Clock ticking on Correa’s online poker bill; Hollywood Park casino catches a break

hollywood-park-casino-californiaCalifornia’s current legislative session comes to a close Friday at midnight, leaving state Sen. Lou Correa just one day in which to pass his SB 678 intrastsate online poker bill. Given the ongoing lack of unity among the state’s Indian tribes, who stand to become the chief beneficiaries of a legal online poker system, observers are predicting Correa’s legislation will turn back into a pumpkin come the midnight hour. But Correa isn’t so pessimistic – at least, not publicly – as the bill continues to be amended even as the clock continues its countdown to irrelevancy.

On Sept. 6, SB 678’s one-time upfront license fee was set at $10m (a deposit against future taxes owed). Other changes include the dropping of the requirement for a ‘poker platform operator’ to have operated a California cardroom for three years prior to the bill’s passage, while the ‘bad actor’ prohibition on the use of any software, database, brand, trade or service mark now applies to any such product used by an operator who took wagers from US citizens after Dec. 31, 2006. The original date was specified as Oct. 13, 2006, the date President George W. Bush signed the Unlalwful Internet Gambling Enforcement Act (UIGEA) into law.

SB 678 has yet to be discussed by the Senate’s Governmental Organization Committee, in part because its chairman, Sen. Rod Wright, has proposed his own online poker bill (that also isn’t going anywhere). But Wright’s committee did approve another bill (SB 472) this week that has some bearing on both online poker bills by allowing a storied California racetrack to keep its cardroom open, despite having already announced it was shutting down its racing operations and despite vocal opposition from the state’s other cardrooms and tribes. For what it’s worth, said racetrack just happens to be located in Wright’s constituency.

The track in question, Hollywood Park, announced in May that it would run its last race on Dec. 22. Its owners, Hollywood Park Land Co., are tired of the track’s money-losing ways and want to transform the property into a mix of condominiums, movie theaters and retail shopping. But the owners of the track’s casino lobbied hard for a temporary exemption from state law prohibiting California gambling operators from having any ownership stake in an operation in another state that offers forms of gambling banned in California. The Stockbridge Capital Group LLC public pension fund that own the Hollywood Park Casino card club also own a piece of the Sahara Hotel in Las Vegas, which is currently closed for renovations.

Wright’s committee voted 6-0 in favor of sending SB 472 to the Senate floor, where it passed by a 23-6 margin on Wednesday. As a result, Hollywood Park’s cardroom will be allowed to remain open for a three-year period – which would only begin once the Sahara re-opens in 2014 – during which its owners would need to decide which gambling operation they wanted to keep. By then, one of the state’s online poker bills will (surely) have become the law of the land, leaving its owners well-positioned to exercise their online options. Well played, sirs.