Here is a thought on a compromise that could appease all the tribes:

Instead of a 5% gross gaming revenue tax on the Internet poker licensees, make it a 15% gross gaming revenue tax (like NJ). Then distribute the extra tax money among all the federally-recognized CA tribes, per capita (or some formula approximating tribe size to avoid too much squabbling over who is entitled to be a member). That way a bill could be implemented with licensing for race tracks and no bad actors clause, but all the tribes still benefit from the open market. This also solves the issue of the smaller tribes that can't afford to participate due to the high licensing fees, start-up costs and marketing costs, but are supposed to benefit under IGRA from any gaming expansion in the state.

Or, a far less complicated way to appease everyone would be to adopt language like that in WA's HB 1114 . . .

The $10 million dollar entry point is itself anti competitive, as are exclusive partnerships between the service providers and in-state casino interests.

Separate the service providers from the casino interests, allow the providers to market their product directly to tribal casinos, licensed card rooms, and yes even the race tracks. Then those tribal casinos, licensed card rooms and race tracks hold the burden of marketing to the players, with all of them able to offer the best products.

The state could still charge the providers, as in Pokerstars, PartyPoker, and 888poker, the ten million, and apply a modest fee to the card rooms, and a reasonable tax rate.

It's a win/win/win . . . . players have access to the best products, operators are able to retail the best products, and the operators have access to the market. It's not perfect for any of the operators, but it is better than nothing.

And for the players, they get the benefit of the competition between the card rooms, who will have to do more to attract players to their site than just "we have Pokerstars and they don't"

I still don't really get the difference. My understanding of your system is:

1. Sites get licensed by the state, and pay licensing fees.
2. The licensed sites can contract with any of the existing casinos/cardrooms(/race tracks) to run a skin on the site provider.
3. The skins split rake with the site, per whatever terms are set in their contract.

In practical terms, how is this different than the current CA proposals:

1. Existing casinos/cardrooms(/race tracks) get licensed by the state, and pay licensing fees.
2. The licensees can contract with any state-approved site providers to run a branded site for the licensees.
3. The licensees and sites split rake, per whatever terms are set in their contract.

Are you suggesting that under your proposal the state would mandate that any licensed site provider would be required to partner with any casino/cardroom(/race track) that approaches them and asks to partner with them? How would the state mandate the terms of this private-enterprise contract? Would a site have to offer the same terms to every casino/cardroom(/race track), or maybe the same preset tiered contract term based on volume? Wouldn't this eventually just lead to a one-site monopoly if everyone can just automatically get the same terms with the best site in the state?

How would this resolve any of the current divisive issues among the tribes: bad actors clause, excluding race tracks, exclusion of small tribes.

Edit: In other words, what's the difference between the group of casinos/cardrooms going to PokerStars and saying "We have a state license - let's contract to run a site for us"; or PokerStars going to the group of casinos/cardrooms and saying "We have a state license - let's contract to run a site for you"?

Short answer is yes (Sec.2 (4) - http://lawfilesext.leg.wa.gov/bienni...Bills/1114.pdf )

How the rule is worded would be up for some debate, but I would suggest that if a qualified entity can demonstrate that it meets minimum criteria to operate a skin, then they should be able to offer a skin of their choice of networks, with a revenue share on par any other skin on that network.

The networks would certainly have a say in what that minimum criteria should be.

If Pokerstars is going to be a monopoly, it will happen either way, whether they share revenue with one partner or five. The network solution doesn't dilute or improve the network's market share, it dilutes the card room's share.

Otherwise, it comes down to whoever partners with Pokerstars first is the winner, which makes everyone else opposed to creating the market to begin with. So compromise is essential.

As for PartyPoker and 888poker, they will have to have something sweeter to offer potential skin operators, lest they be left out of the market completely.

Here is why this is important, from my perspective here in WA . . . If Pokerstars makes a deal with the Tulalips to be their partner exclusively, it is 100% certain that the Muckleshoots will oppose any bill that would allow this. As the Muckleshoot Reservation is wholly within the 31st LD, and the Chair of the committee the bill has to go thru represents the 31st LD, ipso facto, no bill that allows this passes. Ever.

If the reverse happens, and Pokerstars were to partner with the Mucks, the entire WIGA would oppose. Same result.

If both the Mucks and the Tulalip can offer Pokerstars, I think it's likely we could get a bill thru. This is the heart of my proposal.

Someone has to be the arbiter and decide, these divisive issues are not going to be worked out any other way. That is why we elect leaders. What's going on in CA right now is a joke, they are just milking the process at this point. Funny thing about politics, the money is in arguing over the issue, not resolving it.

The latter works fine, and I bet if they said that to Pechanga we would be past the 'bad actors' debate.

It's only a problem if Pokerstars tells you 'no, I have a deal with so and so and can't help you'

You're now at a disadvantage because you can only offer an inferior product, and you have no other options, so no leverage to force Party and/or 888 to improve their product or if nothing else a better revenue share.

Not all of the entities fighting to be a part of online poker in CA are going to be viable opeartors. Even with networks, at most a dozen to maybe 20 skins will the market support. So most of the fight is about being excluded by statute.

Excluded by statute is the problem with these bills, it guarantees a legislative fight, and that is good for business when your business is legislation. But if we can get passed the exclusionary language in the bills, and move on to licensing requirements, the market will work itself out.

So then your proposal doesn't actually resolve the issues in CA (bad actors, race tracks) that are stopping passage of a bill. You are just saying that the lawmakers should take control and adopt your method as you think yours is a better way to run the market than the current CA proposals. But if it's just a matter of the lawmakers grabbing the reins as arbiter then they could just as well adopt one of the current bills and thus override the issues without resolving them.

My proposal above (splitting up some of the gaming tax revenues among all CA tribes) is at least a method of compromise on the issues.

It won't make everyone happy, but it does resolve them:

On Bad Actors - We all know this is about competitive advantage and not because Pokerstars is bad. Those opposed to Pokerstars' entry into the market are opposed because they don't have access to the same quality product as those Pokerstars has deemed worthy.

If the Pechanga coalition was still opposed to Pokerstars, despite being able to partner with them, then it is hard to argue that the reason for pressing for Bad Actors is anti-competition and not legitimate concerns.

On the Tracks/small tribes/small card rooms - Remove statutory exclusions and let all viable licensees, including the race tracks, have at least the opportunity to apply.

Someone is going to cry no matter which way the legislature goes. But this network approach is fair, it is inclusive, and it is competitive. It also gets the ball rolling.

This is what has to happen in order to move the ball, although I disagree that it doesn't resolve the issues. Deciding one way or the other is HOW you resolve the issues, that or you wait until one side gives up. That will be a long wait.

It surely is a way they could go, but it would be convoluted and not a market solution. You essentially have the rich working hard for the money and the poor on the dole.

I think the "bad actors" argument is more along the lines that PokerStars/FTP gained a large competitive advantage because they operated outside the law when everyone else stayed within the lines. And it's more a fear of access to players (the Pokerstars/FTP player database) than product quality.

Giving the tribes, cardrooms and race tracks equal access to Pokerstars does level that access, but essentially hands the total market over to Pokerstars. I don't think under your proposal that the competition (betfair, bwin.party, 888) has any shot at being competitive, to the detriment of players.

I don't disagree. I'm just saying that you aren't resolving this issue with your proposal, just steamrolling it.

If by "resolve the issue" you mean implement a proposal regardless of the objections, then yes, passing your proposal "resolves the issues". But when I say "resolve" I mean come to some agreement among the stakeholders on a compromise position that addresses their valid concerns.

That's due to IGRA, which essentially put the Indian tribes on the dole by giving them rights to all gaming. It was a federal solution to tribal poverty, and thereby we have to consider the financial welfare of all tribes in consideration of any gaming expansion. It is indeed convoluted and counter to pure open-market principles, but it's both the law and the intent of Congress.

the obstacles are not such that there is a middle ground to be found, one side of the impasse is going to have to cede their position for the stakeholders to come to an agreement. That is highly unlikely to happen

iPoker Hiccup in California

Which is why I suggest a radical solution like tax-revenue-sharing amongst all the tribes. Complaining about the way the legislators don't govern properly (i.e., force a solution on the tribes) may be accurate but it is ineffective for California. Each of the three CA tribal coalitions have the political clout to block a bill. A bill simply won't get passed unless all three coalitions come to an agreement. Your solution (licensing platform providers instead of licensing tribes/cardrooms/racetracks) doesn't get the parties any closer to such an agreement.

I don't see yours as doing that either. You are arguing for some sort of welfare system for the 'little guys' paid out of the profits of those who earned them. Why would anyone prefer supporting them over allowing them in the market to earn, or try to earn, their own profits? It doesn't make any sense

l will grant you that forcing my approach would be no different than forcing your approach, it still will take leadership, someone to take it by the horns and be the decider. I'm not saying your point nor your proposal are invalid or stupid. I see your point of view, I simply disagree on principle.

The crux of my argument is that your solution is a welfare state solution, which may even be something liberal California lawmakers jump on. My solution is market based, where there are few barriers to the market, and only the strong will survive.

We just have different points of view

Indian gaming in itself is, at its heart, a welfare system. My solution dovetails into that quite nicely. Personally I would prefer an open market system, but we've learned that it just won't fly in California. The liberal California lawmakers and the factionist Indian tribes are more likely to jump on a solution which shares the wealth, imo. I'm just trying to find an out of the box solution that will carry the bill forward, since the obvious reasonable solutions aren't making the grade.

Revenue sharing has been a part of Major League Baseball for close to two decades. Welfare?

It is not a perfect solution, but it seems to solve more problems than it creates.

It angers me so much I couldn't already have moved to ca to play online

Why cant we just screw over that native americans? i thought this was america

Things are looking up:

Pechanga Group Says Tribes, PokerStars Could Trump Tracks On iPoker

didn't they say the same thing last year too?

I don't think they did. I recall Pechanga ALWAYS being against Ipoker (i live 20 mins away from the casino). Their goal has always been to prevent it entirely, hence no software dev. or even looking into partnering with existing providers. They have had the "my way or the highway" attitude the whole time and been pretty blatant about it. I was shocked to hear this news, and I see it as a game changer for the players. IMO one of the following happened

1. literally every single tribe in the state got pissed off @ them and wants regulation so Pechanga was left outside and basically forced to comply or

2.. Something happened behind the scenes or with legislature that told Pechanga that they don't run the whole state and that they needed to change their position. Amayastars doesn't have enough $ to bribe/sway Pechanga or even close from what I understand so that's off the table.

What I am mainly concerned about is CA going a 1 network model and tribes, card rooms getting skins, with the tracks getting profit shares. That seems to be the way things are going, only problem with that one for the players is the monopoly it'd create for Tribe Amayastars. 888 & PP already have contracts with casinos here but.. Once(now that) the big $ teams up and shows everyone that the 1 network w skins model would be most profitable, fastest to get going, easiest to enforce etc I see the tracks accepting profit sharing and the tribes getting out of existing contracts with other providers. Or the tribes could keep fighting amongst themselves like they have done for 100s/1ks of years? Idk just my 2 cents.

It should be obvious to everyone by now that the network model is the natural direction the in which the industry will evolve, it is the only way to serve the many and varied in-state gaming interests in American states.

Pokerstars still has unmatched player loyalty, and if Pokerstars is going to become a monopoly in a state, it is going to do so whether they have five partners or twenty. The only difference will be in how many 'partners' enjoy a revenue share.

Each skin added to a network waters down the skins' revenue share, the network will, for the most part, still hold the same market share.

The 'other' providers will either have to step up their product, or they will have to offer a better revenue share, in order to get skins to go their way. This will not be the case if Pokerstars has limited/exclusive partners and the many other Tribes/card rooms are left with no choice but to partner with a 2nd tier provider. This guarantees 2nd rate operators a seat at the table that they, frankly, haven't earned with a quality product and/or service. But if those other Tribes/card rooms have the choice of also running a skin of Pokerstars, the 2nd tier operators will have to improve their offerings.

It is actually better for competition this way

I know you like the all-access network model, but there is one aspect that you leave out of your arguments: player choice. While the "other tribes/cardrooms" may be forced to choose a 2nd-tier provider, the players don't have to. This is what drives competition and innovation - consumer choice. If all the tribes/cardrooms don't have equal access to PokerStars, the other providers still have to improve their product and/or offer bigger player incentives to compete or else they will have a small market share . IMO, free market choice is much better for a competitive market and consumer benefits than forced equal-access. (Although I concede that perhaps in WA it will work better the other way.)

all the competition and free market benefits remain, with only one distinction. You have providers competing with each other for customers (card rooms), and not against those card rooms. The card rooms, in turn, compete with each other for players, not against the international providers.

Also I would just add that the whole 'competition benefits the consumer' argument is a little thin. It is a bit nutty to think that the market in California is going to dramatically shift the competition that currently exists between these international providers.

If every CA tribe/cardroom can get the same deal from Pokerstars, as mandated under your system, and initially 90%+ of the players choose Pokerstars skins because the other providers haven't bothered yet to catch up in quality and offerings, won't all the tribes/cardrooms simply move to PokerStars? It won't be much different without mandated all-access to providers, but at least the other providers will have some cardroom customers to keep them in the marketplace while they improve their product.

If there is a rush to skin on a Pokerstars network, then the other operators will have to offer tribes/cardrooms something more to sweeten their offer, whether that is an improved and more appealing product or a greater revenue share. They will have to compete with Pokerstars for customers.

They will always be able to find someone to operate a skin. They manage some market share in the rest of the world, they will here as well.

But why do you assume 888 and Party will improve their product? They compete with Pokerstars on the RoW market and it doesn't compel them to improve, so there is little reason to think it would be different in a ring fenced CA market.