Internet poker: No cash cow for state says California Tribal Alliance

[clevfan]

February 5, 2010


Internet poker: No cash cow for state says California Tribal Alliance

By Debra Gruszecki
The Desert Sun

The California Tribal Business Alliance on Friday added firepower to its stance against the online poker initiative by the Morongo Band of Mission Indians and California card rooms.

The alliance released a report by Michael Genest, of Genest Consulting, disputing the prediction that intrastate poker initiative would generate $50 million in revenue to the state.

Alison Harvey, executive director, said the monopoly poker initiative also is likely to siphon $365 million a year out of the state’s general fund if tribes operating Indian casinos under 2004 and 2004 gaming compacts invoke the exclusivity clause.

“And that’s in a down economy,’’ Harvey said.

The revenue predictions from Genest, former director of the California Department of Finance, come just days before state lawmakers plan to hold an informational hearing on a proposal by the Morongo Band of Mission Indians and a consortium of card clubs to conduct an intrastate poker site.

The state Senate committee hearing is set for Tuesday.

Patrick Dornison, a spokesman for the Morongo, called the report a “politically motivated” document.

It was “cobbled together at the last minute with the intention of negatively influencing the Senate hearing next week on Internet poker,’’ Dorinson said.

The California Tribal Business Alliance projected, as part of the study, that the total gross gambling yield attributed to Internet poker played anywhere in the world from terminals in California in 2011 will be $536 million.

“If all players moved to the proposed new, single-licensed entity’s site, and continued to play at the same level, a 10-percent fee would generate $53.6 million,” Genest’s report said.

Harvey said the Morongo tribe’s estimate is not realistic.

It assumes all Californians now playing on offshore sites will redirect their play to the new California site, she said. Even if they switched, it’s likely the gamers would find the California site to be unattractive because “you don’t pay taxes” on offshore sites.

Liquidity is another issue, she said, as is the lack of high-stake bonuses and incentives to get California gamers to jump into the online pool. Offshore, Harvey said there are “huge numbers of people” making wagers simultaneously, so offshore wagering is more attractive.

California would have a hard time competing with these shark-to-fish ratios, she said. “We can’t see them getting over 30 percent of the market.”

Dorison took exception with the California Tribal Business Alliance stance. It assumes that people will continue to play illegal, offshore sites, thereby, decreasing potential revenue to California.

“Perhaps the (alliance) should keep up on current events,’’ he said, noting a crackdown by Mastercard and VISA on the use of their cards on offshore sites would leave poker players in the United States unable to play.
“This goes to what we have said all along that California needs a regulated intrastate game that will offer consumers protection from unscrupulous operators and maximize revenue to the state,’’ Dorinson said.

[Don King's Barber]

At least Awnold is leaving, the Indians OWN him, hopefully Jerry Brown will stand up to them...

[clevfan]

February 9, 2010


Nine tribes send letter opposing Internet poker

The Desert Sun
Debra Gruszecki


Nine California tribes sent a letter of opposition Monday to members of the Senate Governmental Organization committee about proposed intrastate Internet poker.

The committee is having a hearing on the proposed initiative by card club interests and tribes that include the Morongo Band of Mission Indians near Cabazon.

“We are writing to clearly state our strong opposition,” the letter from the tribes said.

Proponents of online poker say the endeavor would be a financial benefit to the state. Opposition tribes called it an “ill-conceived” proposal with fundamental flaws, among them a risk to exclusivity provisions for tribes that negotiated new or revised Indian gaming compacts in 2004 and 2006.

[littleogre]

I'm sure big chief has a fair and unbiased opinion.

[niltes]

it's amazing how BOTH sides can selectively view the facts
and market realities in addition to ignoring the truths that
they don't like while picking out what little kernels that
support their position. the truth is probably this. the card
rooms feel that they are being ignored by the legislature,
which is true, since they have very little political clout
and they would like new revenue streams to compete with the indians.
the tribes that aren't involved with the online poker initiative are
pissed because they don't want card rooms to be able to get their
foot in the door on anything profitable (unless it benefits the tribes
to a much greater degree). they have huge political clout and
realize that it can only be maintained or enhanced by the tribes
remaining united on as many issues as possible. each side
is mamipulating the facts and assumptions to show that online
poker would either generate huge income for the state or
very little at all. obviously the economic realities are such
that it would be difficult for any new card room to make
significant revenue in the short run with the competition
as strong as it is, the costs needed for startup, the marketing
expenditures initially needed to attract players, and the government
with no money or risk being involved. the long run is much more
uncertain for profitability, but it would have to be well and
efficiently run which seems unlikely with all of these entities
grabbing for part of the revenue stream. one can see where
this is likely headed. unless all the tribes are involved, it is
unlikely to happen. even then it is unlikely to be a huge cash cow
until it opens up to other states. the best possibility for this to
make money with little risk is for the site to become a skin for an
offshore poker site. the small detail is that this is not legal in
today's climate, but who knows what tomorrow brings.
off sh
w