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Native American tribes are often pitted against the top sports betting apps in control of the California betting market. But… that’s not really the main fight going on in the Golden State.
The true battle is between those tribes and California card rooms. A year ago, the tribes sued the card rooms, and if they win, the card rooms could lose their right to offer blackjack and player-dealer games.
It’s ongoing, but we’re finally getting some fresh updates. So far, the card rooms are winning, but it’s far from a guarantee that will remain the case. Keep on reading, and we’ll update you on the situation.
California Card Rooms Win Injunction
Back in February — on their own accord, not necessarily because of the tribal lawsuit is finished (it’s far from it) — the state of California passed two new sets of rules that effectively nerfed state card rooms.
One was prohibiting specific parts of a blackjack game (e.g. getting rid of busting or automatic wins from 21 hands). Period. Technically, this was always a ban. Tribes have the right to offer these house-banked games in the state. But… card rooms got around that loophole by offering blackjack games where a third party serves as dealers, not the house. The law change essentially undercuts the whole point of the game, making it undesirable to offer.
And speaking of those third-party bankers, the second rule targeted the practice directly. It forces regular players to also take turns as the bank for blackjack games. The issue with that is that most players don’t want the responsibility. This rule fundamentally changes the business model and playing experience. Not great.
Those rules, however, have been put on pause. After the card rooms sued the state back over those regulations, they were granted an injunction by San Francisco Superior Court Judge Richard Darwin. This injunction lasts 45 days.
“I find that petitioners are very likely to prevail on their argument that in issuing the new regulations, the [Bureau of Gambling Control] acted in excess of its jurisdiction,” Darwin said.
Card Rooms Ready To Keep Fighting
“It reinforces what we’ve said all along, that the Bureau of Gambling Control is overstepping its authority, and that these regulations would bring irreparable harm to these communities,” said Kyle Kirkland, president of the California Gaming Association and owner of the Club One Casino in Fresno.
We want to double-click on the line “irreparable harm to communities.” On its face, that might sound like hyperbole. It’s not, though. Card rooms are a sneaky important part of many of the smaller communities they operate out of.
Why? They pay city taxes, and a lot of it. For smaller cities, that tax money is not a rounding error like it might be in Los Angeles. No, no, small cities depend on it to pay for public services. Think police, fire department, road work, city politicians, and more. Many of these communities can’t fill that revenue loss easily.
Don’t believe us? Welp, two cities — Commerce and Bell Gardens — declared fiscal emergencies as soon as the new rules were passed. Commerce has the largest card room in California, while Bell Gardens has the third-largest.
Both cities were worried enough to put sales tax hikes on the June ballot to make up for expected budget holes. That tells you how dependent some places are on card room money. In Bell Gardens, tax revenue from Parkwest Bicycle Casino alone makes up about 40 percent of the city’s general fund. Forty percent! Lose that overnight, and yeah, it could be catastrophic.
So yes, there’s a lot riding on these lawsuits. California card rooms’ entire business model is on the line, and they know this is a small win in an ongoing war.
“We’re deeply appreciative to the judge, but you also have to think about what your Plan B is if our arguments for some reason don’t find traction,” Kirkland said.
Tribes Still Have The Bigger Fight Ahead
The injunction gives card rooms some much-needed breathing room, but this issue isn’t resolved. Not even close.
The first tribal lawsuit is still ongoing, and that’s the real war that’ll decide this. The tribes argue that card rooms have been offering games that look too much like casino-style blackjack for years, and they want the courts to finally shut that down. After all, a compact with the state gives the tribes the sole right to offer Class III gaming in California.
Card rooms, obviously, see it very differently. Their argument is that they’ve operated under California rules for decades (before tribes, in fact) and built entire local economies around that model (our examples prove there’s truth to that).
That’s why this issue feels so high-stakes. It’s like a Hollywood plot that involves money, power, city budgets, tribal gaming rights, and who controls legalized gambling in the most affluent state in America.
So yes, card rooms won this round. But it’s a temporary win, and everyone involved knows it. The rules are paused, not gone. The tribal case is still alive. And until the courts settle the bigger question, California card rooms are living on borrowed time.
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