San Jose City Council Strengthens Support For Cardrooms At Precarious Juncture

Written By Derek Helling on January 21, 2021

It’s an interesting time to run a cardroom in California. At the very least, the two San Jose cardrooms don’t have to wonder about where most of the members of the local city council stand on issues pertinent to their future.

The council nearly voted unanimously to join a lobbying group for California cardrooms earlier this month. With both the present and future unclear for that segment of California gambling, the cardrooms no doubt greatly appreciate the support.

The details on the lobbying group for San Jose cardrooms

In the early days of the new year, San Jose’s council members voted 10-1 to become part of the California Cities Gaming Authority. It’s essentially a lobbying arm of cities like San Jose that are home to medium-sized cardrooms. Both Bay 101 and Casino M8trix call San Jose home.

Joining the authority costs San Jose $30,000 annually and requires one representative to sit on the board. That representative must be a city councilmember. The council must also choose another member to serve as an alternate for the authority’s board.

So what’s in it for the city? More leverage to protect its interest in cardroom operations. And the authority has connections in Sacramento among lawmakers.

San Jose has a very tangible stake in its cardrooms flourishing. The city depends on local taxes garnered from gaming at the facilities. For example, San Jose collected a total of nearly $19 million in tax dollars from 2018 to 2019. Should state regulations limit or shutter cardrooms, that could mean fewer dollars for municipal projects.

That may be on the horizon due to recent changes in state government. The continuing COVID-19 pandemic continues to play a role in this situation as well.

Effect of COVID-19 protocols on CA cardrooms

As the coronavirus pandemic has raged on in California, cardrooms have been some of the most-affected businesses. They’ve had to adhere to restrictions set forth by Gov. Gavin Newsom.

Those restrictions have been quite tight in order to mitigate the spread of the virus, which, in turn, has severely reduced cardrooms’ income.

It’s unclear when Newsom will ease the restrictions. Lobbying efforts may help to speed up that process. However, that isn’t the only thing that is concerning for owners of businesses like Bay 101 and Casino M8trix.

California may need a new attorney general

California Attorney General Xavier Becerra has been nominated to fill a position within the administration of President Joe Biden. Should the US Senate confirm Becerra as the head of the US Health and Human Services Department, California will need a new attorney general.

Because Newsom hasn’t named a presumptive replacement, the possible effects of this change on California cardrooms is also unknown. Becerra wasn’t the friendliest to cardrooms, proposing enforcing regulations to limit the scope of games they could offer.

Becerra wanted to end third-party banked games at cardrooms. He never really actually followed through on those threats, though. His replacement could actually make good on them. Cardroom owners say that would put them out of business.

Codifying the legal status of cardroom offerings would limit that danger for operators. That makes lobbying the appropriate legislators of pivotal importance. San Jose is now contributing its resources toward that end.

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Derek Helling

Derek Helling is a lead writer for PlayUSA and the manager of BetHer. 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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