Time and again, California Indian tribes have tried to fend off cardrooms and other gambling venues, which they claim infringe on their exclusive gaming rights in the Golden State.
To end all the bickering, Sen. Josh Newman (D) has introduced a bill known as the Tribal Declaratory Relief Act of 2023.
The bill, SB 549, was introduced in March and would allow Indian nations to sue cardrooms for operating banking card games.
Tribes could get one-time lawsuit
Under SB 549, tribes will get a one-time lawsuit to resolve any gambling-related disputes.
On the other hand, cardrooms have called the bill anti-competitive and are vehemently opposed to it. They are not pleased with the arrangement, which affords them no leeway to counter sue their competitors.
While California cardrooms are legal and have a long tradition in the Golden State, the state prohibits the offering of banking games like blackjack.
California cardrooms had been skirting the law by offering a variation of blackjack in which a regular player at the table served as the bank against other players. They made their money by collecting fees paid by players to participate in each hand.
A look at SB 549
SB 549 is the windfall Indian nations had been waiting for. It is backed by 21 local tribes, and the intent is explained in the bill as:
“To authorize a California Indian tribe, under certain conditions, to bring an action solely against licensed California card clubs and third-party proposition player services providers to seek a declaration as to whether a controlled game operated by a licensed California card club and banked by third-party proposition players services provider constitutes a banking card game that violates state law and tribal gaming exclusivity under Section 19 of Article IV. of the California Constitution and a tribal-state gaming compact or secretariat procedures.”
Important points of SB 549 include:
- Tribes are required to file the case in the Superior Court of California, County of Sacramento.
- If the bill passes this year, tribes must file their case no later than April 1.
- Merge multiple actions filed into one lawsuit.
- No claims for monetary damages, penalties or attorney’s fees will be permitted.
It’s worth noting that according to the California Gambling Control Commission, California has a total of 85 cardrooms, many of which are located in heavily populated areas. Together, they provide the state with hundreds of millions of dollars in tax revenue, and put more than 18,000 people to work.
In contrast, tribal operators are not obliged to pay taxes.
Opposition to the bill
The strongest opposition to SB 549 comes from cardroom employees, their families, and friends, who all know the threat this bill poses to their livelihoods.
Vishal Dave, a cardroom employee, started a petition on Change.org. He and the undersigned argue that SB 549 could result in job losses, thereby threatening the survival of families that are dependent on cardroom employment.
“This is a clear attempt to seriously hurt cardroom business, shut down cardrooms, and eliminate competition. If this bill is passed, it will put thousands of people out of work and devastate the economies of the communities where cardrooms operate.”
What’s the difference between casinos and cardrooms?
In cardrooms, players play cards for money, but they don’t bet against the house like at a casino in Vegas. Cardrooms instead partner with third-party professionals, and they pay the cardrooms from what they make as the bank.
Tribal casinos have long objected to this practice. They claim it is illegal since state law gives tribal casinos the exclusive right to Vegas-style gambling.
Tribes have tried to schlepp cardrooms to court over their use of third-party bankers, but all attempts were dismissed for lack of standing.
Two months ago, state Governor Gavin Newsom signed a moratorium on any new cardrooms opening in the state.
What lies ahead?
The next step for SB 549 would be to get through the Assembly Judiciary and Governmental Organization committees before the legislature enters summer recess at the end of July.
If that doesn’t happen, it can stay in Rules purgatory into next year, and the tribes can look to build momentum for it again in 2024.
However, even if the bill passes, it could take four to ten years to obtain a final court verdict on the legality of California cardroom games. And with such far-reaching consequences, the case could easily be brought before the Supreme Court.