Churchill Downs secures Partner for Future Regulated Online Poker in California

All bets are off in California, where the odds of regulating online poker this year are worse than the Phillies winning the 2015 World Series. But that hasn’t stopped Kentucky-based gambling giant Churchill Downs from doubling down on its expectations. The world-famous racetrack owner has secured a partner to operate an online poker network in California, should it ever become legal to do so.

Churchill Downs secures Partner for California Online PokerThe news was first reported by The Courier-Journal on Thursday, which confirmed the partnership between Churchill Downs and Crystal Casino & Hotel and Oceans 11, located in Los Angeles and Oceanside respectively.

Headquartered in Louisville, the company already operates an online pari-mutuel betting website that is enormously successful in Kentucky, but it’s no secret they’ve been seeking entrance to other internet gambling markets should a legal opportunity to do so arise, whether by state or federal regulation. The Churchill Downs Internet Gaming division has been working on the development of a platform for online poker and casino games for some time now.

Back in May, it was rumored that Churchill had found a California iGaming partner, but no specifics were released. It wasn’t until last Wednesday that the company finally issued a formal comment on the deal with Crystal Casino and Oceans 11 when filing its Q2 results with the Securities and Exchange Commission.

Both Crystal Casino and Oceans 11 are owned by Haig Kelegian Sr. As it happens, Kelegian is also a managing partner for Bicycle Casino, which is already aligned in an internet poker partnership with Amaya Gaming’s PokerStars (along with Hawaiian Gardens, Commerce Club and two California gaming tribes, the Morongo Band and San Manuel Band of Mission Indians).

The Golden State is considered the most potentially profitable US state when it comes to a regulated online poker market, due to its immense population and wealth thereof. Churchill Downs and its duo of land-based casino partners would be able to operate an iPoker network and share in the profits, if authorized by legislators.

Earlier this year, a flurry of internet poker bills sprung hope for regulation in 2015, but if history has taught us anything over the last seven years, even the highest hopes come with miniscule odds.

Little Hopes for California Online Poker in 2015

All but one bill has already been stricken from the legislative table this year. Only Assemblyman Reggie Jones-Sawyer has chosen to move forward with his online poker measure, AB 167. A vote on that bill won’t happen until the Legislature reconvenes later this month, but the likelihood of success is negligible.

The problem—the same problem California has experienced with every attempt to legalize internet poker—is that stakeholders simply cannot agree on several major factors.

Should horse tracks be allowed to participate, despite having no previous right to install poker tables at land-based tracks? The racing industry says yes, but the 7-member strong Pechanga Coalition says no.

Should bad actors and operators with tainted assets (i.e. Amaya Gaming, PokerStars) be allowed to apply for a license? The PokerStars Coalition says yes, the racing industry could care less, but again, the Pechanga Coalition says no.

The racing industry and tribal gaming factions have significant influence in California, but their sway is divided among legislators, which translates to an ultimate lack of majority support on either side of the debate.

In the meantime, PokerStars has launched a campaign called Let California Play to raise awareness throughout the state. As part of that campaign, a throng of high-profile poker pros have been visiting locations to promote the regulation of online poker, including Daniel Negreanu, who appeared in the state capitol in May. More recently, Live Boeree, Chris Moneymaker and Jason Somerville addressed the need for regulation at Sacramento’s Stones Gambling Hall.

Ultimately, with the odds of Jones-Sawyer’s bill passing being so incredibly low, most stakeholders are now looking towards 2016 for a new flurry of California online poker bills to pave the way for regulation.

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