PokerStars has announced the signing of an agreement with the Morongo Band of Mission Indians in California, as well as the three largest card rooms in the state: Commerce, Bicycle Casino, and Hawaiian Gardens. The deal is based on legislation enacted in California to legalize intrastate online poker, at which time PokerStars will become the subcontractor for online poker services, providing the online poker platform for a real-money website to be owned by the tribe and card clubs.
Timing is Everything
A press release from PokerStars with the news was sent in the mid-afternoon hours of April 23 from Sacramento, California. At the exact same time, the Governmental Organization Committee of the California State Assembly was holding a hearing entitled “The Future Public Policy and Fiscal Implications of Authorizing iPoker Gaming in California.” The meeting had been scheduled for more than a few weeks.
The hearing was chaired by California Assemblyman Isadore Hall III and consisted of 33 witnesses who testified on various aspects of online gambling, with a specific focus on poker. One of the late-afternoon panels included Morongo Chairman Robert Martin, who was getting ready to speak as the press release hit email inboxes and Twitter.
Martin’s comments about the clause followed six members of the panel, all from other California tribes, who acknowledged support – and indeed the requirement – of a “bad actor” clause in order to help push the current legislation forward. Those other tribes would be entering the new California online poker market without the experience of a company like PokerStars, which has tremendous player support and could potentially corner the market before sites are even launched.
It has been rumored for many months that PokerStars was conducting lobbying efforts in California, as well as speaking with Morongo and a number of card rooms. The forcefulness and timing of the agreement was more of a surprise to most industry veterans than the actual partnerships.
The deal will offer the PokerStars brand to the Morongo Band of Mission Indians, Commerce Casino, Bicycle Casino, and Hawaiian Gardens. They will own, license, and operate the sites, but PokerStars will serve as the subcontractor for the online poker platform and all related services.
PokerStars took the opportunity to include several statements in the press release regarding California legislation. The subtitle of the statement itself read: “Legislation should fully protect the interests of consumers and the State, but should not be abused to artificially create a competitive advantage for a select few.”
The release went on to state that the agreement will promote legislation in California, and the partners will advocate for the intrastate online poker bill to “ensure stringent consumer protection, consumer choice and maximum revenue for the state.”
Morongo, the card rooms, and PokerStars refer to their group as “the coalition” and introduced the guiding principles in the matter of intrastate online poker. The first principle is to extend California’s consumer protections and accountability standards to intrastate real-money online poker. The second is to ensure that the state and its residents benefit from the endeavor. Third is to require a “stringent regulatory vetting of operators and subcontractors before authorizing licenses.” And finally, the fourth principle is to “reject attempts by special interests to use the legislature to restrict competition and pick ‘winners and losers.’”