California Governor Approves SB 549, Allowing Tribes to Sue Card Rooms

By Jerry Smith Staff Writer Updated: 10/11/2024

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California Governor Approves SB 549

On September 28, 2024, California Governor Gavin Newsom signed Senate Bill 549 (SB549), also known as the Tribal Nations Access to Justice Act, into law. The bill gives California’s tribes the right to file a one-time lawsuit against card rooms. The lawsuit will challenge whether certain games, particularly those involving third-party proposition player services (TPPPS), violate the tribes’ exclusive rights to operate casino-style games under state and federal law.

Background: The Dispute Between Tribes and Card Rooms

For decades, California tribes have had exclusive rights to casino-style gambling under the Indian Gaming Regulatory Act and state law. But tensions grew when card rooms started using third-party companies, known as TPPPS, to act as the bank in games like blackjack.

Tribes argue that this violates their exclusive right to offer these types of banking games and undermines their sovereignty. As sovereign nations, tribes haven’t been able to sue the card rooms directly.

SB549, which Governor Newsom signed into law, changes that. A one-time exception allows tribes to take the card rooms to state court over the TPPPS issue. The lawsuit must be filed by April 1, 2025. The tribes can’t seek monetary damages, but the court can issue a final ruling to allow or stop these games.

The bill says:

The court may make a binding declaration in either affirmative or negative form and effect, which shall have the force of a final judgment, and may issue injunctive relief enjoining further operation of the controlled game or grant any other relief the court deems appropriate.

Tribal Leaders’ Reactions

Tribal leaders are calling SB549 a major win. James Siva, chairman of the California National Indian Gaming Association (CNIGA), described it as a reasonable solution to a decade-old dispute. “For much of California’s history, tribes haven’t had access to justice to defend what was rightfully ours,” Siva said. “But with this bill, Governor Newsom is fulfilling the spirit of his 2019 apology, allowing us to seek justice and protect our rights.”

The bill was originally conceived by the Viejas Band of Kumeyaay Indians and received widespread support from tribal nations. John Christman, chairman of the Viejas Band, stated:

California’s past has been tragic for tribes, but this bill marks a significant recognition of our rights and a renewed commitment to the future of Native people in the state.

Opposition from Card Rooms and Economic Concerns

Despite the tribal support, SB549 faced pushback from California cardrooms, which warned that a ruling for the tribes could bring serious economic fallout. Many card rooms rely on revenue from these games, and if TPPPS is banned, some of them could be forced to close. This would affect local tax revenue used for essential services like police, fire departments, and schools.

Cities like Commerce and Hawaiian Gardens are especially worried. According to Cal Matters, these cities could lose up to half of their annual budgets if card rooms shut down. San Jose, California’s third-largest city, stands to lose about $30 million a year.

While tribes see SB549 as a long-overdue step toward justice, the card rooms face an uncertain future. The outcome of the court’s decision could reshape gambling in California, especially since cardrooms generate far less revenue than tribal casinos.