Legislators, casino interests smell money with online gambling bill

Horse racing stands to gain a $60 million-a-year subsidy if legislators approve Assembly Bill 2863.
Horse racing stands to gain a $60 million-a-year subsidy if legislators approve Assembly Bill 2863. Benoit Photo

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, a tablet or any other device hooked to the Web, as if it were in the best interest of consumers. It’s not.

Making gambling legally available to anyone from the comfort of their La-Z-Boy – legislators promise they’d screen kids from running up their parents’ credit cards – would benefit the people running the games and card sharps, no one else.

Seeking to inject clarity into the discussion from Washington, D.C., Sen. Dianne Feinstein, D-Calif., took the unusual step of sending a letter denouncing the state legislation and warning of the “potential widespread harmful implications of online gambling.”

Gray’s AB 2863 would benefit American Indian tribes that operate casinos and see their future in Internet gambling, and big card rooms that hope to expand their take. And the horse racing industry.

Under terms of the legislation, horse racing would be first in line to skim $60 million annually off the top from revenue generated by Internet poker. That’s not $60 million to assist problem gamblers, or people who lose their homes because of debt, or victims of domestic violence tied to the stress of gambling addiction.

It is, instead, a $60 million annual subsidy for a single industry, paying for jockeys’ and pari-mutuel clerks’ pensions, and supplementing purses so tracks can draw bigger crowds.

Racing is a storied and majestic sport. It’s also losing market share to American Indian casinos and other forms of entertainment. However, it retains a well-honed lobbying corps. Without the promise of the $60 million, those lobbyists would work to kill Gray’s bill.

“To keep the whole industry going, we need some money from some place,” John Harris, owner of Harris Ranch, a thoroughbred breeder and owner and, like many in the industry, a major campaign donor, testified before Gray’s committee earlier this week.

Democratic legislators regularly decry the lack of funding for poverty programs. Republicans espouse free-market economics. But there are exceptions. They’re perfectly willing to toss aside principles to vote to subsidize an already well-connected industry that includes wealthy horse owners.

The industry understands the power of lobbying, the color of money and what it takes for a bill to become law. Consumer protection has nothing to do with it.