©  December 17th, 2009
ByDaniel L. Cox
Editor, Poker Insider Magazine

Sacramento, CA – The continuing financial crisis facing the state of California has the legislature looking at ways to tap into what the San Francisco Chronicle reports is a $250 million in potential revenue from Internet gaming.

Leading the drive is the Cabazon Band of Mission Indians, with their extremely profitable Morongo Casino near Palm Springs. State Senator Roderick Wright (Democrat - Inglewood), Chair of the Governmental Organization Committee is planning hearings in February 2010. So far Wright's chief concern is getting a bill that Indian tribes would support. Since casino revenues are extremely competitive in California, any deal that does not include the support of the majority of tribes may not do well. The current tax laws require the casinos to provide the state's coffers with 25% of casino revenues.

An underlying tenet of this tax rate is that the casinos maintain a gaming monopoly. The tribes could have a strong case for renegotiation if the Legislature legalizes online poker. Though the state would gain tax revenues from online poker, they could lose revenue from the brick and mortar casinos and card rooms.

In February 2008, former state Assemblyman, Democrat Lloyd Levine of Van Nuys, proposed a feasibility study of ways for the state to regulate online poker. The study found a loophole in federal law that allows states to have online gambling as long as it does not cross state lines. With this in mind, the state needs to act before the federal legislators pass contrary regulations.

In the year since the Levine study, several legislators have proposed bills intended to bring online gaming into the state, with emphasis on Internet poker. So far, each of these bills has stalled. In January, a group of pro-gambling organizations will again approach the Legislature, hoping to resurrect the idea.