The California Legislature has passed a bill that would allow California Native American tribes to pursue legal action, including lawsuits, against cardrooms.
Senate Bill 549 is a big win for the tribes operating California casinos. At the same time, it raises plenty of questions about the cardrooms operating in the state.
Here’s a look at what this bill entails and how it could affect California’s tribes and cardrooms.
What does SB 549 allow?
“The passage of SB 549 is fantastic news for California’s tribal nations,” California Nations Indian Gaming Association Chairman James Siva said in a statement.
In short, the bill allows California tribes to take legal action against cardrooms to determine if they infringe on the tribes’ exclusive gaming rights. However, state Sen. Josh Newman said in a statement:
“It’s important to note that this bill does not presume to resolve this long-standing issue directly. Instead, it simply provides a path for the courts to rule [on] whether or not cardrooms are infringing on the tribes’ right to offer the games exclusively. California tribes deserve an opportunity to achieve clarity by simply having their day in court.”
The bill’s passage does not mean all California cardrooms are illegal and will be shut down. It simply means the tribes are within their rights to challenge them. And considering the history between the two, there’s a near certainty of that happening.
Conflict is rooted in California tribes’ exclusivity claims
California tribes believe they have exclusivity to legal gambling operations within the state. Cardrooms are legal; however, they are not operated by Native American tribes.
California tribes are permitted to offer lottery games, slots, and “banked” card games (think blackjack) at their casinos. These are games in which the casino acts as a bank and handles wagers. Conversely, the cardrooms operate under the player-dealer umbrella.
Tribes have in the past criticized cardrooms for utilizing this “umbrella,” which allows players to act as the house or bank. In their view, third-party banks circumvent the law.
In his statement, Siva noted that this battle has been going on “for over a decade.”
“All too often throughout history, tribes in California were promised certain treaty rights and even large tracts of fertile land that were taken away from us,” he said. “In those cases, we were stripped of our ability to defend those rights, as we were denied access to justice.”
It’s not just a matter of the tribes believing the cardrooms are hurting their gambling businesses’ bottom lines. It’s also about the bigger picture. John Christman, chairman of the Viejas Band of Kumeyaay Indians, said in a statement:
“This has never been a fight about gaming — it has always been a fight about civil rights and judicial access for tribes.“
Earlier this summer, cardroom employees and even local mayors protested the bill. At one protest, Gardena Mayor Tasha Cerda called cardrooms “the backbone” of her community. She said they provide vital tax services in addition to more than 1,200 jobs.
Should SB 549 become law and tribes take action to shut down cardrooms, the California Gaming Association believes it would eliminate 32,000 jobs across the state.
Municipalities may feel the fallout from SB 549
Again, the bill won’t automatically shut down all California cardrooms if it becomes law. But the fact that it would give the tribes grounds to pursue legal action is not a great development for the cardrooms. They and their supporters have been open about their opposition to SB 549, believing it would kill their operations.
Right now, there are almost 100 cardrooms operating legally in California. It’s estimated that they generate half a billion dollars in revenue for cities and towns across the state. And theoretically, those cities and towns would feel the effects of the bill.
A good example is The Gardens Casino. Shavon Moore-Cage, executive assistant to the city manager, told the Los Angeles Daily News last year that cardroom tax revenue makes up 68% of the city’s general fund.
However, tribal exclusivity has been the key phrase this year, with sports betting legalization talks ultimately stalling due to outside involvement. It’s clear that if California is going to expand its gaming industry, the tribes are going to demand exclusivity.
And that’s the case here. The tribes believe these cardrooms are infringing on their rights. Should SB 549 continue its trajectory, they will finally have the chance to prove that in court.
“If this bill becomes law, it will reflect a new day in California history in regard to the civil rights of this state’s tribal nations,” Siva said.
