California Cardrooms Oppose Bill Which Aims to Increase Tribal Casino Influence

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More than 100 employees of California cardrooms gathered outside the office of Democratic state Senator Josh Newman in Fullerton, California, on Wednesday, December 6 to protest Newman’s support of Senate Bill 549.

SB549 is also known as the Tribal Declaratory Relief Act of 2023. It is the latest attempt to solve the long-running dispute between Tribal operators of California casinos and the state’s cardrooms.

If passed, the bill could open the door for lawsuits from the Tribes against state cardroom operators, who they say violate the terms of their gaming compacts.

The bill has sparked protests from cardroom employees and supporters who are concerned about potential jobs and revenue losses in their industry.

Long-Standing Dispute

Currently, federally recognized tribes have the freedom to offer slot machines, lottery games, and “banked” card games, such as traditional blackjack, where the casino acts as the bank managing wagers.

Cardrooms, meanwhile, are limited to offering “player-dealer” games like poker, pai gow, baccarat, and Texas Hold ‘Em.

SB549 aims to grant Indian casinos the authority to file lawsuits against cardroom operators they claim are actually offering banked card games.  

Currently, Tribal casinos cannot take civil actions against cardrooms because of their status as sovereign nations.

However, California’s casinos are among some of the most popular and profitable in the U.S. Tribal casino sector. In 2022, total revenues from the 70 such California venues passed $11.8 billion.

Cardrooms Hit Back

California cardrooms unsurprisingly oppose the bill. They point out that they are significant sources of tax revenue for city and county general funds, crucial for funding public services, such as education, public safety, health, infrastructure, and homelessness programs. So hitting them with lawsuits could hurt local communities.

“This is a thinly veiled attempt to close down cardrooms by the same few wealthy tribes who have failed in their repeated attempts to shut us down for years,” said Keith Sharp, president of the California Cardroom Alliance.

One city employee in Hawaiian Gardens, California, where the Gardens Casino cardroom is located, told local media that the city’s finances would suffer if the cardroom were to shut down because of lawsuits.

“The tax revenue we get from our cardroom represents 68% of our city’s general fund,” Shavon Moore-Cage told SiliconValley.com. “For other cities, that might be 18% to 40%. But we are a worst-case scenario. This money funds public safety, after-school programs, senior services, and fire services.”

Continuing Issue

The proposal of SB 549 follows the rejection of Proposition 26 last year. That rejected ballot measure would have allowed Tribal casinos to run roulette and dice games, as well as California sports betting, while tightening rules on what games cardrooms could offer.

Supporters of cardrooms, many with their livelihoods on the line, say that SB549 simply rehashes some aspects of the state’s soundly shut down Prop 26 on sports betting.

Senator Newman, in defending the bill, stated that it does not take sides, but merely allows the courts to decide on the matter.

“I’m carrying the bill, but I have no cardrooms in my district, nor Tribal lands, so I’m pretty neutral on this. But I sympathize with the argument that this is something the courts should be allowed to decide,” the Senator said in an interview outside his office on Wednesday.

Elsewhere in recent California gambling news, the state’s Tribes have been largely unsupportive of the latest plan for legal sports betting in the Golden State. The bold proposal suggested moving offshore sportsbooks into legal partnerships with state Tribes. But Tribal leaders were not happy the plans were published before they were consulted.

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