GPWA Times Magazine - Issue30 - October 2014

“Use it or lose it.” California's first real-money online poker room has arrived. Here's its legal case. By Vin Narayanan Nothing will ever be attempted, if all possible objections must be first overcome. – Samuel Johnson S ince 2007, the online poker debate in California has been a heated stew of an abundance of caution and a power play by the largest stakeholders in the state. For poker players in California and the online gaming industry at large, the stew has been a foul-tasting concoction that has kept domestically licensed and regulated online poker out of the state. The caution, although frustrating, was at least understandable. Casino revenue was the lifeblood of Native American groups that had little to no money prior to being able to offer land-based gaming on their reservations. Native Americans were not going to embrace online gaming without seriously investigating it first. The power play was straight-up politics. If Native American tribes were going to embrace online gaming, they wanted not only to protect their interests, but to win big. And they have been pushing hard in the California legislature to make sure they emerge the big winners. But the power play has consistently pre- vented online poker legislation from pass- ing. This year was no different. Online poker legislation had reached an impasse, with the smaller tribes worried about their future, the horse tracks wanting in and the commercial cardrooms and Na- tive American casino interests wanting to keep the horse tracks out. Another year, another impasse. But then everything changed. In July, the Iipay Nation of Santa Ysabel an- nounced it was launching, an online poker room that would accept real- money play from California residents, and shockwaves rolled through the online gam- ing industry. Real-money play was expected to launch in the last week of August. With a population of more than 38.3 million, the state has almost as many people as the Netherlands, Belgium and Greece combined. If California were in Europe, it would be Europe’s 10th most populous state. In terms of GDP, California is the world’s eighth-largest economy at $1.959 trillion. That trails only the U.S. as a whole, China, Japan, Germany, France, Brazil and the United Kingdom. That makes California online poker’s “whale.” While the online gaming indus- try would like all of the U.S. to open up its markets to a regulated online gaming product, California is the most important piece of the puzzle. When the announcement was made, the first question many people asked was, “Is this legal?” 18 “Use it or lose it.”