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California tribal gaming leaders are confident their lawsuit claiming dozens of cardrooms are illegally offering house-banked table games, such as blackjack and baccarat, will be successful in protecting their exclusivity rights to offer casino games in the Golden State.
“We believe that we have a very strong case and are hopeful that the courts will side with California tribes,” James Siva, chairman of the California Nations Indian Gaming Association (CNIGA), said in a statement emailed to Vixio GamblingCompliance.
“However, no matter the outcome, there will finally be a clear interpretation of which games and practices at commercial cardrooms violate California law, and which do not,” Siva said.
Seven tribes brought the lawsuit filed on January 2 in Sacramento Superior Court after Governor Gavin Newsom, a Democrat, signed Senate Bill 549 in September.
The tribes behind the lawsuit are the Agua Caliente Band of Cahuilla Indians, the Barona Band of Mission Indians, the Pechanga Band of Indians, the Sycuan Band of the Kumeyaay Nation, the Viejas Band of Kumeyaay Indians, the Yocha Dehe Wintun Nation, and the Yuhaaviatam of San Manuel Nation.
“We are pleased that the seven tribes, all of whom except one are CNIGA members, are now taking a matter that has festered for more than a decade to state court for clarification that we have long sought,” Siva said.
As approved by lawmakers last year, Senate Bill 549 gave tribes until April 1, 2025 to file their lawsuit.
Because tribes are sovereign governments, they have previously been found to lack legal standing to sue privately-owned cardrooms and third-party providers of proposition player services (TPPPS) until Governor Newsom signed SB549.
Under the bill, tribes are prohibited from receiving any damages or attorney’s fees from the lawsuit. Instead, a judge will merely determine whether cardrooms can continue to offer table games hosted by third-party providers.
Both cardrooms and TPPPS providers are licensed and regulated by the California Gambling Control Commission (CGCC). Currently, there are 72 licensed cardrooms and 23 licensed TPPPS in California, according to the CGCC.
California law prohibits cardrooms from offering “house-banked” table games, where gamblers play against the house typically in the form of a dealer. However, many cardrooms offer blackjack or baccarat games dealt by third-party proposition players.
Tribes have long argued that the use of third-party providers who pay a cardroom a table game fee for offering blackjack, baccarat, or pai gow poker games are, in effect, operating a house-banked game against which players wager.
Traditionally, cardrooms in California have offered poker, in a non-banked round game, where the player-dealer position continuously rotates among the players, with the licensee collecting table fees.
Tribes claims the cardrooms use third-party providers to get around the state’s prohibition on banked games by not banking the table games themselves using the cardroom’s money. Instead, the rules on TPPPS operated games let the player-dealer bank the game with a representative of the licensee dealing cards and collecting fees.
In 2019, the Bureau of Gambling Control (BGC), a division within the state attorney general’s office, proposed that all players at the table should be required to take turns serving as the banker, switching every two rounds.
The BGC also wanted to ban any player, other than the person occupying the player-dealer position, from paying winners or collecting from losers, as well as allowing any person from placing a wager as a supplement to the wager of the person in the player-dealer position.
The proposed regulations were never implemented.
Previously, California tribes have tried and failed to sue cardrooms in state court.
In 2018, the Rincon Band of Luiseno Mission Indians and the Santa Ynez Band of Chimash Mission Indians sued 11 cardrooms alleging that they were offering banked card games in violation of their exclusive rights to offer such table games.
The California Court of Appeal, Fourth Appellate District, in San Diego eventually dismissed the case, ruling that tribes lacked the standing to bring the lawsuit.
In December 2020, the U.S. Court of Appeals for the Ninth Circuit upheld a lower court’s dismissal of a 2019 lawsuit filed by the Yocha Dehe Wintun Nation, the Viejas Band of Kumeyaay Indians and the Sycuan Band of the Kumeyaay Nation against the state of California and Newsom.
The tribes had alleged the state violated their gaming compacts by failing to prevent cardrooms from also conducting banked table games.
Tribes also added a provision to Proposition 26, which would have legalized retail sports betting at tribal casinos, to allow people or entities that believe cardrooms are breaking gaming laws to file a civil lawsuit in state court. That provision went nowhere when voters overwhelmingly defeated Prop 26 in November 2022.
Finally, Attorney General Rob Bonta in 2023 announced a review of games being played at California cardrooms. The final review has not been released by the attorney general’s office.
