California’ tribes and poker rooms prepare for legalization
by Bradley P. Vallerius, JD

A coalition composed of 29 Indian tribes and 31 card rooms in the US state of California has entered agreements to license Internet poker software from Playtech and Scientific Games. Calling itself the California Online Poker Association (COPA), the coalition cannot legally provide wagering for real money unless the state legislature enacts a statute, but until then it will operate a play-for-free platform.

The coalition represents a majority of the state’ tribes and card rooms. By linking together to form a single poker network, coalition members enjoy the benefit of aggregated player liquidity, which enables greater game and tournament options and enhances the player experience. The alliance also means members will not have to compete against each other for the precious few operating licenses if the state should decide to legalize.
Prior to the recent withdrawal of PokerStars and Full Tilt from the US poker market, GBGC calculated that California represented around 33% of the US market for Internet poker and appears a good bet to become the first state to legalize Internet poker. 

The state is known for pioneering progressive new policies, and its notoriously failed budget requires dire assistance from new sources of income.
Since banding together last year, COPA has been a major player in policy discussions in California. Its members are closely associated with a bill sponsored by Sen. Lou Correa that would authorize California’ Gambling Control Commission to regulate Internet poker. There is also separately before the Senate a bill that would legalize all internet gaming, not just poker. Both bills are pending before the Senate’ Committee on Governmental Organization where an informational hearing is scheduled for 12 July 2011.
COPA’ internet software and services arrangement is contained in two separate agreements. 
One of the agreements is with Playtech, a London Stock Exchange corporation that chose to withdraw its business from the US upon enactment of the federal Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006. The Israeli company provides a range of remote gambling software systems, and its iPoker network battles for third spot in the poker liquidity tables with PartyPoker, behind PokerStars and Full Tilt.
The other agreement is with SciPlay, a joint venture between Playtech and New York-headquartered Scientific Games. SciPlay will provide services to keep the software product performing optimally, including network management, hosting, advisory services, customer support, internal marketing and all associated hardware accommodations.
The parties expect to launch a play-for-fun network by the end of the year. The benefit of a play-for-fun network is that it presents opportunities to establish a brand and build loyalty. By registering players at its play-for-fun network, COPA will gain a head-start on establishing a player base and marketing directly to it.
“SciPlay’ services can continuously collect and analyze player data and deliver customized web experiences to enhance customer relationships and keep players coming back,” says Rick Weil, CEO of SciPlay. “In addition, we can create targeted promotions to create a virtuous cycle whereby casino and card room players will be driven to the website for COPA and vice versa, enhancing traffic to both the land-based and web-based channel.” 
The plan is for COPA to operate a single brand and website, as opposed to each of its members marketing and registering players for its own brand and then funneling them into the COPA network.
Playtech says its team fought fierce competition to win the licensing agreement with COPA, and The Financial Times names BWIN.Party as one of the rival bidders.
GBGC is aware of a number of European-licensed firms looking to do deals in California, which is only to be expected. The chance to be involved in a market like California is simply too valuable to miss with the European poker scene so competitive. More similar announcements of deals will undoubtedly follow. 

Bradley P. Vallerius, JD has eight years of experience specializing in research and information for the global online gaming industry and is currently pursuing a career in regulatory compliance and government affairs in the U.S.