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State Senator Roderick Wright Interview: California Online gambling legalization

During the video interview, Senator Wright commented: “The idea is that A. we would get a piece of the action, and B. we would have better control of protecting California consumers.” 



SBR Natalie : Hello, this is Natalie Rydström with, and we are continuing our series of segments on the legalization on gambling within individual states in the US, with an interview with Californian State Senator Roderick Wright, who has recently introduced two bills in California, one that would legalize sports betting in Casinos in California, and the other that is focused on online gaming. So you’re actually going to try and amend the constitution? 

Senator Roderick Wright: Negative. We’re going to play within what is allowed by the constitution.

SBR Natalie: Ah ok ok, I think I read an article where they said that you were going to try and amend the constitution which is not what they are going to do in New Jersey, they’re not amending the constitution at all? 

Senator Roderick Wright: Well no, actually New Jersey did amend their constitution to allow sports betting. Their constitution expressly forbid them doing it. When they tried to go the Supreme Court, the Supreme Court said they didn’t have standing because their constitution didn’t allow, nor did they have a statute to allow it. They have since gone back, amended the constitution and created the statute – and Governor (Christie) has since signed their statute, so they’re ready to go.

SBR Natalie: OK, and what do you think are the chances that these bills will actually become law, and who or what are the entities that are against it?

Senator Roderick Wright: I think we have a good shot.  On the sports betting, that’s a new one, and thus far there’s not much competition. On the internet, again, when we started off everybody hated it. Now we’re down to where the majority of people like it. We’re sort of, as we do in the legislative process, we have people that are making recommendations around the edges but on balance, most people see it as something we ought to do.

SBR Natalie: Right, so talking about sports betting, perhaps you can clarify a bit because people are still a little confused. Current Federal Law, as far as I am aware, prohibits Sports Betting under the professional Amateur Sports Protection Act from 1992, but makes exceptions for Montana, Oregon, Delaware and Nevada. So in light on that, how’s it working with California? You’re not in those 4 states . .are you going to have to challenge that law? 

Senator Roderick Wright:  Well here’s what happened with New Jersey’s actions. They’re seeking to challenge the constitutionality of the 1992 federal law. There’s also as you may know a move in the federal government. What the 1992 law said was that states had a period of time to enact the sports betting orders. Those four states were the ones that did that within the window that was provided in the 1992 law. Many of us feel that A the window was too short, and more importantly violates the equal protection clause of the constitution; therefor, other states should be allowed to have a sportsbook at their discretion.

SBR Natalie: Right, Right, so states like California, and all states except those 4 that I mentioned, they can’t just decided to allow sports betting, they’re going to have to challenge the Federal Law .

Senator Roderick Wright:  Exactly. The way the federal government works here is that if you don’t have a statute in place, then you can’t challenge. It’s kind of the chicken and egg question. If you don’t have a statute, then you can’t make the challenge. If you don’t make the challenge, then you can’t get the game. You have to make an effort to enact the statute, then have the federal government tell you that it’s illegal and then you end up in court. In our case, New Jersey will be in front of us. So to take a sports analogy, we’re going to be the tailback following New Jersey through the hole.

SBR Natalie: Right, so basically what you’re saying is that when a state, or New Jersey legalizes sports betting, it’s not that sports betting becomes legal right then and there, its basically the first step by challenging the Federal Government is what you’re saying? 

Senator Roderick Wright:  Right. Technically, you would have the federal government taking you to federal court. What may well happen is again because it’s a state, it moves through fairly quickly, so it could very easily move directly to the Supreme Court because it’s the federal government suing the state, and those matters are resolved in the Supreme Court. We believe that New Jersey will prevail, and we would prevail under the same ruling. In an effort to try to preserve the statute at the federal level, there’s a congressman whose introduced a statute that would extend the deadline.
SBR Natalie: Right, so as someone who is on the front line of this struggle, what do you see as the prospect for sports betting in the next say, 5 or 10 years in the United States. 
Senator Roderick Wright:  Beyond those four states, I see it as very high. You probably will have some states that opt not to participate, and some states that will. It would be at the discretion of the state. Historically, gaming in the United States has been relegated to state authority. The idea that the federal government came up with the law in the first place flew in the face of what had been the standard practice of what we had been doing with gaming, alcohol, and other kinds of things.
SBR Natalie: So who are the people that are against this bill? Are the NFL giving you any pressure?  
Senator Roderick Wright:  Not yet. They were not, to my knowledge, active in New Jersey. 
SBR Natalie: Right, so who are the entities in California that are against these bills? 
Senator Roderick Wright:  So far nobody, on sports betting. 
SBR Natalie: I’ve heard though that the Indian Tribes are not happy with it?
Senator Roderick Wright:  The Indian Tribes are all happy as clams. Federal law says that whatever’s legal in the state, they’re able to do it. They’re able to do it without paying any tax on it.
SBR Natalie: Oh ok, I thought I read that they were against this as it was taking revenue away from them if California was able to legalize . .
Senator Roderick Wright:  We’re confusing the concerns that they had about internet gaming with a sportsbook. In internet gaming, they do have some concerns. On the sportsbook, they would be able to fully participate. In the sportsbook, there still is in place the wire act which does not allow you to do sports online. Our law, just as that would be true in New Jersey, you would have to go to the facility in order to play.
SBR Natalie: Just reading here, its says the bill wont likely trouble the tribes because they will still have exclusivity rights for slots and black jack . .  
Senator Roderick Wright:  Correct. This will not impact the casino games. Remember, the constitution of California specifically says that the only people who can do those games at Indian casinos on the reservation.
SBR Natalie: OK, so I have one more question, when I was doing my research, I read something that said . . . (he speaks, makes joke . .laugh) . . . There is an explicit law against online betting in only 3 states, it says here, Nevada, Louisiana and California, so does that impact you?
Senator Roderick Wright:  We don’t have a law in California explicitly against online betting. In fact, online betting is legal in California now… we only do it with horse racing, in what we call advanced deposit wagering. That’s done online in California right now. I don’t know relative to Louisiana and the other states you mentioned, but our ADW system has been in place for a number of years. Last year we amended that to allow exchange wagering online relative to horse racing. The federal government had their preemption on online (gaming), but it never was explicit. What the federal government attempted to say was that you couldn’t use credit cards as a function of how you placed the bet. Even if you look at what took place when the four big guys were busted, they were not busted for violating the Wire Act — it was money laundering. They were attempting to pass the money through shell accounts, so your credit card would say you were buying flowers. When you make a credit card transaction, there’s a number code that shows up which shows what specifically you were buying. You can’t use your credit card per se for an online gambling purchase.  You can actually use different credit cards for different things, but for an online business it gets dicey. 
SBR Natalie:  So how will all this work, if online gambling does get passed, will the state of California sell licenses to operators or will they contract it out?
Senator Roderick Wright:    Yes. We will, in effect, sell licenses to people and let them run it and we’ll get a piece of the action.
SBR Natalie:  OK, so lets just say this does pass online, how will that will work in terms of getting money. How will you prevent someone from a different state, getting money into California and playing in their state?
Senator Roderick Wright:    The law that enables the states to do this, one of the requirements, and it’s not that complicated to do — the online provider of the game would have to verify the identity of the player and verify that he’s a resident of California.  Not real hard. You would have to verify who he is. You would apply for your gambling permit with the operator of the game. That’s actually the least of the complicated things you would have to worry about. 
SBR Natalie: Before we end this interview Senator. Wright, is there anything you would like to add or include that we haven’t covered? 
Senator Roderick Wright:   Well, this is moving very quickly. It is moving from the standpoint that as you go forward technology changes things. When we first started this three years ago on the internet side, there was a number of people who were opposed. Their opposition largely ranged from that they didn’t want competition or they feared that it would adversely impact their brick & mortar facility.  As a matter of fact, as I’ve told them, it could. The challenge is that you don’t want to be the person in the middle of the road to block technology. There’s a lot of roadkill on that highway. What I’ve said to our incumbent gaming interests – you just want to get in the game. Right now, even though there is no California operation, California is one of the largest and most lucrative online gaming markets in the world right now, even without a statute. The only person not benefiting are the people of California who are watching this money get exported out by the boatload, for which we receive no benefit. And when there are discrepancies about who won and where the money is, we have no ability to protect the California consumer. The idea is that A. we would get a piece of the action, and B. we would have better control of protecting California consumers.
SBR Natalie: Thank you Senator Wright for joining us today. This is Natalie Rydstrom for