There are still some “major issues” with a bill in California to legalize Internet gambling, a source close to the legislation told Card Player. The measure was introduced in late February and remains active in the legislature.
 
If enacted as is, poker would be the only game allowed for two years. After the waiting period is over, the state could phase in other games. Opponents of the bill say online gaming should never be expanded beyond poker, according to the source.
 
The second front of opposition comes from some tribal casinos. The source said some of the language that restricts eligibility has been contested, while some tribes don’t want race tracks to participate in the industry.
 
“You can’t make everyone happy. It’s impossible,” the source said. “Lawmakers are concerned with what is beneficial to the state, not just to the tribes, card rooms or race tracks.”
 
Under the current legislation, there would be no limit on the number of licensees. According to the source, California expects eight to 12 applicants, but it is possible only four or five stay in business.

The California Tribal Business Alliance put out a statement in February, taking aim at who would be allowed entry into the industry.
 
“The legislation as described would also let out-of-state interests come in to essentially extract revenue from California with no real constraints other than that they ‘partner’ with a legal entity,” said Leslie Lohse, Chairwoman of the CTBA.
 
Lohse called the bill an “inferior legislative product” and a “harsh slap in the face” to California tribes. The CTBA did not return Card Player’s request for comment on Tuesday.
 
California’s tribal brick-and-mortar operations took in $6.78 billion in 2010, which accounted for 25 percent of the U.S. Indian gaming market, the Las Vegas Review-Journal reported earlier this month.
 
In early February, gaming experts converged on Capitol Hill to talk about how a federal online gaming bill would impact tribes. Attorney I. Nelson Rose testified that a large licensing fee in California would leave many tribal casinos out in the cold.
 
The California bill would require each site to pay $30 million, which would be credited against monthly fees on revenue. A bill that died in August 2011 had proposed $50 million.
 
Despite the difficulty with state proposals, tribes have been fiercely against some of the language that has been proposed in the U.S. Congress. Ernie Stevens, Chairman of the National Indian Gaming Association, testified that Rep. Joe Barton’s (R-TX) bill “violates the core principals of tribes” to act as their own governments and decide upon appropriate taxation measures.
 
The source said California isn’t “stalling” with its legislation. Lawmakers are being very “deliberate” as the dialogue continues. The goal is to pass the measure in 2012.

Robert Smith, Chairman of the CTBA, said last year that many stakeholders would be “irreparably harmed” if a bill that was then on the table was rushed.
 
“It’s a matter of time to see if Senators [Darrell] Steinberg and [Rod] Wright are willing to compromise,” the source said of the situation this time around. Card Player has been unable to interview either lawmaker.
 
The bill is currently being amended and will be acted upon in a Senate committee in either late April or early May.

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