California Cardrooms Win Latest Legal Round, But The Battle Over Table Games to Continue
Appeal likely over ruling to block new regulations banning blackjack and restricting third-party bankers
California’s cardroom casinos scored a big victory earlier this week when a San Francisco court ruled the state’s Bureau of Gaming Control cannot enact regulations that would have limited the types of table games they can offer.
However, the fight to preserve a major part of their operations may still be far from over even after Tuesday’s ruling, which came less than six weeks after San Francisco Superior Judge Richard Darwin granted a preliminary injunction to the cardrooms. The legal case will still likely proceed, as will the heated battle between the commercial cardroom operators and tribal gaming nations across the state.
The lawsuit stems from two rules the state adopted nearly five months ago. One prohibited the cardrooms from offering traditional blackjack, and the other placed limits on third-party providers of proposition player services, licensed operators that serve as player-bankers in cardroom table games.
In response, the California Gaming Association, joined by cardrooms and others that would be affected by the new rules, filed suit against California Attorney General Rob Bonta and other state officials. They claimed the new regulations would have slashed cardroom revenues by 50%.
Not only would that hurt the cardrooms, but the CGA said it would have also harmed cities across the state where the cardrooms are located. Those communities rely on the businesses, whose taxes cover essential services.
CGA President Kyle Kirkland said in a statement after the ruling that the case represented “far more” than just gaming laws.
“It is about whether the attorney general and his regulators can bypass the legislature and unilaterally rewrite decades of established law,” Kirkland said. “Today, the court delivered a clear answer: they cannot.”
State ‘Disappointed’ with Ruling
In a statement to Gambling Insider, a spokesperson for the attorney general’s office said the ruling “disappointed” state officials, who would review options on moving forward.
Even Darwin, who upheld his ruling in court earlier this week, expects a higher court to weigh in.
“We all expect this to go up,” Darwin said, according to Courthouse News Service. “It’s an important issue.”
According to the state’s rules of court, most appeals must be filed within 60 days after the losing side receives the notice of the entry of judgment.
Tribes Seek to Bust Cardrooms
While the lawsuit pits the cardrooms against the state, there’s also another party that’s long had an interest in shutting down the cardrooms’ table games: California’s tribal gaming nations.
Kirkland, in his statement, noted that the tribes used their political influence to push the state’s efforts against the cardrooms.
“These regulations were never about protecting the public,” he said.
California voters initially approved a referendum to allow the state’s tribes to run casinos on their sovereign lands in 1998. They did so again two years later after the state’s Supreme Court ruled the first proposal violated the state constitution.
In the years since, California tribes have sought to shut down the cardrooms, arguing that voters gave the tribal nations exclusivity to operate table games. The tribes tried taking the cardrooms to court themselves after the state passed a 2024 law granting tribal nations the right to sue. However, a Sacramento judge tossed the case last October, indicating that federal law preempted the state law.
The tribes also tried to use 2022’s Proposition 26 – better known as a measure to legalize retail sports betting in the state – to go after cardrooms. That proposal included a section that allowed any individual or entity to request the state’s attorney general to take action against anyone suspected of operating an illegal gaming operation. If the attorney general’s office declined to proceed, then those who sought the request could proceed with a court case.
Prop 26 ended up failing at the ballot box, in large part because the tribes spent millions of dollars to oppose Proposition 27, which would have introduced commercially operated online sports betting in the state.
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