Pauma Tribe offer Virtual Casino with a Twist
06 September 2008
In an innovative attempt to attract gamblers to its Valley Centre, the Pauma Tribe of North County, California, are now offering online casino games.
State regulators are still deliberating whether the games are legal. A gambling watchdog group has also stepped forward to state that the games have no proper licensing.
Last month, the Pauma Band of Mission Indians, opened a virtual casino on their website. The games include video slot machines, card and table games. This is the first venture of its kind in the area. Players can gamble for fun or to win credits which can be redeemed at the tribes live casino. They have teamed up with GameLogic, the Boston based company to provide the online service. Now here is the twist, as long as there is no money changing hands, how can it be considered illegal?
Nelson Rose, a gambling law professor at Whittier Law School in Costa Mesa believes the tribe is offering a perfectly legal form of enjoyment.
“If you can’t lose, it’s not gambling.”
The US is the home of confusion over anything gaming related. It’s a very sensitive issue. State gaming officials are not quite as sure of the legality as professor Rose.
One spokeswoman for the California attorney general’s office claimed that they were unaware of the Pauma’s Tribes’ online gaming venture. The attorney general’s office enforces the state’s gambling regulations.
The state is now taking a keen interest in the Website. They are looking into the possibility that the games may be in direct violation of the terms of a gambling agreement signed by the gaming tribes. Under this agreement, tribes are unable to offer any form of gambling beyond their reservations. Not only is there a question mark over the legality of Pauma’s online virtual casino games, but the state is also looking into an issue over proper licensing.
GameLogic, Pauma’s partner, submitted an application for a vendor’s license. This was confirmed by Anna Carr, spokesperson for the state Gambling Control Commission. Any company that sells games to the tribes must be state licensed.
Carr said that the GameLogic license was still being processed. To be approved, the company must go through stringent background checks.
Executive director, Cheryl Schmit of Stand Up, a gambling watchdog group, felt that the method used to present the games online was legal but the Pauma Tribe was still in breach of their agreement, until their receive confirmation of the state approved license. She said that the games should have remained unavailable to the public.
“They would need to be vetted by the Bureau of Gambling Control (under the attorney general’s office) and approved by the Gambling Control Commission before they begin to play the game.”
There was a similar case back in 2006 when the NIGC (National Indian Gaming Commission), a federal agency which oversees tribal gambling, took the view that similar games offered by GameLogic were legal because “no gambling is done over the Internet, nor does any money change hands that way.”
One spokesperson for the group claimed that the games offered are of legal standing, they have already been approved, and already given the green light in several other states.
Joseph Guiste, the marketing director of Pauma’s Casino, said that the online move was nothing more than a marketing ploy. Their only aim was to advertise the Casino through the games.
Guiste claimed:“It’s really just a way for people to get involved and interact with us. People who play online play for longer periods of time at the casino.”
The tribe have big future plans for their casino which includes a $300 million expansion. They have set out the blueprint for a 19 story hotel, and a further 2500 slot machines. The reservation is roughly 20 miles north of Escondido. They have the backing of their partners, the Mashantucket Pequots’ Foxwoods Development Co.
Professor Nelson Rose, agreed that their new online games were a superb way to promote brand loyalty. He thought it was a great marketing ploy to give the players at the online casino a reason to return to the tribe’s live casino.
The reason? To redeem the credits they won online.
Players can pick up special cards at the casino. They can use these cards to play for points. They can use the points when they return to the casino, and use the credits to play on the gambling floor.
Most people are familiar with shopping discount points. This system is very similar. The card keeps a track of consumer spending habits. It is an efficient method to use when deciding on what to concentrate on, and where to allocate their marketing efforts. The consumers are rewarded by receiving discounts.
Professor Nelson Rose, said:
“The funny thing is that these promotions work. I think it’s very smart business.”
The Pauma Tribe is only taking advantage of legitimate marketing methods. They could use this new online casino to build a more loyal player base. If online gambling laws are slackened, they will also have the foundations in place to build a successful online gambling business.
Rose also said that a bill introduced earlier this year to the state Legislature has made it possible for tribal governments and gambling establishments to offer internet poker.
“A bill introduced in the state Legislature earlier this year would have paved the way for gambling establishments and tribal governments to operate poker games on the Internet.”
The state gambling regulators were asked in the Assembly Bill 2026, by Assemblyman Lloyd Levine, D-Los Angeles, to investigate what regulations would need to be put in place to legalize online poker. The bill was amended in August. The subject matter was changed to outdoor advertising.
Suzanne Graupner Pike, a problem gambling counselor, said that it was irrelevant whether gambling was legal or not. That the games still posed a risk. Her view was that the games would only encourage and promote addicting gambling habits due to the 24/7 availability of the internet.
“Online gambling is very addictive. This is scary.”
Pike was also worried that children may also gain access to the games in fun mode. She felt that there are not enough restrictions in place. That anyone could play.
Guiste responded by saying that the casino does not endorse gambling in any form to minors. They also included a problem gamblers hotline to protect visitors, who visit their website.
Last year, the state released a study which indicated there could be as many as 1.2million compulsive gamblers in California, alone. In a 2006 report by the California Research Bureau, it was estimated that problem and pathological gambling costs the state $1 billion. Taken into account are costs relating to bankruptancy, crime and public health services.
People with gambling problems or who know individuals with gambling problems are advised to call the Problem Gambling Help Line, (800) 426-2537, or visit www.problemgambling.ca.gov.
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