Wednesday, April 11, 2012

Interesting California online poker talk -- no fooling

The San Francisco Chronicle has this interesting article on the intrastate online poker fight in California.

An interesting point of the piece is how entities in the state, such as cardrooms and Native American tribes, are talking of joining forces to get licenses and keep out the Harrah's, MGMs and Zyngas of the world. Meanwhile, there is also infighting, as horse tracks are pitted against tribes and cardrooms.

The bill under discussion has this provision:
Anyone who launches a site would have to pay the state 10 percent of gross revenue. Players would have to register with the sites, using their Social Security number to prove they are at least 21, and pay taxes on any winnings.
Author Demian Bulwa also makes an interesting point about the limited market. A high license fee would provide a barrier to entry, plus there is the likelihood that only a handful of sites would survive if the market were deluged with online poker offerings.
"The question is whether they can work out the politics over who should get licenses," said I. Nelson Rose, a Whittier Law School professor who blogs at "Nothing makes as much money as a legal gambling monopoly. And if you can't have a monopoly, you want an oligopoly." Ultimately, just a few websites are expected to go live. That's because of a proposed $30 million license fee - which would be credited against the 10 percent cut of gross revenue - and the expectation that consumers will flock to only about a half-dozen well-marketed sites. The result is alliance building. Dozens of tribal casinos and cardrooms, including Pete's 881 Club, joined the California Online Poker Association, which recently started a free online poker site called as a way to work out the kinks and start building a brand.
I think companies that one day hope to get into the U.S. online poker market would be wise to start building their free-play sites as a marketing tool now. Or yesterday.

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