California Passes New Legislation to Give Tribal Casinos a Day in Court

By Jerry Smith Staff Writer Updated: 09/16/2024

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Jerry’s greatest advantage is his extensive experience on the casino floor. His time as a casino manager taught him everything about what makes a player tick. Besides being a skilled poker player, he has deep knowledge of all live table games and gambling regulations in the US.

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California Passes New Legislation

Following the Senate’s last day in session for 2024, California’s gambling industry will experience significant changes. The Senate unanimously approved an amendment to SB 549, allowing tribal casinos to sue California cardrooms for infringement of their exclusive rights. While final approval from Governor Gavin Newsom is still pending, this legislation could help resolve some long-standing issues within the state’s gambling industry.

Context and History of California’s Tribal Casinos

As the home of the Cabazon Band, the catalyst for the Indian Gaming Regulatory Act, California is aware of the importance of tribal gaming. Since March 7th, 2000, tribal compacts in California were allowed to operate Nevada-style gambling games, such as blackjack, slot machines, and house-banked poker. Many tribes rely on these rights to sustain themselves and improve their communities.

However, since 2007, some card rooms have begun hiring third-party proposition players who watch over the games and sort payouts. According to tribal casinos, this directly infringes on their rights, as payouts are now handled by a bank instead of the players providing the prize pools and acting as bankers.

The Amendment of State Bill 549

Introduced in 2023, SB 549 proposes the following amendment:

This bill would 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 a third-party proposition player services provider constitutes a banking card game that violates state law, including tribal gaming rights under the constitutional provisions described above, and to request injunctive relief.

– SB 549

According to this bill, the tribes will be allowed to sue card rooms so the court can decide if their services infringe upon tribal gaming rights. While the tribes can’t get monetary compensation, they can prevent these card rooms from operating their businesses as they have been since 2007. Additionally, tribes must take legal action before April 1st, 2025.

Another important part of the bill is that its provisions are severable. Even if one part is considered illegal or unenforceable, the other provisions can still be applied. Finally, the court cannot issue temporary restriction orders, and the state will not be held liable.

Future of Cardrooms

Many cardrooms are against this bill, stating they would lose significant revenue, believing tribes want to remove competition and monopolize house-banked card games. Additionally, there are concerns this could affect services like fire departments as the government would also lose revenue from licensed operators.

We are not moved by the fact that they’re not going out there to innovate or find ways to make revenue

– Tuari Bigknife, Viejas Band of Kumeyaay Indians attorney-general.

However, the tribes state their goal is to protect their exclusive rights and simply want a chance to settle these issues in court. Tuari Bigknife, attorney-general of the Viejas Band of Kumeyaay Indians, has even stated that cardrooms have been around for a century and can find other ways of making revenue, as they have only been using third-party proposition services since 2007.

Conclusion

While the bill is still pending final approval, it appears Indian tribes might finally get a resolution to this long-standing issue. If they win their court case, it would also significantly impact other gambling establishments and potential legislation. We will keep track of this case and provide updates on future developments.