The California State Governmental Organization Committee took serious first steps yesterday towards permitting state residents to use computers to legally wager on intrastate Internet poker. There is no active bill currently in the California Legislature, yet this informational hearing brought in players from around the globe. And, I don’t mean poker players.

There were experts from as far away as Sweden and gaming companies from as far away as Australia. All of them, in one way or another, looking for a piece of the pie. Apparently there is gold in them there felts, as Gerard Cunnigham, president of BetFair USA, which owns the TVG horse racing network, suggested that Internet poker in California would generate as much as $900 million in revenue annually.

Still, it looks like this is another issue that will polarize the many factions that are looking to divide up the revenue pie. Represented at the hearing were California cardrooms, racetracks, tribal gaming, legal experts, gaming experts, international gaming companies, problem gamblers groups and the political right. This was by far the most informative and well prepared group we have seen at any government hearings, including Barney Frank’s U.S. House hearings of the last several years.

The biggest hurdle that the California legislators may have to overcome is the 58 Indian tribes who have casinos throughout the state. Collectively the tribes pay a million bucks a day to the state for the right to have ‘exclusive’ right to the gaming devices (slots). However, they are split on the issue of Internet poker.

“We feel the games should be controlled by the tribes and the state – and taxed, said Robert Martin, chairman of the Morongo Band of Mission Indians, a powerful casino tribe located in Riverside County. However, another tribe from the same county fought against the proposal. “We simply do not agree with the consequences of authorizing intrastate Internet poker,” said Mark Macarro, chairman of the Pechanga Band of Luiseño Indians. Alison Harvey. executive director of the California Tribal Business Alliance, put it most bluntly stating several times that the introduction of Internet Poker would violate the current agreements and thus, the state would not be able to collect the $365 million that the tribes currently pay.

As expected the experts pitched regulation and taxation and the problem gamblers and the California Coalition Against Gambling spoke about the evils of expanding current gambling. Meanwhile, pretty much everyone else who testified before the committee gave solid information in their area of expertise; they also pitched the services of the companies that they work for.

Throughout the hearing off shore gaming companies were referred to as ‘illegals’. The companies that were present representing international gaming interests were Ladbrokes, BetFair and Paddy Power. All of which were more than happy to announce that they were ‘legal companies’, reiterating that they had never taken any bets from U.S. citizens.

John Pappas from the Poker Players Alliance was the only person who stood up and defended companies that currently offer poker to US citizens. He stated and restated with emphasis that these are companies that are legal and licensed in their jurisdiction. They are not operating illegally.

Still, throughout the nearly 8 hour session, the committee seemed to actually understand one fact. That Internet poker is currently being played by California residents and the state is not getting a dime of revenue from it. Powerful stuff to a cash strapped state.

State Sen. Roderick Wright, D-Inglewood, chairman of the governmental affairs committee that held the hearing, stated, when talking about people playing poker on the Internet currently, “That ship has sailed”. Wright added that he is not committed to one model, whether it be an ‘open market’, championed by all of the international testimony, offered from existing parlors and tribal gaming, or through a select number of licensees. ‘It would be foolish to do nothing,” Wright stated several times.

One of the most compelling arguments came from Leo Chu, a partner in the Lucky Derby card club and owner of Hollywood Park. He came with a speech that he said took two weeks to write and just put it down, going ‘off the cuff’. He said tribes and card clubs are well positioned if online poker became a legal market. He added that Internet poker players and land-based players are not quite the same player. He cited a failed attempt to put computer poker in Hollywood Park. “It did not bring anybody out of their house to the casino”, Chu stated.

This latest poker push is reminiscent of 1848 when people from far and wide came to California in search of a fortune. Back then they came from New York and Florida and the Midwest. Now, the burdening Internet poker industry is bringing them in internationally. The largest gaming companies in the world only show up when there are hundreds of millions at stake. Perhaps if the California tribes and the government listen to the likes of Chu, BetFair and Ladbrokes, they can keep the estimated $300 million from leaving the state every year and strike it rich in the process.