Proposed regulations threaten California cardrooms’ future
California is facing a legal and regulatory dispute between cardrooms and tribal casinos over blackjack-style games. Although cardrooms recently won a court case, their operations remain uncertain as gaming tribes plan to appeal and state regulators consider new rules that could restrict cardroom activities. Many cities depend on cardrooms for employment and revenue, creating a conflict between local economic interests and tribal gaming rights.
Recent victory for cardrooms
On 10 October, a Sacramento Superior Court judge dismissed a lawsuit filed by several California gaming tribes against cardrooms. The lawsuit was allowed under SB 549, a temporary law that gave tribes the right to challenge certain cardroom games they believe infringe on tribal gaming rights. While the ruling favours cardrooms for now, the tribes have announced plans to appeal, leaving the issue unresolved.
Tribal lawsuits and their legal grounds
Cardrooms are allegedly using third-party proposition players (TPPPs) to provide unapproved banked games, according to gaming tribes. Cardrooms contend that because they employ a “player-dealer” structure in which players alternate as the dealer, their games are permitted by state law. Tribes contest this, claiming it breaches their exclusivity and is a workaround. If the tribes succeed in their appeal, cardrooms may have to remove or significantly alter games like blackjack and baccarat. Even if the appeal fails, cardrooms could still face restrictions due to upcoming regulatory changes.
Pending regulations
While legal proceedings continue, the California Bureau of Gambling Control is reviewing proposed regulations that could directly affect cardroom operations. These rules would prohibit the use of terms like “21” or “blackjack” and remove the concept of busting from cardroom games. If implemented, the changes would alter how these games are played and may make them unrecognisable compared to traditional blackjack.
On 20 October, about 150 individuals, including workers, business owners, and union representatives, gathered outside Attorney General Rob Bonta’s Los Angeles office to oppose the proposed rules. Their message was simple: “Protect our jobs. Protect our communities.” They expressed concern that the changes could lead to job losses and reduced city revenue. The regulations may significantly limit or eliminate the use of third-party proposition players (TPPPs), which are central to how cardrooms currently operate these games.
Economic dependence of cities on cardrooms
Commerce, Bell Gardens, Compton, Gardena, and Hawaiian Gardens are just a few of the California cities that rely on cardrooms to finance vital services like law enforcement, fire departments, and community initiatives. Restricting cardroom games might result in income losses, widespread job losses, and an estimated yearly economic impact of about $5.6 billion, according to a state economic report. Local officials caution that without these games, some cities may face serious financial strain.
Legal counterarguments
In joint letters dated 29 May, the California Gaming Association and California Cardroom Alliance opposed the proposed regulations, arguing that the Bureau of Gambling Control has long approved player-dealer games and that they are legally valid. They claim that reversing this position would conflict with established state precedent and risk significant job losses.
In contrast, tribal leaders, including CNIGA President James Siva, argue that the proposed rules are insufficient. In a letter dated 27 May, Siva called for stricter oversight of third-party proposition player (TPPP) finances and a broader revision of blackjack regulations, stating that such games undermine tribal gaming rights.
Judge Damrell’s ruling
In October 2025, Judge Lauri Damrell dismissed the tribes’ lawsuit, citing federal pre-emption under the Indian Gaming Regulatory Act (IGRA). However, she acknowledged the complexity of the case and noted that her decision “may be wrong.” On 14 November, there will be a case management conference that may result in additional legal actions.
Since Proposition 1A, which gave tribes exclusive rights to Class III gaming, was passed in 2000, the dispute between California cardrooms and tribal casinos has persisted. When state regulator Bob Lytle reinterpreted gambling regulations in 2007, allowing cardrooms to offer modified versions of baccarat and blackjack, tensions increased. Later, Lytle entered the cardroom business, which heightened tribe worries about the equity of regulations.
High-stakes consequences
The outcome of the appeal and the implementation of proposed state regulations both carry significant consequences. If the tribes succeed, cardrooms may lose access to their most profitable games. Even without a legal defeat, new rules could severely limit cardroom operations. In either scenario, thousands of jobs and billions in local revenue are at risk, and both sides appear prepared for a prolonged legal battle.
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