California Governor Gives Green Light to Temporary Cardroom Suspension as Tribal Groups and Clubs Reach Uncommon Agreement

For years, there has been ongoing conflict between tribal operators and card clubs in California regarding matters such as game exclusivity, online poker, sports betting, and Prop 26. However, this week marked a rare occasion where they managed to find common ground: the unanimous decision to discontinue card clubs.

Governor Gavin Newsom took action on Tuesday by signing AB 341, a new legislation imposing a 20-year prohibition on granting new licenses for cardroom casinos in the state of California. This embargo received support from over 40 tribes and cardrooms, representing a rare moment of agreement between the two competing gaming factions in the state.

The previous moratorium, established under the 1997 Gambling Control Act, had been regularly extended by the legislature for the past 25 years. However, during the last session, lawmakers reached an impasse on extending it for another year.

Susan Jensen, the executive director of the California Nations Indian Gaming Association (CNIGA), expressed concern about the potential consequences of not extending the moratorium, citing the possibility of unregulated expansion of cardroom gaming without proper examination of its impact on local communities.

Advantages for Smaller Cardrooms

The deadlock within the legislature stemmed from the previous moratorium’s restrictions, which not only prohibited new card clubs but also limited the expansion of existing ones. Some lawmakers argued that this restriction deprived surrounding communities of additional tax revenue.

However, with the introduction of AB 341, existing licensed card rooms with fewer than 20 gaming tables will now have the opportunity to add up to 10 new tables over the course of the next two decades. They can initially add up to two tables in the first year, followed by an allowance of two additional tables every four years thereafter.

While tribal operators have staunchly opposed any form of commercial gaming expansion, they concluded that this compromise was preferable to the potential “unlimited card room expansion” predicted by the CNIGA. On the other hand, the card rooms were not particularly enthusiastic about the prospect of boundless competition either.

Assemblymember James Ramos (D-San Bernardino), a Native American who introduced the bill, expressed his satisfaction with bringing tribes and cardrooms together to achieve a historic consensus resulting in the bipartisan passage of AB 341. Ramos stated that the new moratorium would enable controlled growth of cardrooms over the next two decades, ensuring the long-term sustainability of the gaming industry without excessive expansion.

Games Unique to California

For quite some time, tribal operators have expressed grievances regarding the violation of their exclusive rights to house-banked games such as blackjack by card rooms offering what are known as “California games.” These games are adaptations of traditional casino-style games that collect a commission from each hand while enabling players to assume the dealer’s position, similar to a poker game.

The tribes argue that these California games bear too much resemblance to class III casino versions, thus breaching their gaming compacts and the state constitution.

This contentious issue has been a major obstacle in the growth and progress of the gaming industry in California for a considerable period.