Nowhere are tribal casinos more powerful – at least en masse – than in California. And that makes sense, as CA is the birthplace of the tribal casino concept, which spread nationwide after the watershed 1997 California v. Cabazon Band of Mission Indians court ruling.
However, that tribal power is being tested in recent years by the propagation of California’s commercial card rooms, which in the Golden State have seen the nation’s highest rate of adoption.
In most of the US, cardrooms and tribal gambling venues work in a concrete “separate and distinct” manner, with legalization and deployment of the former taking careful stock of the position of the latter.
In California, though, that hasn’t been the case.
Here, the 70+ tribal nations that operate casinos seem constantly at odds about how the state has rolled out legislation in support of its numerous card rooms. Specifically, that legislation has been loose enough that the line between the games allowed at CA Indian casinos and CA card rooms is only becoming more blurred.
The main complaint from the tribal venues is that California card rooms have been allowed to skirt the spirit of the laws in place protecting casinos from competition in the realm of “house-banked” card games.
By California gambling law, only tribal venues can offer “house-banked” card games like blackjack, three-card poker, baccarat, Pai Gow poker, and similar fare. Card rooms, on the other hand, can only offer so-called “player-banked” games.
To be clear, the card room games themselves can be the same as those offered in proper casinos, but their financial mechanisms are fundamentally different.
A house-banked card game, for example, allows the dealer to pay out winning hands from the casino’s chip bank. House-banked games are played individually against the dealer, regardless of how many players are at the table. In other words, there is no “pot” of winnings using monies contributed by players making wagers against one another.
Player-banked games, on the other hand, are banked entirely by player contributions into a common pot, and the house is paid a percentage or fee for its time and/or hosting services.
The issue here becomes one of loopholes.
For card rooms, it is financially more attractive to offer house-banked games – or so-called pseudo-house-banked games – by relegating the erstwhile duties of the house (and financial accessibility of the house) to a third-party player.
These players are not organic players as such – that is, they are not customers of the card room. Instead, they are employed by contractors who function as the house itself, taking whatever action is not taken by the players in order to drive up wagers and keep games going apace.
Again, this violates the spirit of the law but not the letter.
There is, however, precedent for the tribal position in California. In Florida, the state’s gambling compact with the Seminole Tribe was annulled in federal court (2018-20190 because FL cardrooms were employing this same pseudo-house banked workaround.
To be sure, California is acutely aware of the problem and has tried to solve it in the past.
Last November, Proposition 26 was put before voters, but the measure was rejected. Unfortunately, the language in the measure that would have given tribal casinos recourse over the above cardroom practices was included along with massive gambling expansion, namely sports betting and the addition of roulette and craps to the menu of legal CA tribal casino games.
Voters rejected this expansion, but in so doing, they left the door open for the current cardroom dispute to linger unresolved.
This year, CA hopes to achieve a resolution to the tribal complaint through the legislature, sans any gambling expansion. As such, the necessary changes or enforcement enhancements can be made without putting the issue before the voters via referendum.
CA SB-549 states, in part, the following, giving tribes an avenue of legal relief if any casino-operating Indian nation believes that any CA card room is violating the player-banked rules set forth by existing CA law:
“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 and tribal gaming exclusivity under Section 19 of Article IV of the California Constitution and a tribal-state gaming compact or secretarial procedures.”
Given that SB-549 will not have to go to a public vote and given that the scope of its effect is so narrow, it seems likely that the proposed law will pass without much opposition from lawmakers.