A California bill that seeks to raise money by legalizing Internet gambling has the big players in the state's betting industry - and some fresh faces from the tech world - competing for a cut of the envisioned bounty.
They've created alliances, tested websites and lobbied lawmakers. But what many see as an inevitable move online for legal gambling is also creating tension and uncertainty.
The bill by two legislators, including the leader of the state Senate, would offer 10-year licenses to the state's tribal casinos, card clubs and horse racing interests, allowing them initially to offer online poker. The state could begin to phase in other games after two years.
The prospect of bringing gambling to people's homes and smart phones is pitting the traditional gaming rivals against each other. Indian tribes that now reap riches from brick-and-mortar casinos are eager to make more money, but worried that a digital shift will take away customers.
The state's gambling interests are also trying to erect barriers to savvy outsiders who want to get in the game, including Las Vegas casinos and social media companies like San Francisco's Zynga, which hosts the world's biggest free online poker game.
Opponents of legalized gambling, meanwhile, worry they are outgunned by a multibillion-dollar industry that spends heavily on campaign donations and lobbying. They fear that state leaders grappling with a $9.2 billion budget deficit will clear a new path to possible ruin for gambling addicts.
Offshore industry
California residents now can use the Internet only to bet on horse racing. The bill, SB1463, seeks to raise fees and taxes from an online poker industry that has operated offshore, without regulation, for years.
Anyone who launches a site would have to pay the state 10 percent of gross revenue. Players would have to register with the sites, using their Social Security number to prove they are at least 21, and pay taxes on any winnings.
Past efforts to legalize online gaming in California have failed, but backers in several states now believe public opinion and the legal landscape are both moving in their favor.
The legislation by state Senate President Pro Tem Darrell Steinberg, D-Sacramento, and Sen. Roderick Wright, D-Inglewood (Los Angeles County), comes after an opinion released in December by the U.S. Justice Department that a federal law standing in the way of online gambling applies only to sports betting.
Millions sought
Steinberg "has been very clear," said his spokesman, Mark Hedlund. "His interest in this bill is as a way to raise much-needed revenue for the state to help fund education, public safety and all of those things we've had to whack because of the budget deficit."
How much money might be raised is unclear, though the bill says the state intends to collect at least $200 million in licensing fees.
The bill's divisive centerpiece is its offer of licenses to roughly 150 entities that are already under the watch of state gambling regulators: cardrooms, tribal casinos and horse tracks, plus three advance-deposit wagering firms that take online bets for those tracks.
There's hardly consensus in the group. Some tribes support online gambling, believing it reaches a unique clientele, while others fear customers will stay home rather than travel to pull the levers of lucrative casino slot machines.
Most cardrooms appear to support online poker. While some customers may be lost, said Randy Pellolio, the co-owner of Pete's 881 Club in San Rafael, "at the same time, it will introduce more people to playing the game."
Pruning the field
Divides have opened, as well, over who should get a license, industry representatives said in interviews. Everyone wants to limit the number - so long as they aren't excluded.
The tribes and cardrooms, for instance, want the horse tracks out, arguing they have no connection with poker.
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