For nearly 28 years, California had a moratorium on adding new card rooms in the state.
However, a new day has arrived. The moratorium expired Jan. 1, 2023.
Essentially, the moratorium banned new card rooms from opening in California. That means, for the first time since 1995, new card rooms are allowed to open in California.
While the moratorium was in place, the number of active card rooms in California declined steadily. The only way for new owners to enter the industry was to buy an existing card room and follow the state’s strict rules for transferring ownership. (The moratorium did not apply to tribal-owned casinos that offer card games.)
Now, the proverbial wall blocking new card rooms from opening has fallen.
Here is a brief breakdown of card room politics in the state, and what the moratorium expiring means for the venues and local economies moving forward.
The Evolution of Card Rooms and the Moratorium
Card rooms in California originated in saloons with card tables during the Gold Rush in the mid-1800s. At one point, historians estimate that hundreds of card rooms, perhaps more than 1,000, existed in California.
The state prohibited card rooms from offering house-banked games in 1872 but excluded poker. Card rooms use a loophole to skirt the rule to offer games such as blackjack by using third-party companies to function as the house. Players can also take turns being the dealer to get around the state’s house-banked restriction.
State legislation to restrict expanding card rooms or licensing new ones began in 1995. The 1997 Gambling Control Act continued the moratorium and the state legislature voted on the last extension in 2011.
Last September, a bill to extend the moratorium failed in the state legislature, which led to it expiring in 2023.
The direct competitors of card rooms are tribal-owned casinos with table games. The card rooms and tribal casinos were at odds in 2022 over a clause in the failed Prop 26. It would have allowed sports betting in the tribal casinos and enabled the tribes to sue card rooms directly for using a workaround to offer blackjack.
With the proposition’s failure on the November 2022 ballot and the moratorium’s expiration, the door is now open for expanding existing card rooms and opening new ones.
Conditions for New Card Rooms
Per state rules, anyone who wants to open a new card room must have satisfactory answers to the following questions when applying to the CGCC.
- Does the local jurisdiction have a gambling ordinance?
- Does the gambling ordinance allow for additional card rooms?
- Does the gambling law allow for additional gaming tables?
- Does the gambling regulation comply with the requirements of California’s Business and Professions Code section 19860?
- Was an election required to amend the local ordinance? If the amendments were approved, have they gone into effect?
- Has the owner received all necessary local approvals to open a new card room?
Even if a license is approved, the state may set conditions on the card room. These conditions are public information and are listed on the CGCC’s website. For example, the CGCC ordered that Outlaws Card and Parlour in Atascadero adhere to strict rules regarding the card room’s cage to limit access by unlicensed employees.
Some conditions require card rooms that are under investigation to provide regular compliance updates.
Conditions to Expand Card Rooms
As of January 2023, there are 84 active card room licenses, but only 59 of those businesses are operating. The rest are inactive. Card rooms that want additional tables must meet local and state rules before expanding. During the moratorium, some jurisdictions added further restrictions on the number of gambling tables allowed in card rooms.
Once a card room makes sure that expanding doesn’t violate local rules, it must submit a request to add more tables to the California Bureau of Gambling Control (CBGC) for review. The card room expansion request will be passed on to the California Gambling Control Commission (CGCC) if approved.
The CGCC staff will schedule a public hearing on the request before voting on approval.
If an existing card room owner wants to change the name of their venue, they must let the bureau know before the change is made. Additionally, if the owner wants to sell the card room, the new owner must pay a fee, submit documentation to the CBGC, then get approval from the CGCC.
The Economic Impact of Card Rooms
As card rooms provide millions in revenue to communities and often have the backing of local politicians, the expansion of the venues could help cities and counties increase employment numbers. It could add more money to government coffers for programs that benefit the public, too.
According to the California Gaming Association, card rooms employ over 32,400 people, generate approximately $1.6 billion annually in wages, and pay nearly $500,00 in state taxes yearly.
In Compton alone, the local card room, Crystal Casino, adds 562 jobs and $24 million in wages to the city’s economy. According to mayor Emma Sharif, this revenue is “essential for improving the quality of life for people living in Compton who often lack the economic opportunities afforded to other communities.”