GAMBLING: Two pending state bills toss the dice
California lawmakers have introduced legislation to legalize online poker and sports wagering. Chances for success vary, experts say
SACRAMENTO — Someday in the near future, a California resident might be able to play a few hands of poker on the Internet and then, after a short drive, bet the winnings on that night's basketball game. And it would all be legal.
Legislation recently introduced would significantly broaden the state's portfolio of legal gambling beyond the lottery, horse racing, card clubs and tribal casinos that now exist.
The Senate's top Democrat is the co-author of a bill to legalize online poker as a way to generate as much as $200 million for the state's beleaguered general fund. Wealthy gaming tribes in Inland Southern California are among those that have expressed interest in participating, but there has long been disagreement over the details.
Another measure would legalize sports wagering at licensed gambling establishments such as casinos and horse tracks. Federal law prohibits sports betting in most states, and California's approval of a law to legalize it would hasten a legal and political showdown over the issue.
The online poker bill, introduced Feb. 24, was widely anticipated. But many in the gaming industry were surprised by the introduction of the sports wagering measure, the first time since the late 1980s that such a bill has been put forward.
California residents who want to legally bet on sports now must go to Nevada, one of four states exempted from the federal Professional and Amateur Sports Protection Act of 1992. The other three states are Montana, Oregon and Delaware.
New Jersey unsuccessfully sued the federal government to end the ban. Lawmakers there recently approved a law to legalize sports betting in that state, but only if the federal prohibition ends. In Congress, Garden State representatives have introduced two measures: one that would let New Jersey have sports wagering, another to lift the federal prohibition entirely.
If California lawmakers passed SB 1390, the state could join forces with New Jersey to try to end the federal sports betting ban. The state bill would allow any licensed gaming establishment to offer sports wagering.
It's expected that the state's struggling horse tracks, which have unsuccessfully tried to get slot machines to boost foot traffic, would be most likely to participate.
"It would be the greatest thing to ever happen to California horse racing," said Kirk Breed, executive director of the California Horse Racing Board, offering his personal opinion.
The state would get a share of any winnings, the same way it does with existing legal games. The additional revenue, however, is not expected to be significant.
The bill to legalize online poker, however, has a goal of raising $200 million for the state general fund.
Proponents say the bill would get the state a piece of the millions of dollars that Californians currently bet on online poker on sites that are based in foreign countries to get around a federal ban on Internet gambling.
Federal officials have suggested that states can legalize online games within their boundaries.
The California bill would offer an unlimited number of 10-year licenses to would-be poker site operators. Officials expect that the proposed $30 million up-front payment effectively would limit participation to serious operators.
"We're going to want some real certainty that the return to the state is going to be significant. That's the only reason to do it," said Senate President Pro Tem Darrell Steinberg, D-Sacramento, who introduced the bill with state Sen. Rod Wright, D-Los Angeles, who is also the author of the sports wagering measure.
James Butler of the California Coalition Against Gambling Expansion, said there are better ways for the state to raise money.
"When you bring (gambling) into homes and businesses, you're asking for more trouble," Butler said.
Other public reaction to the legislation has been muted. Many influential interest groups, from tribes with casinos and horse tracks to card clubs and companies that sell online gaming computer servers and other equipment, are still scrutinizing the 46-page measure.
Also quiet is the California Online Poker Association, a Riverside-based consortium of card clubs and gaming tribes led by the Morongo Band of Mission Indians in Cabazon and the San Manuel Band of Mission Indians near San Bernardino. The group sponsored an online poker bill last year that never gained traction.
David Quintana, political director for the California Tribal Business Alliance, said many tribes privately have serious concerns with the bill. He said the measure seems to violate the tribes' casino revenue-sharing agreements with the state. Those agreements protect the casinos from competition in exchange for making substantial payments to the state.
"This bill has so many fundamental problems with it from very powerful large stakeholders, I don't see a path to success for it this year," Quintana said.
Steinberg said he is looking for a compromise.
"Part of the art here, if we're going to get the money for the general fund, is we have to put together a coalition," he said.
Two bills were introduced last month that would legalize additional gambling in California.
SB 1463: Legalizes online poker no later than Jan. 1, 2014. The goal is to raise $200 million for the state general fund.
SB 1390: Legalizes sports wagering in California. Federal law currently bans sports wagering in all but four states.