State lawmakers are debating again whether to allow licensed gambling operations in California to launch online poker sites. And as usual, the bills' sponsors are having trouble getting those in the gambling business to agree on who, if anyone, should be allowed to run virtual poker rooms. Lawmakers should ignore the industry squabbling and focus on protecting consumers.
FOR THE RECORD
Online poker: A May 12 editorial said PokerStars took "illegal bets" under its former owners. The federal government dropped its complaint against the company in 2012, and PokerStars admitted no wrongdoing. Its founder, however, remains under indictment for allegedly running an illegal gambling business.
As with past proposals, the current bills would require operators to use sophisticated technology to bar underage players, accept bets only from Internet users inside California and identify problem gamblers so that they can be helped. Although such technological measures aren't perfect, they still offer much more protection than illegal gambling sites do, or even legal sites in foreign countries with weak consumer safeguards. Like it or not, an enormous number of Californians are playing poker online already. Establishing a legal, regulated poker system would also enable the state to track and tax gambling revenue, raising money for oversight and enforcement.
Equally important, though, is deciding who should be allowed to offer online poker if it's legalized. A cautious first step would be to limit the field to entities that have already passed muster with state licensing boards and have a long record of compliance with state gambling regulations. Nevertheless, that's too permissive for some tribes and card-room operators, which want to prevent the state's horse tracks from launching poker sites on the argument that online poker isn't a natural extension of the tracks' business. Yet tribes, card rooms and tracks would all be operating poker sites through third parties, such as Las Vegas casinos and firms with legal online poker sites in other countries. There's no reason why a tribe should be able to hire one of these contractors but a track should not.
Also at issue is whether licensees should be able to work with one specific contractor: Amaya, a Canadian gambling company that owns the world's top online poker brand, PokerStars. A bill by Assemblyman Mike Gatto (D-Glendale) would effectively bar Amaya because of the illegal bets that PokerStars took under its former owners. Rather than picking winners and losers among tribes and card rooms, lawmakers should set eligibility requirements that protect consumers from fraud and exploitation, and then let state regulators decide who meets them.
The internecine fight within the gambling industry may very well prevent online poker legislation from becoming law. But lawmakers shouldn't confuse failing to set up a legitimate market for online poker with striking a blow against online gambling. A regulated online poker industry is better for the public than the unregulated and illegal games found today in the underground Internet. And more competition in that market is better than less competition.