Earlier this month, California Assembly Member James Ramos introduced a bill to reinstate the 25-year moratorium on cardrooms. The current ban expired on Jan. 1 after lawmakers failed to renew it last September.
Sen. Bill Dodd was instrumental in ending the moratorium. He currently chairs the Senate Governmental Organization Committee, which handles all gaming issues in the Golden State.
Dodd’s actions put California’s relationship with the state’s tribes in jeopardy. California cardrooms are essentially poker rooms. However, in recent years, operators began using third parties to fund what would typically be considered house-backed games.
On the other hand, the tribes have exclusivity over Las Vegas-style casinos. Several tribes feel those cardroom loopholes infringe on their exclusivity and argue cardrooms operate illegally. As a result, tribes support blocking the further expansion of cardrooms through the moratorium.
If passed, Ramos’ AB 341 would bring back the moratorium until 2043, effective retroactively back to Jan. 1.
The future of sports betting in California could hinge on return of moratorium
There are nearly 100 cardrooms across California. According to the California Gambling Control Commission, there are over 1,800 tables in operation at any given time. Most of those tables are spreading Texas Hold ’em games. It’s the most popular game in cardrooms.
The state’s Bureau of Gambling Control is accepting applications for new cardrooms and requests to expand existing ones after the moratorium ended on Jan. 1. If California sports betting is ever going to become a reality, legislators might need to bring the moratorium back.
Dodd at odds with tribes
California legislators – especially Dodd – have not been on the best terms with tribal leaders in recent years. Dodd tried to legalize sports betting in 2020 with SCA 6, an act that favored out-of-state sportsbooks, professional sports leagues and cardrooms more than the tribes. Like the 2022 ballot initiatives, the tribes banded together to defeat it.
The Yocha Dehe tribe claimed that $94,000 in donations from cardrooms played a role in Dodd’s actions. The tribe, which operates Cache Creek Casino Resort in Dodd’s district of the northern Bay Area and Delta region, sent out mailers saying he held the cardrooms’ best interests above those of the citizens and tribes.
Moratorium could ease tensions
With both sports betting measures failing miserably in 2022, California must look ahead to a unified solution that appeases California’s tribes. Any shattered relations could crush the possibility of legalizing sports betting in California. The moratorium could be a step in the right direction, said Matthew Kredell, senior writer for legislative affairs at PlayUSA.
“It’s a legislative priority to put the cardroom moratorium back in place with a concession for the modest expansion of small cardrooms. If the Legislature wants to take a look at sports betting over the next two years, the cardroom moratorium needs to get done first.”
Bill would allow modest expansion by smaller cardrooms
The moratorium began in 1995 and led to the Gambling Control Act of 1997, which prevented existing cardrooms from expanding and new ones from opening.
California’s cardroom history dates back more than 150 years. The 85 licensed rooms in the state produce significant revenue for the cities where they operate, requiring some room for compromise in the bill. New cardrooms would provide additional revenue to dozens of communities statewide if their applications are accepted.
If passed, AB 341 would nullify those applications. Under it, no new cardrooms or large-scale expansions could take place. Existing cardrooms with 20 or fewer tables would have the possibility to expand with the following limitations:
- Two new tables in the first year
- Two more tables every four years, with a maximum of 10 new tables in total
This new caveat allows smaller rooms to grow their revenue and, in turn, give back more to their local communities. Two San Jose cardrooms are exempt from the bill, as they are set for 30-table expansions as approved by voters in 2020.
Dodd still stands in the way
Now that Ramos’ bill has been introduced, 30 days must pass before the Assembly Rules Committee assigns it to the appropriate committee for voting. If the bill passes with a majority vote, it receives second and third readings in the Assembly, where it needs to pass with a majority vote once more.
Assuming the bill passes through the Assembly, it will move on to the Senate and undergo the same process.
Last September, the one-year moratorium extension bill passed in the Assembly before Dodd’s committee shot it down. Dodd urged committee members to end the moratorium at a committee hearing.
“The point is defeating this bill at this committee here today is the most important thing we can do to get things on track and to get something done. And, frankly, what I’m here to say is this Legislature and our committee has been a pawn in this moratorium situation for a long time, maybe 25 years.”
Dodd said earlier this year that he would work with stakeholders to find a solution, but to this point, he has yet to act on those words. If he remains firmly opposed to extending the moratorium, he could influence his committee to reject AB 341.
However, he might eventually see the long-term implications of driving a wedge between himself and the tribes. It may not be a price he’s willing to pay. If so, we might see the bill signed into law by Gov. Gavin Newsom in the coming months.