Proposed Rule Change Could Put California Card Rooms Out Of Commission

Posted on December 10, 2019

The seemingly never-ending struggle to establish a legal framework for gambling outside of tribal casinos in the Golden State has taken yet another turn. New proposed California card room changes may prove as ineffectual as their predecessors.

Like previous attempts to reform California card room operations, the state may fall short in actually enforcing the modified rules. The most recent proposal has received strong opposition.

The newest proposed California cardroom changes

The California Bureau of Gambling Control has an unenviable task. That is, enforcing unsettled state law.

The latest attempt at that is a new regulation that would affect the “banking” portion of California blackjack games. More specifically, it addresses the role of third-party proposition players.

In the current system, players are periodically offered the chance to assume role of banker, but are free to decline. When players decline, the third-party players, who are registered with the state and pay a percentage to the cardrooms, can continue in that role uninterrupted.

The new proposal would require the role of the banker to rotate every two hands. If all players decline, the game must end.

Players would be free to start a new game or move to a different table. The new rules don’t dictate that each player must take a turn as the banker, but simply that the same player can’t hold that position for more than two consecutive hands.

While this is somewhat about how the CBGC interprets state law, there is a bigger dynamic at play. Two equally-powerful forces in California are at odds with each other.

The proposed changes attempt to settle an industry feud

Tribal casinos feel California law gives them exclusive right to offer most card games, including Blackjack-style contests. They maintain that California cardrooms offering such games constitute illegal gambling.

Cardrooms, however, feel they operate in a legal loophole. Because the casino is not backing the bets with house money, but rather just facilitating the games for a commission, they have been able to operate.

That dispute has led to tribal casinos filing suit against the state in the past. Through the litigation, the casinos hope to force the CBGC to comply with their wishes.

Because the cardrooms have operated without penalty for decades, the CBGC is hesitant. Cardrooms also have the support of local governments who they pay taxes to.

Thus, the CBGC is left to thread a needle. It has to find a way to appease tribal casinos without destroying the cardrooms altogether.

Like with previous proposals, California residents have an opportunity to voice their opinions. The CGBC has three public hearings next week.

The details on the next two CGCC public meetings

The California Gambling Control Commission, which the CBGC is a part of, meets twice next week. The first is on Monday, Dec. 16 in Sacramento.

The commission will meet again in the state’s capital city on Wednesday, Dec. 18 and Thursday, Dec. 19. Although there will be a livestream of the open sections of each meeting, only those who are physically present will be able to take advantage of the public commentary time.

It’s unclear whether any of the California cardrooms or the trade unions representing their workers plan to attend the meetings. Individuals representing both parties have appeared at meetings in the past.

Whether the state actually adopts and then enforces this change remains to be seen. If the opposition is loud enough, that may be a sufficient deterrent.

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Derek Helling

Derek Helling is a freelance journalist who resides in Kansas City, Mo. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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