen of California’s most politically connected casino tribes in order to have a legitimate chance of enacting an online poker bill. It would require a two-thirds vote in the state legislature. The most recent attempt at passage of a bill in 2016, failed when tribes couldn’t agree over licensing suitability for one of the giants in the international online poker market, Amaya/PolerStars.
There is not much optimism left amongst legislators after having so many attempts at passage end in failure, but there still is some hope. The Morongo Band of Mission Indians chairman, Robert Martin, who is business partners with PokerStars, three other card clubs and another tribe, says that he will push online poker legislation in the 2017 session coming up.
CNIGA Chairman Stallings says the tribes should stop blaming PokerStars for failure to get internet poker legislation approved. In an interview, he said, “Having had the experience we had with internet poker, we have to back up and look at what happened and ask ourselves, ‘Why did we fail? You can blame it on PokerStars, but I think it’s bigger than that. It’s the fact tribal leaders don’t grasp the importance of technology to our business. It doesn’t necessarily mean pushing internet poker, though that was the first thing out of the gate.”
That is an important fact that Stallings brought up – that the tribes are not embracing new trends and technology. Social gaming, daily fantasy sports, esports and sports wagering are all areas in which the tribes need to address. If not it will just be a repeat of the online poker effort. But in fairness to the tribes, as government entities, they have to navigate through a maze of political and regulatory bs in order to advance an issue. So, for them, it’s life in politico land. The Indian Gaming Regulatory Act (IGRA), applies to casinos on tribal trust lands and limits the scope of Indian gambling.
Stallings went on to say that tribes have to embrace technological advancements and new forms of wagering to remain competitive with lotteries, commercial casinos, card rooms, pari-mutuel racing and other segments of the legal gambling industry. “Commercial gaming is doing it and doing it faster. If we don’t come to this realization we’re going to be left behind. Sport betting is something we may want to embrace. So how do we in California position ourselves, collectively, as tribes – CNIGA members and non-members – to make sure that’s an opportunity for our industry? Or maybe it’s a strategy where we say we don’t want that to happen. If the tribes reach that decision, how do we collectively fight or delay implementation of sports betting until we’re ready? It’s the same analogy for internet poker. We probably weren’t ready” said Stallings.
There are 243 federally recognized tribes across the U.S. that has casinos. Most of them lack online infrastructure and financial resources to support the new technologies of the online gambling industry. The failure to regulate online poker will be a microcosm of things to come if the tribes don’t settle their differences and get on the same page.
With the explosion of mobile devices being used to access the internet, the gambling industry is changing. Millennials, who are glued to their mobile devices, are becoming less interested in banks of slot machines in a brick and mortar casino. They are more apt to seek out interactive and skill games that are found on the internet. The casino floor is changing along with the games and the people who play them.
As Stalling noted, “The tribes have to look at where the industry is going, long-term, and how do we all get there together. I don’t mean just CNIGA, but all tribes. We are a trade association first. Yes, there’s a political strategy. But tribal gaming is an economic force and we need to think about it that way. Even if we don’t get into internet poker, we need to be thinking about technology and how it is going to affect our business.”