PokerStars eyes California with Morongo and card clubs partnership

24 April 2014

PokerStars and California’s Morongo Band of Mission Indians and the state’s three largest card rooms – the Commerce Club, the Hawaiian Gardens Casino and the Bicycle Casino, have confirmed their partnership that will see PokerStars supply and operate a California-licensed online poker site once regulation comes into force in the US’s most populous state.   

News of the agreement between the different parties first came out in late March, its official announcement was made yesterday (Wednesday) to coincide with the hearing organised by California’s Assembly Committee on Governmental Organisation on intra-state online poker regulation.  

The key issue in California’s regulatory debate centres on the ‘bad actor clause’ included in the poker bills that have been put forward so far. The clause would forbid companies such as PokerStars that continued to operate in the US after the passage of the Unlawful Internet Gambling Enforcement Act in 2006 from applying for a licence in the state.

Most of the other California tribes and their partners are in favour of the ‘bad actor’ measures included in the two bills, conscious of the fact that a Californian online poker market that includes PokerStars would be virtually impossible to live with in terms of competition.

Robert Martin, Tribal chairman for the Morongo Band of Mission Indians, testified at yesterday’s hearing and strongly condemned the concept of the ‘bad actor clause’, saying it would limit and restrict the sector in California.

But representatives for the United Auburn Indian Community and Pechanga Band of Luiseno Indians among others “repeatedly stressed the importance of maintaining the “integrity” of California’s gambling industry”, according to Online Poker Report.

The site added that “PokerStars was not mentioned once by name during the back-and-forth over bad actors despite being obviously central to the debate. All involved went to great lengths to refer obliquely to PokerStars, even if doing so was far more cumbersome than simply saying ‘PokerStars.’”

PokerStars has so far been excluded from regulated online poker in Nevada and New Jersey due to similar ‘bad actor’ legislation and pressure from competitors, its partnership with California’s Morongo Band of Mission Indians and card rooms is another attempt at re-entering the regulated US market.

The world’s biggest poker site’s lobbying firepower is undoubtedly strengthened by yesterday’s agreement, although opposition from the other parties involved in the debate will also be strong. The ‘bad actor’ issue could slow down the timetable for a regulated Californian market considerably unless agreement is reached on it. 

Referring to the issue in the statement published by the groups yesterday, Robert Martin commented: “Efforts by a select few interests to rewrite longstanding and effective policy in order to gain a competitive market advantage or to lock out specific companies is not in the best interests of consumers or the state and will be vigorously opposed by our coalition, online poker players and many others.”