The battle lines between the Pechanga Coalition and both PokerStars and the horse racing industry have been clearly defined for years and there appeared little hope for a compromise between parties. That was until the informational hearing on Wednesday in the California Assembly GO Committee. For the first time since online poker has become a topic of discussion in California, a reasonable compromise was offered to help resolve issues surrounding horse race track participation. More surprising was the author of this compromise; the Pechanga. Pechanga Chairman Offers Two Options for Race Track Participation During Wednesday’s hearing, Pechanga chairman Mark Macarro offered a pair of potential solutions for including the horse racing industry in California iPoker. According to Macarro, “We are realistic about the politics of this issue. That is why Pechanga is prepared to support other opportunities for the racing industry to participate and benefit from online poker. We respect the sport of horse racing and recognize the importance of the jobs that rely on the industry. That’s why Pechanga can support legislation that specifically shares revenue derived from online poker for the benefit of the racing industry.” For those unfamiliar with revenue sharing, look at the model in play with Major League Baseball. In their revenue sharing deal, the top teams in baseball share revenue with the other clubs, leveling the playing field to a degree. While revenue sharing will never make the Marlins into the Yankees, sometimes it is enough to help a smaller team to compete. Revenue sharing was not the only option offered during the hearing. Macarro also offered an affiliate based system. He stated that, “the racing industry also has the means to enter into private partnerships with licensed operators to participate as affiliates. Racetracks can enter into arrangements whereby they refer their web visitors and players to poker websites for a fee.” The affiliate system is what is already used around the globe by most sites. On the surface, it would seem that the horse racing industry would only get a “finder’s fee” for new players but don’t rule out the possibility of this being expanded into a rake sharing deal where race tracks get part of the profits generated from their signups. Racing Industry Doesn’t Appear Interested but Maybe They Should Be Keith Brackpool, west coat chairman for the Stronach Group, was the horse racing industry rep at the hearing on Wednesday and was quick to dismiss the proposal by the Pechanga. Brackpool stated, “I appreciate the offer made by chairman Macarro, but we don’t believe at this stage that a level playing field would be the other part of the gaming community having a license and determining what morsel of that we would receive. We want a level playing field where we have the right to apply and receive a license on the same basis.” While his position sounds valid on the surface, if one looks at how the industry has progressed in other states, the horse racing industry may want to reconsider. First, consider the fact that despite their increase population, only a handful of online poker sites will be truly viable in the state. Race tracks will have a hard time competing against established brands and could put up substantial funding towards profits they may never achieve. Serving as an affiliate would be among the most cost effective solutions that they could employ as they could choose which online partner they want to support and then focus their marketing towards that avenue. They can also work with their partners to maximize promotions and maybe even draw business towards the tracks. PokerStars would certainly figure out a way to incorporate horse racing into their poker games and could be a match made in heaven. The most encouraging news about this offered compromise is that it happened. It is the first time that the Pechanga have tried to move forward in any meaningful way towards a resolution of issues. Granted, there is still a long way to go towards getting a bill passed but this is actually a step forward, even if it is a baby step. Previous Post Next Post pechanga|pokerstars About James Guill Originally a semi-professional player, James transitioned to the media side in 2008. Since then he has made a name for himself reporting for some of the top names in the industry. When not covering the poker world, James travels around central Virginia hunting for antique treasure.

After weeks of inactivity, we finally have some movement on the California iPoker legislative front. On Wednesday, Online Poker Report revealed that joint hearings were in the works regarding internet poker regulation in the state. On Thursday, Chris Krafcik of Gambling Compliance Inc. revealed the dates of those dates via Twitter: The first hearing, Overview of Gambling in California – Legality, Authorization and Regulation, will be held on May 20 and has a 1:30 pm PDT start time. This will be followed up with a hearing on June 24 titled The Legality of Internet Poker – How Prepared is California to Regulate It? This hearing also has a 1:30 pm PDT start time. Agenda on Hearings Unclear At present, all we know is that hearings will be taking place but the purpose of these hearings is uncertain. Furthermore, little is known regarding who will testify at these hearings. It can be assumed that representatives from major stakeholders as well as anti-iPoker lobbyists will testify at one or both hearings. The second hearing poses a question that many in the United States are wondering at this point. Is California prepared to regulate online poker? Looking at the constant bickering between stakeholders, one has to wonder if these hearings will do little more than shine a brighter light on the issues currently being debated. Did Pennsylvania Influence California to Hold Hearings? In recent weeks, Pennsylvania has been making huge strides towards online gambling regulation. After holding hearings with casino executives in March, the Pennsylvania House Gaming Oversight Committee held their first iGaming hearing on Thursday. This hearing was seen as mainly positive with testimony covering topics including gaming security, geolocation, regulation and even how many jobs iGaming in PA would create. Meanwhile, California has largely been moot outside of rumors and speculation. Pennsylvania’s push to legalize the game may have been an influencing factor forcing lawmakers in California to get the ball rolling on hearings. Unfortunately, there are too many issues currently needing to be ironed out to believe that California will be able to legalize iPoker in 2015. Tribes have yet to reach any type of a consensus regarding iPoker and bad actors. The rumored partnership between the Pechanga and PokerStars doesn’t look to have gone anywhere and some have even claimed that this was a false rumor. Then there is the matter of the horse racing industry. Pechanga is against allowing horse racetracks from participating despite the belief by many that iPoker cannot move forward without their involvement. Furthermore, Governor Jerry Brown has stated that he would veto any iPoker bill that didn’t address the horse racing industry in some fashion. Note that he said address the industry. It doesn’t necessarily mean that racetracks have to be licensed, but some type of arrangement has to be made. One proposed arrangement was to provide revenue sharing to racetracks, a proposal that the horse racing industry is presently against. Granted, the first hearing is a month away and this leaves parties time to possibly work towards a compromise. If California wants to legalize iPoker in 2015, parties will have to move swiftly in order to achieve this goal. Otherwise, they may have to pull a page out of the Chicago Cubs playbook and “wait until next year.” Previous Post Next Post California|online poker legalization|pokerstars About James Guill Originally a semi-professional player, James transitioned to the media side in 2008. Since then he has made a name for himself reporting for some of the top names in the industry. When not covering the poker world, James travels around central Virginia hunting for antique treasure.