Published in cooperation between Bazoom Group and San Jose Inside
A recent California law allows Native American tribes to sue local cardrooms, potentially threatening their survival and the tax revenue they bring to communities. These cardrooms, like those in San Jose, San Bruno, Emeryville, Commerce and Hawaiian Gardens, provide jobs for the locals and bring in money. However, tribes claim these venues have long taken away business from tribal casinos, which have exclusive rights to certain gambling games under California law.
The Highly Competitive Modern Gaming Arena
As old as the tribal issues with cardrooms have been, as competition intensifies among land-based casinos, other threats have emerged too as more players are turning to online options because of how dynamic and easily accessible they are becoming. A perfect example of this is Telegram casinos. These modern iGaming platforms can be enjoyed directly from the Telegram app. They feature a quick sign-up and plenty of Telegram casino bonus offers.
Some online gambling sites like these even let players use crypto like Bitcoin and Ethereum to bet, offering faster and safer transactions compared to traditional payment methods. With modern gaming options like these changing the casino game drastically, tribal casinos are eager to protect their exclusive rights within the state’s gambling industry. However, while California doesn’t offer a regulated iGaming market, locals can still access a wealth of online casinos that are licensed offshore or in other states.
This adds to the plentitude of gaming options, in addition to the aforementioned cardrooms and tribal casinos. But what’s the catch?
Tribal Nations Access to Justice Act (Senate Bill 549)
Senate Bill 549, also known as the Tribal Nations Access to Justice Act, allows California Indian tribes to sue cardrooms and companies that provide players for these clubs. If tribes believe certain games offered by cardrooms are illegal under state law or infringe on their exclusive gaming rights, they can take legal action to have a court decide on the matter.
The bill tries to settle arguments about whether the games offered by cardrooms are like those found in Las Vegas, which should only be allowed in tribal casinos.
California has more than 60 tribal casinos spread across the state, including some large resort-style ones in the desert just east of Los Angeles. These casinos, though legal since the late 1980s, face a raft of regulations and statutory requirements. Altogether, they contribute nearly $35 billion to California’s economy, based on data from the American Gaming Association.
If a court rules in favor of a tribe, it could force cardrooms to stop offering certain games or to even close down entirely.
Controversy Surrounding Game Categories
At the heart of the issue is whether card rooms are offering games considered "Las Vegas-style," games such Texas Hold’em and Omaha and blackjack and baccarat. The tribes argue it is illegal for cardrooms to offer these games as they are exclusively reserved for the tribes in California. Las Vegas-style card games are known for high bets, skilled dealers, and a fast pace.
Tribes claim that cardrooms have taken millions of dollars that would have otherwise gone to them by offering games reserved for the Indian tribes only. Cardrooms are typically allowed to offer a variety of table games, but they are not permitted to have slot machines or video poker like traditional casinos. They offer games such as poker, including popular variants like Texas Hold’em and Omaha, blackjack, and baccarat.
California's cardrooms trace back to the 1800s. Today, there are about 88 of them, employing about 23,000 people in the state, managed by two state agencies: the Bureau of Gambling Control and the Gambling Control Commission. These agencies handle licensing and approve the games allowed in card rooms.
James Siva, a member of the Morongo Band of Mission Indians and the head of the California Nations Indian Gaming Association, explained that tribes in California have often been blocked from getting legal support to defend what belongs to them. He thinks the new law makes things fair. Siva also mentioned that cardroom operators opposing the bill are a sign they might not be sure their actions are legal.
For instance, Siva’s group believes games such as blackjack, considered "Las Vegas-style," shouldn’t be offered in cardrooms because it goes against the state’s penal code and Constitution. A key point in this debate is whether these cardrooms manage the bank in games, which would follow a Vegas-style setup that is supposed to be limited to tribal casinos.
After a multimillion-dollar lobbying battle, state legislation signed the bill into law. The new law gives tribes a limited window until April 1, 2025, to bring their claims to court.
Opposition from Cardroom Supporters
Cardroom supporters, however, fear job losses and the impact on local budgets, which rely heavily on taxes from these venues. The California Cardroom Alliance warns that this new law could lead to people losing jobs. In a letter sent to lawmakers this summer, Keith Sharp, the group’s president, said the new law could easily lead to card rooms shutting down. He said the state could lose $500 million in taxes used to fund schools, hospitals, and roads. The alliance expects lawsuits will follow.
Under state law, cardrooms aren’t allowed to take bets directly. They often use third-party proposition player services (TPPPS) to offer games that resemble Las Vegas-style games.
The Alliance argues that they can legally offer card games such as pai gow and blackjack because these games have been cleared by the California Department of Justice and supported by court rulings over time.
Sen. Josh Newman, who created the law, says it will help tribes understand what they can and cannot do legally. However, he also recognizes that this could impact communities that rely on these cardrooms and sympathizes with the workers and other people who might be affected if the court sides with the tribes.
The American Federation of State, County, and Municipal Employees protested outside the senator's office and criticized Mr Newman, accusing him of taking sides with the tribes. Mr Newman however believes this is a legal issue, not a matter of personal opinion or choice.
How the New Law Affects Cardrooms
The new law has the potential to affect several cardrooms. In Hawaiian Gardens, the Gardens Casino employs 1,100 workers making it the biggest employer in the city. It contributes about $13 million in taxes every year, which pays for important services like police and community programs.
Victor Farfan, mayor of Hawaiian Gardens worries about the negative effects if the casino closes, highlighting that the casino keeps their city financially stable. He fears a situation like 2020 when cardrooms in Los Angeles County closed for almost a year. This was bad for the casino and the city as they had to lay off city workers and reduce working hours because they couldn't afford to pay people.
Over the past year, the casino invested $9 million in lobbying and other political efforts, including campaigns to oppose the legislation.
Commerce, a city near Hawaiian Gardens, also depends on its card room, the Commerce Casino. This casino provides about 40 percent of the city's budget.
For local people like Gisselle Delgado, a 31-year-old city worker, cardrooms aren’t just gambling spots—they’re vital lifelines. They pay for the city's services and programs. Even though Gisselle doesn't gamble, she knows that her job, and about 40 percent of the city's budget, is paid for by taxes from gambling, which is why the state is often happy to invest in the gambling industry.
Potential Long-Lasting Financial Implications
The tribes gave a lot of money to lawmakers to support the new law. As lawsuits start, local communities might face money problems in the future.
The tension between Native American tribes and cardrooms in California has been ongoing for several decades. This conflict has intensified in recent years as tribes have sought to protect their exclusive gaming rights and card rooms have fought to maintain their operations.
