California Governor Gavin Newsom last week signed two bills related to gaming. The first was a bill relaxing the requirements of the state’s environmental rules when it comes to projects with the Federated Indians of Graton Rancheria. The second bill reimposes a 25-year-old moratorium on new card clubs in the Golden State.
Assembly Bill 498, which was signed May 22, was primarily intended to allow the Graton tribe to ignore some provisions of the California Environmental Quality Act (CEQA) when it comes to certain projects on the rancheria, according to a report by the California Globe. The tribe operates the largest casino resort in Northern California.
The same day, Newsom also signed AB 341, a bill that was a result of one of the rare instances where tribal gaming and the card club industry in California were on the same page, as reported by CDC Gaming Reports.
The bill, approved by 68-1 in the Assembly and 32-0 in the Senate, reinstated a long-standing moratorium on new card clubs while allowing existing small card clubs to expand their numbers of tables. The bill that originally imposed the moratorium, the Gambling Control Act in 1998, had a sunset on the moratorium at the beginning of 2023. Last year the Assembly couldn’t agree on extending the moratorium, so in January it became legal to apply for a license for a new card room.
AB 341 doesn’t allow a new cardroom for another 20 years.
The bill’s sponsor was Rep. James Ramos, the only Native American to serve in the legislature. After its passage he said: “I am happy to have brought the tribes and cardrooms together in a historic consensus that has resulted in the bipartisan AB 341 becoming law. I deeply appreciate Gov. Newsom’s support for AB 341, which will help ensure the vitality of the gaming industry by allowing for measured cardroom growth without overexpansion over the next 20 years.”
The bill represents a rare cooperative effort between California’s gaming tribes, who maintain that most of what the card clubs do is illegal, and the clubs. They argue, for instance, that blackjack and baccarat violate their monopoly on house-banked games.
However, the smaller cardrooms have been relentlessly lobbying to be allowed to expand their operations. The bill is a compromise of sorts put together by Ramos.
His bill reimposes the moratorium until 2043. It invalidates any applications for a gaming license submitted this year. It allows cardrooms with fewer than 20 tables to slowly add new tables up to a maximum of 10.
Most cardrooms in the state support the moratorium as a way to prevent a saturation of the market.
Kyle Kirkland, president of the California Gaming Association, told PlayUSA: “The California Gaming Association commends the leadership and support of the state legislative leaders and Gov. Newsom in signing into law AB 341 that recognizes California cardrooms are critical to many local economies across the state as it preserves the good-paying jobs cardrooms provide and the tax revenues relied on by many cities.”
California Nations Indian Gaming Association (CNIGA) Chairman James Siva, told PlayUSA: “This was definitely a very unique situation for tribes and cardrooms to agree to come together and work on this. I think for a bill of this magnitude that touches so many different pieces of the gaming industry to go through with that kind of majority shows the work of those groups and that this bill really is a good piece of legislation.”
However, Siva emphasized that tribes still believe the cardrooms are violating the law.
“Tribes continue to believe that these are illegal games being offered in violation of the exclusivity granted to us by California voters,” Siva told PlayUSA. “That issue is not done and we will continue pushing Attorney General [Rob] Bonta to enforce those rules. We’re not asking for something to change. We’re just asking for the letter of the law to be followed.”
CEQA is one of the most often cited laws in California, and tribes generally consider themselves unbound by it since they are under the federal government and not state laws. Tribes say their sovereignty makes them equal to a state government.
AB 498, which was fast-tracked, specifically ratifies the updated tribal state gaming compact that was signed by the tribe and governor in March. The original compact was signed in 2012. The bill says that certain actions related to the compact, such as expanding the numbers of slot machines, are not “projects” under CEQA.
The compact allows the Graton tribe to expand its maximum number of slots from 3,000 to 6,000. It also increases the amount that the tribe pays to the Revenue Sharing Trust Fund above the previous cap of $1.1 million annually. The fund supports non-gaming tribes and tribes that have limited gaming.
Tribal Chairman Greg Sarris commented about the new compact in March: “We are happy to improve our compact with the State of California and continue to provide needed community funds for the City of Rohnert Park, Sonoma County and our state.” He added, “This compact allows the tribe to grow as a self-sustaining sovereign nation and continue to support our mission of social justice and environmental stewardship.”
Charles Platt, a consultant to casinos and gaming companies on state and local matters, told the Globe: “This is one of those bills that pretty much everyone agreed on should move forward since it was all but a formality, but still something they needed to vote on.” He added, “It was a simple ratification in many ways, but it also said that some regulations, due to Tribal laws, wouldn’t be put into place. All this is a big state OK to expanding the casino and allowing them to go over that one cap.”
