05:45 PM PST on Friday, February 5, 2010

Sacramento Bureau

An influential coalition of tribes with casinos released a report Friday criticizing an Inland tribe’s proposal to legalize internet poker.

Coming just days before a legislative hearing on the subject, the study by former state finance director Mike Genest found that legalizing internet poker in California would cost the state an estimated $365 million annually in lost revenue-sharing payments from tribes that operate casinos.

In return, the state would earn, at most, $50 million from state-sanctioned internet poker, Genest concluded. Many on-line poker players in the state would continue to use illegal, offshore Web sites, in part to avoid the state’s income tax.

“In this new market, you’d be reporting to the government exactly what you’re winning,” Genest told reporters Friday during a briefing at the Sacramento office of the California Tribal Business Alliance, which commissioned the review.

Riverside County’s Morongo Band of Mission Indians is trying to get support for a proposal to create a “tribal intrastate Internet poker consortium” with card clubs. It would be the first intrastate poker site in the country.

Tribal chairman Robert Martin has argued that tribes need to expand beyond bricks-and-mortar casinos or risk losing more customers to on-line poker.

Friday, a spokesman for the Morongo tribe criticized Genest’s letter as a hastily crafted attempt to undermine the tribe’s proposal ahead of Tuesday’s informational hearing on internet poker in the Senate Governmental Organization Committee.

Spokesman Patrick Dorinson pointed to recent efforts by Mastercard and Visa to block credit-card transactions involving illegal poker sites. As a result, Dorinson said, an intrastate poker consortium would be much more successful than Genest projected.

“This goes to what we have said all along: that California needs a regulated intrastate game that offers consumers protection from unscrupulous operators and maximizes revenue to the state,” Dorinson said.

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