Gray’s deal a sure winner for casinos, tracks

Once again, insiders are smelling money and are all-in to pass a bill they cynically call the Internet Poker Consumer Protection Act of 2016.

By a 19-0 vote, Democrats and Republicans on the Assembly Governmental Organization Committee approved AB 2863 by the committee chairman, Assemblyman Adam Gray, D-Merced.

In bipartisan fashion, legislators embraced the notion of making high-stakes poker accessible to anyone with a smartphone, tablet or any device hooked to the Web. Legislators promise they’ll be able to screen kids from running up their parents’ credit cards.

This bill benefits the people running the games, largely the owners of the Indian casinos, and those involved in the dying horse-racing industry. No one else.

Calling this “consumer protection” is nothing more than political cover.

In an effort to inject clarity into the discussion, Sen. Dianne Feinstein took the unusual step of sending a letter from Washington denouncing the legislation, warning of the “potential widespread harmful implications of online gambling.”

Gray’s AB 2863 was written to help American Indian tribes and big card room owners move more seamlessly into Internet gambling. Federal regulations allow for states to offer intrastate gaming as long as the players are old enough and live within the state. Only Nevada, Delaware and New Jersey have so far taken the plunge.

There’s been a battle over Internet gambling regulation for nearly a decade between the state’s two major gambling industries – the casino tribes and the horse racing industry.

Under AB 2863, horse racing would skim $60 million off the top from revenue generated by Internet gaming each year. That’s not $60 million to assist problem gamblers, or people who lose their homes because of gambling debt, or victims of domestic violence tied to the stress of gambling addiction. Instead, that $60 million subsidy will go into the pensions of jockeys and pari-mutuel clerks while supplementing purses so tracks can draw bigger crowds. About 5 percent will find its way back to county fair tracks.

Horse racing was once a majestic sport. But it’s dying. That’s partly why the San Joaquin County Fairgrounds in Stockton announced this week that it was closing up shop; too little interest, too much cost. The hard-clay track has always been tough on horses, with several breaking down during races most years. As the fair’s CEO, Kelly Olds, said, “It was not an attractive option for us to put $500,000 or $600,000 on the table and gamble with it.”

But that kind of money is peanuts when considering Internet gambling. Why else would the card rooms and casino tribes be willing to provide the horse racing industry with a $60 million pay off every year? It was telling that the six largest tribes took no position on the legislation.

Democratic legislators regularly decry the lack of funding for poverty programs. Republicans espouse free-market economics, which presumably would let a dying industry die without mourning. But there are exceptions. Legislators are perfectly willing to toss aside such concerns to subsidize an already well-connected industry that includes wealthy horse owners and casino operators with the potential to make political donations.

Consumer protection? That’s not even a longshot in this legislation; it’s not even in the race.

This story was originally published April 28, 2016 at 5:00 PM with the headline "Gray’s deal a sure winner for casinos, tracks."