The decades-long battle between California’s tribal-owned casinos and cardrooms is one step closer to the courts.
A bill allowing the tribes to take legal action against California cardrooms made progress in the state legislature. After months of being in limbo while under review, SB 549 is now with the California Assembly’s Governmental Organization Committee.
Legal battle centers around table games
Known formally as the Tribal Declaratory Relief Act of 2023, the measure reinforces state law prohibiting non-tribal entities from offering house-backed games. In the current legal landscape, California tribal casinos have exclusivity over slot machines and those games.
For example, the law technically prohibits cardrooms from offering blackjack. However, many operations have blackjack tables anyway. They circumvent the law by using third-party vendors as the house.
Thus, the house is not actually backing the game.
Previous legal challenges to this cardroom workaround have been unsuccessful. However, California tribes are undaunted in a quest to shut down these types of games at cardrooms.
“SB 549 is unnecessary and puts at stake the budgets of dozens of primarily underserved cities across the state during a $30+ billion state budget shortfall and recession,” said Kyle Kirkland, president of the California Gaming Association. “All to benefit a few wealthy gaming tribes who already do not pay state gaming or income taxes.”
Led by Sen. Josh Newman (D-Fullerton), a bipartisan group of ten legislators sponsored the bill. The measure aims to resolve “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.”
Newman introduced the bill in February 2023. Legislators amended the proposal in July to limit the legal actions of tribes that want to sue cardrooms.
“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,” reads the end of the legislative counsel’s digest.
Cardrooms ready for battle
Cardroom supporters and employees are fighting back in multiple ways.
More than 100 people showed up outside of Sen. Newman’s Fullerton office last December to protest the bill. They held signs featuring slogans like “SB 549 is a bad bet against us” and “Our jobs matter, say no to SB 549.”
Supporters and Cardrooms have also produced a fact sheet to support their position and plan to run ads against SB 549. Cardrooms have also used economic arguments for years to shore up their position.
The state’s 72 cardrooms support more than 32,400 jobs and pay nearly $500 million in state taxes. Many local government officials side with cardrooms in the debate and cite the economic impact of shuttering the popular gambling venues.
Compton Mayor Emma Sharif asserts that local cardrooms “generate a total economic impact of more than $100 million and bring 562 jobs that pay $24 million in wages.”
“These jobs and revenue are essential for improving the quality of life for people living in Compton who often lack the economic opportunities afforded to other communities,” Sharif added.
Next steps for SB 549
SB 549 could get a hearing at the end of January. If it leaves the committee, it would go to the Assembly floor.
A successful passage on the floor would take the bill to a Senate Committee chaired by Sen. Bill Dodd. Dodd blocked an extension of a moratorium on new cardrooms in 2022. As a result, tribes accused Dodd of showing favor to cardrooms.
