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Tribal alliance disputes revenue prediction

State Senate hearing on Morongo's gaming initiative begins on Tuesday Debra Gruszecki • The Desert Sun • February 6, 2010

The California Tribal Business Alliance on Friday added firepower to its stance against the online poker initiative by the Morongo Band of Mission Indians and California card rooms.

The alliance released a report by Michael Genest, of Genest Consulting, disputing the prediction that the intrastate poker initiative would generate $50million in revenue to the state.

Alison Harvey, executive director, said the monopoly poker initiative also is likely to siphon $365 million a year out of the state's general fund if tribes operating Indian casinos under 1999 and 2004 gaming compacts invoke the exclusivity clause.

“And that's in a down economy,'' Harvey said.

The revenue predictions from Genest, former director of the California Department of Finance, come just days before state lawmakers plan to hold an informational hearing on a proposal by the Morongo Band of Mission Indians and a consortium of card clubs to conduct an intrastate poker site.

The state Senate committee hearing is set for Tuesday.

Patrick Dorinson, a spokesman for the Morongo, called the report a “politically motivated” document.

It was “cobbled together at the last minute with the intention of negatively influencing the Senate hearing next week on Internet poker,'' Dorinson said.

The California Tribal Business Alliance projected, as part of the study, that the total gross gambling yield attributed to Internet poker played anywhere in the world from terminals in California in 2011 will be $536 million.

“If all players moved to the proposed new, single-licensed entity's site, and continued to play at the same level, a 10-percent fee would generate $53.6million,” Genest's report said.

Harvey said the Morongo tribe's estimate is not realistic.

It assumes all Californians now playing on offshore sites will redirect their play to the new California site, she said. Even if they switched, it's likely the gamers would find the California site to be unattractive because “you don't pay taxes” on offshore sites.

Liquidity is another issue, she said, as is the lack of high-stake bonuses and incentives to get California gamers to jump into the online pool. Offshore, Harvey said there are “huge numbers of people” making wagers simultaneously, so offshore wagering is more attractive.

California would have a hard time competing with these shark-to-fish ratios, she said. “We can't see them getting over 30 percent of the market.”

Dorinson took exception with the California Tribal Business Alliance stance. It assumes that people will continue to play illegal, offshore sites, thereby, decreasing potential revenue to California.

“Perhaps the (alliance) should keep up on current events,'' he said, noting a crackdown by Mastercard and VISA on the use of their cards on offshore sites would leave poker players in the United States unable to play.

“This goes to what we have said all along that California needs a regulated intrastate game that will offer consumers protection from unscrupulous operators and maximize revenue to the state,'' Dorinson said.

Debra Gruszecki covers business and Indian gaming for The Desert Sun. She can be reached at (760) 778-4643 or Debra.Gruszecki@thedesertsun.com

 


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