California Dreaming

I’ve vaguely followed the less-than-riveting saga happening out in California over the last few months with regard to the state perhaps becoming the fourth in the U.S. to pass some sort of legislation favorable to online poker. I think I’ve been reading such stories off and on for the last decade, at least, reaching back at least as long as the Unlawful Internet Gambling Enforcement Act of 2006 and perhaps even before.

The news this week wasn’t good for those wanting to see California get on board, as the legislative session ended with nothing being passed. A summary of the situation can be read over at PokerNews in “Dreams of a California Online Poker Bill Passing in 2016 Are Dead.”

There are numerous groups involved in this battle, including several tribes (with differing agendas), a few casinos, and, of course, Amaya and PokerStars.

As the PokerNews article explains, there remain differing opinions about the UIGEA as well as the significance of PokerStars continuing to serve U.S. customers following its passage in October 2006.

The sponsor of this latest bill, the Assemblyman Adam Gray, had run into difficulty getting traction without any sort of “bad actor” clause that would ban PokerStars from getting in the game right away. So he added one (a five-year “hard ban”), but that didn’t help get things moving, either. Even if a bill were passed without such a clause, regulators could step in and introduce one later (like happened in Nevada).

Anyhow, it’s all moot for now. They got further down the legislative road this time than in any of these other instances over the last decade-plus. There are genuinely “interested parties” this time, too, when it comes to getting some sort of online poker up and running in the state, although their interests are necessarily aligned.

Feels a long way away, though. And looking at it from afar here on the east coast, makes it feel even further.

Image: “Welcome to California” (adapted), Ken Lund. CC BY-SA 2.0.

PS Gets the OK from NJ

My first thought last night upon hearing the New Jersey Division of Gaming Enforcement had authorized Amaya to begin operating both PokerStars and Full Tilt in the Garden State was “finally.”

That such an announcement would be coming is something we began hearing not that long after New Jersey governor Chris Christie signed the state’s online gambling bill in late February 2013. Since then the likelihood of PokerStars’ return to the U.S. via Jersey has swung back and forth between just-around-the-corner to not-bloody-likely a few times before several hints over the summer punctuated by the phrase “end of the 3Q” made late September seem a real possibility again.

My second thought was that when news finally did arrive it coincidentally did so on the anniversary of the Unlawful Internet Gambling Enforcement Act of 2006 being passed by the House and Senate (as noted in yesterday’s post). Something oddly symmetrical there, I suppose, given how the UIGEA’s history and that of PokerStars (and Full Tilt) have been intertwined over the last nine years.

After that I found myself less specifically thinking in generally positive terms about the news, not necessarily because of what will immediately come of it but rather how longer term the story of “U.S. Online Poker 2.0” will surely be a lot more interesting than it would have been otherwise. Felt like there was very little to look forward to before; now, perhaps, there are at least more possibilities, including more good ones for U.S. players wanting to play online.

That said, it’s been so long since U.S. Online Poker 1.0 -- an era that ended mid-April 2011 -- it is hard to think all that concretely about how last night’s news might conceivably lead to the reintroduction of the game online in more than just a few states here and there.

But it does feel a little like after enduring several orbits of garbage cards while sitting behind a dwindling stack, a hand with some potential has finally arrived. The attention is newly engaged, but the hand still has to be played skillfully. And luck still matters, too, going forward.

Forward-Looking With Amaya

I took close to an hour out of the day today to listen to that Amaya conference call in which the new owners of PokerStars and Full Tilt (since August of last year) discussed earnings from last year’s fourth quarter. Or rather I should say I listened to the sucker while performing various farm chores, as an .mp3 of the call has been uploaded here.

Chris Grove of Online Poker Report has also spent some time listening to the call, and in fact has transcribed the whole thing here, if you’re curious.

Among the headlines coming out of the call were CEO David Baazov’s statements -- “forward-looking” and thus subject to the usual disclaimers about such, natch -- regarding the future growth of poker (“we are still a poker-first business” he reiterates), as well as about other areas of interest for Amaya in the coming months and years.

“Our goal is to double the poker sector in the next five years,” stated Baazov, adding that the “three primary ways” Amaya aims to achieve that goal will be “entering new markets where we currently have little or no penetration in real-money poker,” “creating consumer demand and excitement through innovative marketing and promotions,” and “continuing to innovate the product to attract more players and reactivate lapsed players.”

Immediate response to the idea of doubling the poker sector within five years varied from expressions of doubt to outright cynicism, although if you think about it in the context of online poker five years is a lifetime.

Baazov spoke further of particular areas of the world Amaya desires entering, including those states in the U.S. with current online gaming legislation and those considering it (in which Amaya is actively lobbying). He talked as well about the other “verticals” including casino games and sports betting, the latter having only modestly launched in a beta version this week.

The other big headline coming out of his comments had to do with the declaration of an intention to enter daily fantasy sports, an area currently dominated by FanDuel and DraftKings. That latter intention obviously raises eyebrows here in the U.S. where the majority of us aren’t currently included in discussions of online poker or online casino games (and likely won’t be for some time).

CFO Daniel Sebag came on after that to talk specifics regarding the 4Q bottom line and what’s anticipated going forward, then Baazov hopped back on to talk briefly about the current investigation by the Autorité des Marchés financiers (AMF) regarding some trading occurring around the time Amaya acquired the Rational Group as well as the company’s application to be listed on NASDAQ Global Select Market. He also alluded to Amaya’s sale of the gaming machine supplier Cadillac Jack, announced earlier in the week.

The Q&A that followed touched on further specifics, mostly reiterating points made during the statements. There elaboration was made regarding Amaya and daily fantasy sports, with Baazov responding to a question by saying “the goal is to be up before the NFL season starts.” He also mentioned specifically the U.S. folks who were “formerly PokerStars players” and how Amaya is banking on “a clear, strong crossover with poker.”

It is always curious to eavesdrop on these sorts of discussions. And to look back on them at some future date as indicators of what a company was thinking at a current moment in time. You know, when backward-looking rather than forward-looking.

“What the Hail?” Says Caesars, Changes Bad Actor Stance

Been reading around some regarding the recent news that Caesars has changed course in a notable way regarding its stance toward PokerStars being allowed back into the U.S. (in those states that would have ‘em, now or later).

It was late last Friday that the story first began to circulate, with Chris Krafcik tweeting that Caesars Executive VP Jan Jones Blackhurst had told him Amaya/PokerStars “should be considered for legalization in the U.S.” The statement suggests a change of opinion from Caesars regarding the inclusion of “bad actor clauses” in online poker legislation, something they had been in favor of previously.

Caesars has lobbied pretty hard over the years for those clauses that would close out online poker entities that served U.S. customers during that post-UIGEA, pre-Black Friday period (October 2006-April 2011), making them either unable to get licensed and regulated or force them to wait several years before becoming potentially eligible to do so.

Indeed, the whole “bad actor” issue was more or less all about PokerStars, currently the world’s biggest online poker site by eightfold (or more) over its nearest challenger. Caesars (and others) didn’t want such a formidable competitor back in the U.S. once the games began to be dealt again, and so did all they could to help keep that from happening.

But now -- not long after Caesars’ largest operating unit has declared bankruptcy and amid other financial woes and restructuring of debt -- they’re suddenly for Amaya/PokerStars. A further indication of the new position came in the form of Caesars’ partner in California the Rincon Band of Luiseño Indians making known their support of a couple of current bills in the state, including their own similar change of heart regarding so-called “bad actors.”

Krafcik wrote up the story of Caesars’ newfound stance over at Gambling Compliance, although the piece sits behind a paywall. You can read more about it all at PokerNews and over at Online Poker Report.

The PN story includes the further quote from Blackhurst to Krafcik that Caesars now intends “to focus on where our opposition really lies, and clearly it’s not Amaya and PokerStars” whom they now consider “are a strong ally in the space.” Amaya Head of Corporate Communications Eric Hollreiser also told PN that from their side they “will work closely with Caesars to promote the US online gaming industry and support responsible legislation at the state and federal levels.”

Caesars Interactive Entertainment’s WSOP.com sites are attracting greater attention though still boast very modest traffic since opening up in Nevada and New Jersey in late 2013. Caesars’ change from considering PokerStars as an antagonist to now considering them an “ally” necessarily invites a lot of speculation regarding what might happen in various states, as well as thoughts to what could come well down the road from such an alliance.

There’s a lot that remains uncertain, though, when it comes to guessing what all this might mean going forward -- or even right now. Generally speaking, it does seem a potential positive, at least insofar as it appears to lessen some of the in-fighting among those on the pro-online poker side of things. Of course, that situation has already had a deep and lasting effect on Online Poker 2.0 in the U.S., including positioning proponents of online poker well behind the hard-charging Adelson-backed machine working the other side.

Last Friday was the 13th, the day this news broke. Recalls another Friday the 13th in online poker history, the one on which then-president George W. Bush signed the Unlawful Internet Gambling Enforcement Act of 2006 into law. Meanwhile, we all know the Ides of March comes on the 15th, but did you realize the Ides of February is the 13th?

Like I say, it seems like positive news. But I’m wondering... should anyone beware?