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Calif. Tribes Put Off Pushing Internet Poker Bill

The likelihood of an Internet poker bill passing the California Legislature decreased as the days of August passed, meaning that California’s American Indian tribes will have to stick with conventional revenue sources — traditional casinos — until at least the 2015 session.

Backers of one Internet poker bill threw in the towel. The fate of a competing bill was less clear, though some observers predicted it would not survive the legislative session, which ends Aug. 31.

Meanwhile, the Viejas Band of Kumeyaay Indians took a step toward changing its revenue picture as it signed a new compact with Gov. Jerry Brown Aug. 12. The Legislature has yet to approve the compact.

Like most other tribes, Viejas pays part of its revenue to the state government. The new compact converts the tribe’s fixed payment into a percentage-based payment.

Viejas may operate 4,500 slot machines under the new deal, paying 8 to 18 percent of the devices’ net win; the percentage will depend on the number of machines on the casino floor. The 76-page compact specifies other payments and spells out a variety of other agreements.

Viejas Chairman Anthony Pico said the new arrangement better fits the tribe’s circumstances in the current economy.

Compact Addresses Concerns

“This restated compact addresses the concerns we’ve had with our revenue share payment, shifting it to a percentage rather than a fixed fee. Ultimately, this is better for both tribe and state, enhancing our long-term stability, while allowing the state to share in the tribe’s success when revenues grow,” Pico said in a prepared statement.

Viejas, like all other California tribes, does not disclose its casino revenue. Governments have access to casino data but do not make it public.

Tribes to Deal with Online Poker Later

Many tribes, including Viejas, are interested in Internet poker, but there is still a debate in California over who may offer it — American Indian businesses or a wider variety of businesses.

Thirteen California tribes issued a statement saying they were postponing their efforts to pass an Internet poker bill until 2015.

“Our tribal governments have been deliberate and methodical in developing proposed legislation that would strictly regulate and limit Internet poker in California,” the Aug. 6 statement said.

“Instilling public confidence in the integrity of state-sanctioned Internet poker is a fundamental principle of ours. To that end and in consultation with the bill authors, our tribal leaders have concluded that rushing a bill in the closing days of this legislative session will not allow for the level of careful public examination and confidence an issue of this magnitude requires.”

The tribes issuing the statement included several in San Diego County: the Barona Band of Mission Indians, the Pala Band of Mission Indians, the Rincon Band of Luiseño Indians, the Sycuan Band of the Kumeyaay Nation and the Viejas tribe.

State Sen. Lou Correa, D-Santa Ana, was carrying the Internet poker bill.

A call to Assemblyman Reginald Jones-Sawyer, D-Los Angeles, who was carrying a similar bill, was not returned.

More than American Indian tribes are watching the events in Sacramento with interest.

In an Aug. 11 investor conference call, the CEO of Las Vegas-based Caesars Acquisition Co. (Nasdaq: CACQ), which has a business in Internet gambling, said his company was working toward passing an Internet poker bill in California.

“Obviously we’re disappointed that any potential law passage has been shelved for 2014, but we’ve already started our lobbying effort for 2015 quite heavily,” company CEO Mitch Garber told investors.

California tribes have come together over the last 18 months, and “I think we’re close to a bill,” Garber said. “It’s a huge market, and we want a piece of that market. We want to do business in California. And we expect in 2015 that it’s going to become a reality.”

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