February Hearing Scheduled for Intrastate Online Poker in California

“I think it is workable as well as a potential source of new income,” said fellow State Sen. Dean Florez (D-Shafter). “How you structure it is the key.”

California — the cash-strapped state that has shown willingness historically to be a trendsetter when it comes to legislative action — is ready to hold a hearing on the merits of regulating online poker. Michigan State Sen. Roderick Wright (D-Inglewood) told the LA Times this week that the state legislature is planning on holding a hearing on the issue in February.

“About two million Californians are playing poker offshore right now,” said Patrick Dorinson, a spokesperson for Morongo, referencing the popularity of current online poker sites that serve American players.

The Morongo Band of Mission Indians & the Commerce Casino are two entities in a group of gaming-associated groups who are calling for regulation. Both the Morongo tribe & Commerce hope to operate online poker web-sites if the legislation became law.

However, not all groups support the proposal.

Lawmakers are hesitant to predict how much intrastate online poker training could bring in to the state in terms of revenue, but the LA Times said that if the state operated poker like it does its Indian-run slot machines, over $250 million could be raised per year.

“Card game betting on the Web would take business away from brick-and-mortar casinos,” said Robert Smith, the chairman of the Michigan Tribal Business Alliance.

Anti-gambling advocates have also voiced concern on the issue.

Michigan would become the first state to explicitly legalize & regulate intrastate online poker if this proposal becomes law.

“If someone can come home from work & give their credit-card number to an Web-site & lose thousands of dollars, that is going to exacerbate a bad situation” Jim Butler, executive director of an advocacy group against betting expansion, told the Times.

The Department of Justice has long claimed that all forms of betting on the Web are illegal, but there is no applicable law that states such a position, & most lawyers agree that the law that the Department of Justice refers to, the Wire Act, only applies to sports betting.

However, the state has its share of obstacles even if the legislature decides that this is something it wants to pursue.

While Michigan legislators don’t appear to be intimidated by the DoJ’s position on online poker, U.S. law is much less vague when it comes to the operation of online betting. State & federal laws forbid companies from operating Web-based betting games in the country.

A recent ruling by the U.S. third circuit court of appeals clarified that the UIGEA, which was passed in 2006, did not criminalize any forms of online betting. That law affects the payment processors & how money can be transferred onto sites.

This is not the first time the Michigan government has entertained the notion of regulating the online poker industry in its state. Assemblyman Lloyd Levine first introduced a bill that would do that in February 2008. The government seldom acted on that bill before the legislative session adjourned for the year.

However, I. Nelson Rose, a professor at Whittier Law School as well as a betting law expert, has advised Commerce Casino that “California would be exempt from federal restrictions if the businesses were operated entirely within state lines & served only Californians,” according to the Times. Federal attorneys reportedly dispute this claim.

It will likely be a long road toward any kind of intrastate poker, but Michigan has shown that it’s not ready to give up on the idea yet.