California tribes will have a chance to sue the state’s cardrooms over a dispute regarding their exclusive gambling rights. The news became official after Gov. Gavin Newsom recently signed Senate Bill 549.
The Viejas Band of Kumeyaay Indians initially sponsored the bill, which garnered the support of more than 70 tribal leaders.
With its passage, the tribes can collectively file one lawsuit against California cardrooms by April 1, 2025, and challenge their ability to offer certain games other than poker.
Sen. Josh Newman (D) introduced SB 549 in March 2023 as the Tribal Declaratory Relief Act of 2023. The California Legislature passed the bill on Aug. 31, enabling the governor to sign it into law.
Bill gives tribes an avenue to plead their case
The history of California tribal gaming dates back to the 1980s, most specifically, the Indian Gaming Regulatory Act (IGRA) passed in 1987. By the time tribal casinos opened, California cardrooms had already established a stronghold.
Fast-forward to today, and both have been operating for decades. The IGRA grants tribes exclusive gambling rights in California, which covers lottery games, slot machines, and “banked” card games with a house edge, such as blackjack.
However, California state law also allows and regulates third-party providers of proposition players (TPPPS), which effectively replace the house. Cardrooms, which run player-dealer games (like poker), have used TPPPS since 2007 to offer additional games of chance.
The tribes have long alleged these TPPPS infringe on their exclusivity. Now, they have six months to file a lawsuit and plead their case to the state.
“We are incredibly pleased that the California Legislature and Governor Newsom have turned good legislation into law,” said California Nations Indian Gaming Association (CNIGA) Chairman James Siva in a press release.
“This law simply provides a reasonable solution to a decade-old dispute and provides clarity to tribes, the state, and commercial cardrooms. This is good and fair public policy for all parties concerned.”
Tribes’ sovereign status prevented earlier lawsuits
While the tribes have opposed cardrooms that circumvented the IRGA, they’ve also had their hands tied on the issue. Tribes operate as sovereign nations with jurisdictions different from commercial cardrooms and, as a result, couldn’t sue them.
SB 549’s passage grants California tribes a one-time exemption to file a lawsuit.
The lawsuit can only address cardrooms using TPPPS, and tribes cannot seek monetary compensation for potential lost revenue. Still, Siva said that by signing the bill, Gov. Newsom made good on an apology to the tribes in 2019.
Siva added, “California’s past has been tragic for tribes, but this bill represents an important recognition of our rights and renewed commitment to the future of the state’s Native people.”
In response, cities whose cardrooms generate significant local tax revenue expressed concerns over losing TPPPS. They also fear job losses and business closures.
These cities, small and large, rely on cardrooms to help fund necessary resources like police, fire, and education. The cities include Bell Gardens, Commerce, Hawaiian Gardens, and San Jose.
Tribes, cardrooms must accept the final ruling
With SB 549’s passage, California tribes will have until April to come together and present their lawsuit.
Despite being major contributors to local governments, cardrooms only generate a fraction of the revenue generated by tribal gambling. That amount is still significant to the tribes, though, and they believe it should be theirs.
The question remains: Will the courts agree with the tribes or side with the cardrooms? Whichever outcome, both parties must accept the ruling.
If the tribes win, cardrooms will have to scale back and terminate all TPPPS operations, regardless of the financial consequences.
Similarly, the tribes will have no further recourse if they fall short in their attempt. If this occurs, cardrooms will continue to operate just as they have for nearly two decades.