This week, California's cardroom casinos achieved a significant legal triumph when a San Francisco court ruled that the Bureau of Gaming Control cannot implement regulations that would have restricted the types of table games available to them.
Despite this victory, the ongoing battle to protect their operations is far from over. The ruling came just weeks after San Francisco Superior Judge Richard Darwin issued a preliminary injunction in favor of the cardrooms. The legal dispute is expected to continue, intensifying the conflict between commercial cardroom operators and tribal gaming nations throughout California.
The lawsuit originated from two regulations introduced by the state nearly five months ago. One of these regulations aimed to ban traditional blackjack in cardrooms, while the other sought to impose restrictions on third-party providers of proposition player services, who act as player-bankers in cardroom games.
In response to these measures, the California Gaming Association, along with affected cardrooms and stakeholders, filed a lawsuit against California Attorney General Rob Bonta and other officials. They argued that the new regulations would result in a 50% reduction in cardroom revenues.
The California Gaming Association (CGA) highlighted that such a decline would not only impact the cardrooms but would also adversely affect the local communities that rely on the tax revenue generated by these businesses to fund essential services.
CGA President Kyle Kirkland emphasized that the case extends beyond mere gaming regulations. He stated, “It is about whether the attorney general and his regulators can bypass the legislature and unilaterally rewrite decades of established law.” He praised the court's decision, asserting that it reaffirmed the limits of regulatory authority.
State officials expressed disappointment over the ruling. A spokesperson for the attorney general's office indicated that they would explore options for appeal. Judge Darwin, who confirmed his ruling earlier this week, also anticipates that the case will be escalated to a higher court, calling it a significant issue.
In addition to the state’s involvement, California’s tribal gaming nations have long sought to end the cardrooms’ table games. Kirkland noted that the tribes have used their political clout to influence the state’s actions against cardrooms, asserting that the regulations were never genuinely about public protection.
In 1998, California voters approved a referendum allowing tribes to operate casinos on their sovereign lands, a decision reaffirmed in 2000 following a Supreme Court ruling. Since then, tribes have aimed to close cardrooms, claiming that voters granted them exclusive rights to table games. Although they attempted to pursue legal action against cardrooms after a 2024 law was passed allowing tribal nations to sue, a judge dismissed the case last October, citing federal law as the overriding authority.
Moreover, the tribes sought to leverage Proposition 26 from 2022, a measure aimed at legalizing retail sports betting, to challenge cardrooms. This proposition included provisions allowing individuals or entities to request the attorney general to take action against suspected illegal gaming operations. If the attorney general declined, those who made the request could proceed with their own legal action.