End Of Cardroom Moratorium Could Hurt Legislative Efforts For CA Sports Betting

Written By Matthew Kredell on November 7, 2022
Tribal Leader Doubts CA Sports Betting Compromise

In the aftermath of Tuesday’s expected election losses for the California sports betting propositions, many hope for the legislature to work on the issue next year.

But the end of a moratorium on cardroom expansion could complicate matters on a legislative solution for California sports betting.

Pechanga Chairman Mark Macarro told PlayCA that the handling of a proposed extension of the moratorium by the Senate Governmental Organization Committee damaged tribal trust in the legislature.

The Governmental Organization Committee, chaired by Sen. Bill Dodd, handles all gaming issues. Any sports betting discussions would have to start in the committee.

“After the way Chairman Dodd handled the moratorium bill, I don’t see tribes trusting the legislature to do sports betting,” Macarro said. “We didn’t expect him to support the extension of the moratorium. But we didn’t expect him to so brazenly say this thing has to end and I’m going to be the one to do it.”

History of cardroom expansion moratorium

The Gambling Control Act of 1997 established a regulatory framework for the California cardroom industry. It also set a 10-year moratorium for new cardroom licenses or adding tables at existing cardrooms.

The legislature periodically has extended that moratorium ever since. The moratorium has lasted 25 years.

Originally, existing cardrooms supported the moratorium so as not to face new competition.

As time went on, many cardrooms wanted to increase the number of table games offered. Some even got local approval from their cities to do so once the moratorium was lifted at the state level.

But tribes question the legality of blackjack-type games offered by cardrooms. So they opposed allowing cardrooms to add more of these tables.

In 2018, the Governmental Organization Committee agreed to expand the moratorium for three more years. This came with a promise that the parties used that time to work out a compromise. The moratorium on additional cardrooms would continue but existing cardrooms could modestly increase their tables.

Dodd thought the Senate had that compromise last year in SB 576. The bill from Sen. Bob Archuleta allowed cardrooms to increase tables by two a year to a total of 10 additional tables. The Senate overwhelmingly passed the bill 30-2.

But tribal opposition took hold in the Assembly, and it never got a hearing.

Moratorium bill in 2022 legislative session

With the moratorium set to end at the end of the year, Sen. Rosilicie Ochoa Bogh tried to push a one-year extension late in the session.

Tribes of course supported SB 637, which passed unanimously in the Assembly. But so too did many cardrooms.

At an Aug. 30 hearing in the Senate Governmental Organization Committee, cardrooms split with most in support of extending the moratorium.

Ed Manning, a lobbyist representing the California Cardroom Alliance that included Commerce Casino, the prominent Los Angeles-area card club, said that the sports betting propositions battle got in the way of table game expansion talks in 2022.

“We were unable to find a path this year, in part because of the political climate because of the initiatives on the ballot and the PAGA (Private Attorneys General Act) provision in there,” Manning said. “We think when we get past Prop 26 in November, we can have a better discussion and hopefully a framework.”

Communities for California Cardrooms (CCC) campaigned to oppose extending the moratorium. Five Parkwest casinos are part of the CCC. So is Napa Valley Casino, which is in Dodd’s district.

San Jose Councilmember Raul Peralez opposed the bill because voters approved an expansion of 30 table games for its two cardrooms in 2020. Now the San Jose cardrooms will be able to apply for those expansions on Jan. 1.

Tribes indicated they were ready to compromise

Ochoa Bogh said this one-year extension would be different than the others that have gone nowhere. She said she had written assurances from the California Nations Indian Gaming Association and Morongo Band of Mission Indians that they are committed to the discussions on expanding table games.

But Dodd was fed up with extending the moratorium again without compromise.

“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 engineered a 3-3 vote to prevent the bill from advancing to the Senate floor, where it likely would have passed. Nine members didn’t vote.

“He ended the moratorium, and some people we thought would be in those seats and be our supporters didn’t vote,” Macarro said. “And as they say in Sacramento, a walk is as good as a no.”

Moratorium resolution could set stage for sports betting

California Indian tribes already had issues with Dodd for how he tried to push SCA 6 in 2020. The bill attempted to get tribes to compromise on online sports betting.

That already had Macarro wary of dealing with the legislature on sports betting.

“The legislature falls prey to arguments by the card clubs and everyone else,” Macarro said.

Now many tribes are really upset with Dodd and the Governmental Organization Committee. But Dodd pledged to work with all sides over the break. He said his goal was to come back in January with a deal ready and fast-track it through the legislature.

Handling the moratorium issue early in the 2023 session could help clear the way for sports betting discussions. For his part, Dodd told PlayCA that he is willing to try again for a legislative solution on sports betting.

“Some tribes have expressed interest in discussions with the legislature on sports betting. I stand ready to work with all parties to see if we can reach a deal that benefits our state and tribal governments.”

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