The California Nations Indian Gaming Association (CNIGA), an influential Indian organization, has voted for Senate Bill 40. This is one of the two bills which are competing to legalize online gambling within the state of California. Jerome Encinas, who is the Director of Government Affairs, stated that this is more favorable than Senate Bill 45 which is opposed by this Indian group. CNIGA is composed of both casino and non-casino tribes and the decision were not agreed on by all. The debate continues and a hearing in this regard has been organized by the Senate Governmental Organization Committee.
The Senate Bills Explained
Senate Bill 40 states that particular individuals or organizations can legally hold controlled games as regulated by the California Gambling Control Commission. Intrastate online poker would be allowed under the Commission. Anyone caught using illegal sites would have their finances or property seized and given to the Internet Gambling Fund which would be created through the bill. Fees, including registration costs, would be paid for by licensed companies. Slot machines and other devices would remain illegal.
Senate Bill 45 basically authorizes intrastate Internet gambling. If this bill was passed then any online gambling that took place would have to have been agreed upon by the state. Every hub operator would be required to provide no less than ten percent of their monthly gross revenue and an Internet Gambling Fund would again be formed.
The Current Situation
At the moment it has been calculated that more than 1.5 million Californians gamble on over 600 illegal Internet sites. It is estimated that there are over 2,300 online gambling sites operating outside US jurisdiction. These websites are offshore and are not monitored by the US and there is no way to provide legal protection to Californian players. Californians play at their own risk and any money lost is paid out to offshore companies.
In October, 2006, the SAFE Port Act was passed which included a section named the Unlawful Internet Gambling Enforcement Act (UIGEA). Basically, this states that it is illegal for US citizens to take part in interstate online gambling. Intrastate gambling is allowed as long as bets stay within that particular state exclusively.
Future Regulation
Through the legalization of online gambling it is hoped that tighter regulations can be created. There are two main reasons for this. The legalization could create conditions both in favor of the player and the state. Firstly, by having a better hold, the government can ensure that the games are safer to play. The player also has the law to fall back on should they find themselves in a bad legal situation. Secondly, instead of illegal, offshore organizations benefiting financially from these games, the California State can make sure that they reap the rewards instead. It has been calculated that the additional revenue could amount to around $1 billion over a decade if the legislation is passed. In a state with a current deficit of more than $25 billion, this would not go amiss.