SALINAS, Calif- Cash-strapped California could rake in 117 million dollars a year if lawmakers choose to legalize online poker. It's an issue the legislature will take up again in January.
California is not the only state considering making online poker legal. Nevada and several other states are in the race to legalize the game too. The federal government is also holding hearings on legalizing the game. Tim Gage of Blue Sky Consulting put together a report on the fiscal impact of legalizing online poker in California. Gage used to be the state's finance director and says the study shows the state would pull in 1.4 billion dollars over a decade if online poker were legal. It would also create about 1100 jobs. The California Online Poker Association, COPA, hired Gage to do the study. The revenue would come from taxes on winnings as well as gaming operators. COPA is made up of tribes and card clubs in California including the Marina Card Club where Frank Calamia serves as general manager. "This is the future. It's going to happen, and we want to be a part of it. We want to make money, the state needs revenue, so why let Nevada casinos make the money?", said Calamia.
COPA reports 60 percent of online poker players live in California. The organization contends that, "a regulated and secure web site will ensure players are protected from theft and cheating that currently goes unchecked." It's one of the main arguments to legalizing online poker. Supporters say those currently gambling illegally need protection from dangerous off shore sites. Unregulated sites made headlines when the United States Justice Department shut down Full Tilt Poker, Poker Stars, and Absolute Poker in the Spring of 2011. Prosecutors charged site operators with bank fraud, money laundering, and illegal gambling. Calamia says players using the sites lost countless winnings.
The idea of legalizing internet poker does have critics. The main one is Reverend James Butler of the California Coalition Against the Expansion of Gambling who says the millions to be gained from legalizing online poker isn't worth it. "An increase in gambling results in an increase in crime, welfare, unemployment, homelessness, and suicide. So what are we trading here? The problem in pathalogical gambling costs our state more than a billion dollars a year.
Butler says supporters of the idea are the ones who will profit. Calamia is upfront that he'll get a small cut if the game is legalized. He says right now COPA is running a site called calshark.com which lets members play online poker for free, but if legislators make online poker legal it will turn into a paid site. He says the profits will be split among the businesses within COPA. However, he adds the profit is not the whole point. "Let's stop it from going over seas. Why not have the revenue stay here in California?", said Calamia. He says his business may get stronger from it, but the revenue will also help plug California's budget hole.
"If it's just about revenue. I can find them more revenue.", said Reverend Butler. "If you raise the tax on alcohol ten cents a drink, there will be a reduction in underage drinking and the state of California will raise more than a billion dollars a year.", he added. Calamia says a tax on alcohol should be treated as a separate issue. "The state needs every source of revenue it can get.", he said. Former state finance director Tim Gage can see both sides. "The dimensions of the state's budget problem are certainly much larger so by itself certainly online poker wouldn't solve the problem, but we understood each piece helps. 100 million plus could make a difference.", said Gage.
Supporters point to the economy as a reason to legalize online poker, but Reverend James Butler points to it as the reason not to. "We have people in this tough economic climate who have lost a great deal and now the gambling industry is encouraging them to chase those losses and spend the last little money you have on this. Who is pushing this. Who wants this? Has there really been a groundswell of the citizens of California who say we don't have enough gambling give us more?.", Butler added. Butler wants the issue to be on a ballot for voters to decide whether online poker should be legalized.
