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Gaming lobby pushes Internet poker as budget fix


A group of legislators, casino owners and American Indian tribes are framing a state Senate bill that would legalize Internet poker as a way to address California's $25 billion budget gap. 

SB 40 would allow a licensed operator to run an online poker operation within California and would criminalize the participation in or profiting from illegal Internet gambling. Operators would pay a fee to the state, and all servers and personnel would have to be located in California.

Proponents claim the bill could bring in $1 billion in state revenue in the next decade at a time when most government programs are being scaled back or eliminated due to the budget crisis.

The bill was authored by Sen. Lou Correa, D-Santa Ana, and is supported by the California Online Poker Association, which includes 29 tribes.

All In For California, the ad hoc group in favor of the measure, summarized its position on its website:

SB 40 will help balance the state budget, create California jobs and regulate online poker. Right now, nearly two million Californians wager $13 billion playing unregulated online poker; 60 percent of all players in America. None of this money stays in California, going instead to support illegal, offshore interests.

While gambling issues have long been a mainstay of California politics, the debate in recent years has focused on whether or not to tax tribes on money made from online gaming operations.

As Capitol Weekly reported last month, the California Tribal Business Alliance opposes the bill because it does not clearly shield tribes from potential state taxes on Internet poker revenue:

Under this bill the 'legal entity' authorized to offer Internet poker would be subject to a state tax based on a 'percent of the fees collected by the licensed entity from players participating in poker games conducted on its Internet website.' By requiring tribes to offer Internet gaming only through such an entity, tribal governments would be required to consent to a state tax as a condition of participating in Internet poker.

This proposal is highly objectionable, as it is contrary to federal policy that Indian Tribal governments are not taxable entities. Consistent with federal law and policy, tribes should be permitted to offer Internet poker from their Indians lands free of state taxation and regulation.

SB 40 isn't the only poker-related legislation on the table. SB 45, introduced by state Sen. Rod Wright, D-Los Angeles, is an Internet gambling bill widely believed to be a placeholder for an amended poker measure, according to EGR Magazine.



Comments are closed for this story.
joubaur's picture
Oh, brilliant! Just what we need to fix the budget... More online gambling that only makes the rich richer while taking from the needy who have gambling addictions. You know there is NOTHING BUT GREED, behind this. and it is being spun as help for the budget only to sell it!
Bear's picture
Bologna! Gambling never fixed anything but puts more money into the hands of the rich and the government. Better to develop industries that produce jobs with a living wage that creates wealth across the boards. Such as a profitable and sustainable hemp industry that includes textiles, food, biofuels, medicine, and recreation. The tax implications for such an industry and the creation of jobs should be enough to push this through next time. And by the way, the next time a government agency naysayer says that cannabis has no medical value remind them the U.S. Department of Health and Human Services holds Patent 6,630,507 which states that cannabis is useful in the treatment and prophylaxis of a wide variety of oxidation associated diseases such as ischemic, age related, inflammatory and autoimmune diseases. Please look this up to learn more.
mrwolf's picture
The arguments against online poker are absolutely foolish and based on narrow-minded stereotypes. My friends and I have been playing online poker for years. It ALREADY exists! We are ALREADY playing! And the billions of dollars of revenue are currently going to some foreign element. The people of California need to wake up and take the free money that is on the table. We are going to play anyway, so let's keep the money at home. Worried about problem gamblers? Honestly, there will be some problem gamblers, but since online poker already exists, these people already have a problem. Moving the servers to California will not create more problems gamblers, nor will it eliminate any. It's a non-issue. Personally, I don't like that a small group of complaining, nanny police are trying to save all of us from imaginary dangers. Worry about your own problems, not mine. Worried about rich people becoming richer? Here's another stupid argument. Go ahead and get rich. I'm all for it here in America. If some people get rich while California is saved, then I'm supporting it. The media has exposed the fact that rich people are getting richer in America. I agree that we all suffer because of it, but blocking online poker and the tax revenues that California could earn is no way to solve this problem. Overcome your fears and prejudices and make smart choices. California needs it. We are going to play anyway. Take the free money.

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