California cardrooms and the state’s tribal-owned casinos are sworn legal enemies in a battle over house-banked games. The tribes want the state legislature to enforce a state law prohibiting cardrooms from offering these types of games, primarily blackjack.
A battle with a long history
California cardrooms are on the defensive, arguing that they are not breaking the law. They use state-licensed third-party vendors, who act as the dealer so players can bet against “the house” legally. Cardrooms collect a fee from players who want to participate in games. The third-party vendors share their profits with the cardrooms.
This workaround has irked the owners of California casinos for years. Along with cardrooms, they are the only entities legally allowed to offer banked table games in the state. Last fall, the failed Proposition 26, which was largely supported by tribal casinos and would have legalized retail sports betting at tribe-owned gambling establishments, included a clause that would enable the tribal foes of the cardrooms to sue.
Now, after years of unsuccessfully trying to get courts to act on strict enforcement, the tribes may get some assistance from a bill in the California legislature.
Tribes have bipartisan support on SB 549
Introduced back in February by Senator Josh Newman, SB 549 is known formally as the Tribal Declaratory Relief Act. It would allow tribes to file legal action against cardrooms that offer house-banked table games “thereby resolving a decade-long dispute between California tribes and California card clubs concerning the legality of those controlled games and whether they infringe upon exclusive tribal gaming rights.”
The measure has bipartisan support with ten sponsors split equally between Democrats and Republicans. The bill is now in the assembly with the latest amendment added on July 10. In addition, the text of the newly amended bill outlines limitations of what the tribes can do when seeking legal recourse:
“The bill would prohibit a claim for money damages, penalties, or attorney’s fees and would require that actions be filed no later than April 1, 2024, as specified. The bill would clarify that it does not intend to authorize an action against the state.”
Furthermore, tribes would have to file their cases in Sacramento with the Superior Court of California.
In previous challenges to cardrooms, the California Cardroom Alliance outlined why the organization maintains that the lawsuit would hurt workers and local economies.
“We will continue to oppose specious tribal attacks on our industry, employees and communities,” organization president Kyle Kirkland said in 2019. “Tens of thousands of Californians count on cardroom living wage jobs to support their families, and dozens of communities rely on the tax revenue we generate to support vital public service.”
Many local officials agree, as cardrooms provide over 23,000 jobs statewide and approximately $100 million a year in tax revenue. San Jose councilmember Raul Peralez called the Prop 26 clause directed at cardrooms a “poison pill” that would cause massive losses in tax revenue and jobs. The city is home to two large cardrooms, Bay 101 and Casino M8trix.
What’s next for SB 549?
The California State Legislature’s summer recess began July 14. Members will reconvene on August 14. The last day to pass bills is August 31. The last day for the governor to sign bills is September 30.
Because the bill was amended shortly before recess, it must pass the Rules Committee. If passed, it would return to the state senate for a second approval before reaching the floor again.
Even if the bill does pass, tribal casinos will still have an uphill battle. A case could take years to come to a verdict and would most likely head to the state’s supreme court.
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