This Can Be Done

[Tuff_Fish]

Earlier I had posted this on the "Internet Gambling" forum. Mostly what I got for my trouble was a bunch of crap.

Here is part of what I posted.




In any case here is another thought.

Given that the state of California, and other states, have absolutely no qualms about using degenerate gambling as a means of generating revenue, (state lotteries) let's make them part of our solution.

Suppose that the State of California was itself the owner of an online poker room. They could contract the actual operation to an experienced online poker company and collect the rake as state revenue directly.

Poker accounts could be funded by the simple mechanism of selling PIN numbers at selected locations. The poker player could logon to the site's cashier, enter the PIN number and be in business. To cash out, the player would generate a PIN number from the cashier, take it to an authorized location and cash it in.

Sounds eerily like the lottery doesn't it.

The advantage for the state is obviously the dough to be raked in in the form of rake. The advantage to us would be a legitimate and legal way to play online poker.

Who is going to fiercely oppose this? The existing cardrooms and casinos. We can mitigate this somewhat by making them the authorized outlet for PIN numbers. They get a cut off the sales.

Then it is simply a battle between the greed of the interests who would like to have more revenue, and the greed of some of the politicians who would like the cardroom/casino contributions.

Who can screw it up the most. The state of course, but maybe they could get it somewhat right since it means real bucks in their pocket.

Other states could join in the network just like they do for the mega lotteries and expand the reach and revenues.




I did some more noodling on this and read up on the history of how the California Lottery came to pass.

Getting the lottery passed was a collaboration between the education establishment, teachers unions predominantly, and the manufacturers of the lottery equipment.

The California Lottery, per the enabling statutes, pays 50% of the gross proceeds back to the public as prizes, 37% to the education fund, and the rest for sales commissions and administration. The lottery grossed $3.5 Billion last fiscal year, and education got approximately 1.3 Billion.

I believe the success of getting the lottery could be duplicated in getting a state owned ( private contractor operated ) online cardroom established.

I also looked at what it takes to get an initiative cleared for circulation to gather signatures. It is not that hard nor expensive. I took a look at a couple that are in process right now, and they are total amateur efforts.


This initiative would be an amendment to the state constitution thus would require valid signatures totaling 8% of the previous general election. The number required would approach 1 million signatures. Now this IS a daunting task. You only have a 150 day window to get it done.

But it is doable.

The initiative would have to be very tightly written. It will draw considerable opposition.

I am thinking of making the education establishment our ally by penciling them in for the lions share of the revenue. The existing cardrooms could be the authorized points of sale.

I am confident the revenues from a "California Online Poker" site would equal or exceed the income from the lottery. Now that should get somebody's favorable attention.

If we could prechoose the online cardroom software supplier and operator, that would certainly gain us some help. In the case of the lottery, I believe there was only one supplier reasonably able to get the job done, hence their support.

Out of staters can participate in the California lottery. Some of the biggest sellers are located just inside the Oregon and Nevada borders.

There is no reason out of staters can't participate in an online poker room. The California lottery laws state that anyone can participate as long as they are under no law specifically prohibiting it.

Since the "chips" would be purchased and redeemed inside California, there would be no real prohibition in effect. (Just like the lottery) You can all visit beautiful San Diego, visit the zoo and the Wild Animal Park, and pick up your "chips" while you are here. (As long as you are not legally prohibited from doing so of course [img]/images/graemlins/tongue.gif[/img] )

And, just like the states that have banded together for PowerBall, and MegaBucks super lotteries, the various states could compact with California to share the action.

OK, my eyes are bleary from reading so much.

I would just as soon dispense with the hate given out just because this is not a recipe for what you want exactly. I believe this is in the realm of the possible.

Please give your input based on logic and fact, not on what you wish for.

FWIW, just the fact of making a serious effort to do this might very well shake some legislative action loose. It happens all the time. The legislature really doesn't like loose cannon initiatives being circulated. If one looks like it has some chance, they will often try to preempt it through the usual lawmaking process. Works for me as long as we get a reasonable solution.

Tuff

[MannyIsGod]

Meh

[Tuff_Fish]

Quote:
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The rake taken from PokerStars easily equals the lottery contribution to California education this last fiscal year.

They wouldn't want the rake to be excessive. Their best interests would be to keep it modest. Just like now, they are adding lottery prize money to get participation increased.

T


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Oops, looks like I missed a decimal point. Using my very conservative numbers, the take seems to be more like $100 million vs $1 Billion.

But I have an incredibly small data base of numbers.

For PokerStars $1/2 $200 buy in.

26 sessions

1571 minutes

2799 hands (6 max)

$2,036 in rake.

Let us assume that these numbers are an average for all limits low to high.

$1.29 a minute per table. Average number of tables running over a 24 hour period = 250 ????

$464,400/day.

One year gross income = $169,506,000.00

Now if we want to get crazy and assume folks from all over the world do come on the site to play..... [img]/images/graemlins/laugh.gif[/img]

(This of course assumes a California only operation, we don't have to share.)

2500 table average for a 24 hour period = $1.69 Billion.

And if a group of states get together making an even more well know and credible site, and still do not exclude folks from elsewhere it would be a much bigger operation.

If you guys with gazillions of hands at various limits run these numbers, we would get a much better idea.

Just food for thought.

T

[tendog]

I think north dakota wanted to set up a poker network but was told by the feds they could not. Look up on google about a ND state senator who tried to get this passed if you want more info. Or someone else on here could explain why this was not allowed to happen.

[Karak567]

State run online poker is worse than no online poker. This would be an absolute disaster. No business should be state run, period.

In the completion of my economics degree I have learned one thing: anything the government touches turns to [censored]

this is a very, very bad idea

[JackA]

Tuff,

I read your post in the Zoo and was kind of surprised at the hate. I guess I shouldn't be, this is the Internet after all.

Frankly I don't think the idea, is that bad. Of course the idea of having a government agency run ANYTHING is probably not the best solution, but sometimes it is the only one.

The goal seem to be not to get the governments to run and sponsor online poker, but to the state governments sucking on the cash flow teat. Once they seen the $$$ they will fight TOOTH AND NAIL to retain their revenue streams.

I see Tuff's idea more as a way to get our foot in the door and desensatise the public and governments to the idea of online gaming.

I can recall when lotteries were new in my state, then pull tabs made an appearance, and tribal gaming took off. Now there are card rooms and casinos all over the place.

It doesn't even have to be a lottery type approach, merely the regulation, taxation, and licensing of gaming/poker operations. As long as the states get their cut, "moral" objections diminish.

[IronDragon1]

[ QUOTE ]
State run online poker is worse than no online poker. This would be an absolute disaster. No business should be state run, period.

In the completion of my economics degree I have learned one thing: anything the government touches turns to [censored]

this is a very, very bad idea

[/ QUOTE ]

Whoa-where did you go?

[Grasshopp3r]

The first state into the market has a huge advantage. With California already allowing card rooms, I see this as an easier route. Besides, Arnold hates the feds. This would be perfect for him to get behind.

[Dennisa]

[ QUOTE ]
The first state into the market has a huge advantage. With California already allowing card rooms, I see this as an easier route. Besides, Arnold hates the feds. This would be perfect for him to get behind.

[/ QUOTE ]

I biggest problem I see is that California currently has a new card room moratorium that runs through 2012+. While a new online card room is differnt then the current card clubs, someone will have to pay for the massive amount of litagation it would create. I would expect the Indian Casinos and possibly the current card room to challange this type of legislation through the court system.

[RikaKazak]

they should just legalize it...and tax it...let american business compete...after all isn't that suppose to be the american way?

Freedom and capitilism