Interview: Tribal Chairman Mark Macarro, Pechanga Band of Luiseno Indians

27 October 2014

The largest casino operator in the state, the support of the Pechanga Band of Luiseno Indians has always been seen as instrumental to iGaming moving forward in California. In an exclusive interview, Tribal Chairman Mark Macarro emphasizes that despite the recent failure of legislative efforts, their appetite for limited, strictly regulated iPoker remains undiminished, and that the progress tribes made coming together to agree on a unified bill should not be underestimated.

How has the failure of iGaming to gain passage in California affected the appetite for iGaming among the tribes?

It’s too early to tell. But obviously the Internet isn’t going away any time soon, so there’s a very compelling reason to regulate iPoker as effectively as possible. There’s a great deal of interest in that regards. As far as Pechanga is concerned, we remain committed to legislation that provides for strictly limited and regulated online poker in California.

You worked long and hard on agreeing unified bill language,but eventually concurred with the authors that more time was needed. Which issues remain unresolved and therefore key to getting this done in the next political year?

We understand that state legislators and the state Department of Justice have regulatory and legal questions, and likely need more time to work through those things. We’re also mindful that we need to have conversations with the horse racing industry about funding. And of course there are the bad actor provisions, that’s also a topic that will undoubtedly be revisited.So, in a nutshell, it’s those three issues.

What is the timeframe you expect iGaming to be back on the agenda in California, and do you agree with some experts that this is at least a two-year setback?

Our outlook is not as melancholy on the prospect of bill passage. We anticipate that legislation will be introduced as early as December. And of course, the gavel on the new session doesn’t actually come down until January. For practical purposes, the legislative work does begin in December. So, as soon the earliest possible opportunity arises to update,that’s when somebody is going to introduce something. That’s our expectation. So, we are going to work towards passage of the bill that provides for a limited and regulated online poker framework.

Which of the proposed bills in play, Senator Lou Correa or Assemblyman Reggie Jones-Sawyer’s, are the Pechanga most aligned with?

We need to take stock of who is left standing. Senator Lou Correa is departing from the State Senate, so that leaves a void and a question mark there, because we don’t yet know who is going to fill his shoes on that side of things.We probably expect Reggie Jones-Sawyer in the State Assembly to continue his efforts at being the bill author in his house. That’s the landscape as we know it right now, and I personally expect other legislators to step forward, to hold the bill up and say: “I will take the lead on this.” For big issues such as this, there never really seems to be shortage of champions or would-be champions. We looking forward to sorting through that, and there will be plenty to sort through. But people are not shying away from that.

Is the much-publicised failure of NJ to reach its expected revenues from iGaming cooling off the appetite for iGaming in California?

For some, it raises concerns, but our view is always long-term, and the Internet is not going away any time soon. So there remains a very compelling reason to regulate iPoker as effectively as possible. It’s also worth considering that Pechanga has not suffered from the irrational exuberance which posits that iPoker is simply a cash cow comparable to what our brick and mortar facilities generate. For the Pechanga, we view Internet poker as a necessary step to take in order to remain competitive for the long term. So, this initial rollercoaster that New Jersey and the other states, but mostly New Jersey, seems to be on,we are watching that, but we see that as real short-term stuff.

What does the Santa Ysabel’s decision to go online despite a lack of state regulation mean for tribal gaming, and could it be a catalyst for more tribes to venture online?

Look, we wish Santa Ysabel the best. They are about 60 miles drive from us. Their direction is not however one our tribe would pursue. We continue to see greater certainty and prudence in working with the state on a government-to government basis, to provide for a strictly regulated and limited online poker environment, which is a view shared by most other tribes with large brick and mortar operations in California.

What has the purchase of PokerStars by Amaya done to change the tribal and state position on PokerStars entering the California market?

Nothing. That’s my one-word answer.Nothing.

The Pechanga runs one of the largest and wealthiest Indian gaming facilities in California,making you a very attractive partner for any iPoker provider. Why have you not followed several of your peers and confirmed a partner ahead of the market opening?

The truth of it is that we haven’t publicized our efforts. When the time comes, we will announce our plans. Pechanga will be ready to effectively compete. But our focus has been and continues to be on the passage of the bill that strictly limits and regulates online poker, not publicising our internal workings. So rest assured, that’s the primary difference - we haven’t publicised that.

Do you think California will be a more successful iteration of iGaming than has been the case in Nevada and New Jersey, and why?

The answer to that question is that we certainly hope to be more successful, particularly given the population. Let me point out that Los Angeles county alone, which is probably 45 miles away from the county the Pechanga sits in, has nearly as many people as the states of Nevada and New Jersey combined. And there are 58 counties in the state of California! 

Will California tribal gaming be looking towards interstate and even international compacts, and this been part of discussions?

No. I would say absolutely not. Our focus is on providing limited, regulated online poker on an intrastate basis. We are focused on California.

Why do you support a poker-only bill at this time, as online casino represents such a great opportunity for stakeholders in California?

That’s probably the subject of a half-day symposium, where we could talk about the history of gaming in California, and would also have to consider the history of gaming since 1988 in the United States, and all of the issues around tribal state compacts.But the short answer is this. We’ve been consistent in saying that it is critical that online poker be authorised in a manner that upholds the commitments that we the tribes have made to the voters of California, on at least three separate occasions, that the gaming throughout the state would be limited. In particular, that Class III casino style gaming would be conducted on Indian reservations, and not in people’s living rooms.

What hurdles exist politically for a unified tribal position on iGaming in California?

We have a unified bill, that is supported by many of the experienced, respected and influential tribes in California. The progress tribes made coming together earlier this year should not be underestimated. Frankly, a lot of the experts were surprised to see this group of tribes come together as quickly they did during the legislative session. I think the fact that they couldn’t believe they came together still has people underestimating the fact we do now have that unified position.

NIGA shared draft model federal legislation on tribal Internet gaming with its members last year. What is the Pechanga’s position on potential federal, as opposed to state, regulation of online gaming?

So, I don’t believe that federal legislation has ripened yet. For example, there has not been a hearing on any one of the Internet gaming bills. But we are headed into a high-stakes mid-term election in November in the United States, with control of the Senate at stake, and a post-election lame duck session, where anything could happen. So there are a lot of conversations that need to happen among the conflicting voices in Congress, from Reid and Graham in the Senate, to Barton and Chaffetz in the House, there are those polarities right there. So, if there is federal legislation, we could support a bill that contained a ban on Internet gaming except for iPoker, and left the establishment and the structure of regulation up to the individual states.

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