Bad actor clauses – usually focused on companies that continued to serve US players post-UIGEA – have divided and disrupted constructive debate on the legalisation of online poker in California for years, with some tribal groups strongly supporting the concept, and others equally vehemently opposing it.
This week during the 20th Western Indian Gaming Conference there were signs that one band appears to be modifying its stance on the issue; the Rincon Band of Luiseño Indians took a more conciliatory position (see previous report) that might prove to be the breakthrough in achieving a workable consensus.
That happy news has been followed by reports of a letter sent by the Rincon to the authors of two legalisation bills currently before the California Legislature – Assemblymen Mike Gatto and Reggie Jones-Sawyer.
In it, the Rincon, acting in concert with the Pala Band of Mission Indians and the United Auburn Indian Community as a coalition of tribal interests and cardrooms supporting legalisation of online poker, suggest a practical compromise to avoid yet another failure due to bad actor divisions.
The proposal hinges on making prior illegal conduct a personal rather than company fault; to quote from the letter:
“We suggest an approach that looks specifically at personal participation in unauthorized gaming.
“Under this approach, those persons with control over a licensed operator, service provider, or marketing affiliate could not include any person who has personally participated in unauthorized gaming.
“This approach strikes a balance between the state’s need to ensure that persons who willfully defy gaming laws not be permitted to jeopardize the integrity of Internet poker in California, while recognizing that control of an entity may change over time in a way that resolves regulatory concerns.
“If a company that engaged in unauthorized gaming changed ownership, regulators would be able to review the effect of that change in ownership under the bill’s standards.”
Such a revision in thinking would of course be to the benefit of the world’s largest and most reputable online poker operator, Pokerstars, which has been the subject of a bona fide change in ownership following its acquisition by the Amaya Gaming group last year (see previous report).
Pokerstars is in a powerful alliance with major Californian card rooms and the Morongo and San Manuel Indian Bands, all of which oppose bad actor clauses.
What the proposal does not (yet) resolve is the critical issue of what to do about valuable assets developed through unauthorised internet gambling. Here the letter acknowledges the problem but does not propose a solution other than further negotiation and debate aimed at reaching a consensus.
The political reaction to the letter has yet to be seen, but it does offer a workable solution to a previously intractable problem.
The Rincon’s online and land business relationship with Caesars Entertainment in California has understandably prompted speculation that there has been a change of heart at the giant gambling group as well, but this has yet to be confirmed.
How the Pechanga and Aqua Caliente tribal groups – both supporters of bad actor clauses as presently constituted and targeting corporate entities like Pokerstars – react has also yet to be seen.