A bill that is advancing in the California Assembly would give gaming tribes the ability to sue cardrooms to defend their exclusive gaming rights, Play USA reported on July 7.
Currently, gaming tribes in the Golden State must let the state’s law enforcement agencies prosecute cardrooms for violating rules that supposedly prevent them from operating banked games.
But the California Justice Department doesn’t do that to the tribes’ satisfaction. SB 549, which unanimously passed from the Judiciary Committee, now heads to the Governmental Organization Committee. If the Assembly approves it, the Senate will get one more pass on it to resolve any discrepancies between the two versions.
Cardrooms continue to offer traditionally house-banked games such as blackjack and baccarat, which the tribes feel belong exclusively to them.
Lawmakers see the bill as a way to punt the whole issue out of the legislature, which must deal with new proposals designed to rein in cardrooms almost every session.
Rep. Brian Maienschein, chairman of the Judiciary Committee commented, “For me, what pulled me over to being in favor of this bill are the issues in front of this committee, and will this perhaps help the process that may put an end to this issue? … Maybe this does end it. Speaking for myself and maybe others, that would sort of be the hope.”
The conflict between the tribes and the card clubs was created in 2000 when California’s voters gave the rights to operate casino gambling to the tribes. The card clubs had operated since the 1800s, but the tribes felt that they were violating their newfound exclusivity by continuing to offer banked card games such as poker.
They did this by creating a system using third-party proposition players TPPP as the bank. That way, the card clubs don’t actually serve as bankers.
Tribes have tried to discourage this practice through lawsuits, but sovereign tribes normally can’t sue or be sued in state courts.
Senator Josh Newman’s bill will give tribes an exception if they sue to determine whether the games in question violate the state constitution.
It would create a three-month window allowing for one lawsuit against card clubs and TPPPs. Senator Newman explained, “To be clear, SB 549 does not take a side in this dispute.”
He added, “Its passage would neither vindicate nor amplify the arguments of the tribes. And its passage will not declare or imply the cardrooms are in violation of the law. Moreover, if and when the matter comes before a court, there is no guarantee as to how a court may rule.”
California Nations Indian Gaming Association (CNIGA), which represents most of the gaming tribes in the Golden State and the Viejas Band of Kumeyaay Indians, leading a coalition of 21 tribes, endorse the bill.
Viejas Chairman John Christman told Play USA: “We believe that California card clubs have been violating tribal exclusive gaming rights for more than a decade by illegally operating banked games, which continues today. Economic studies and data revealed during the COVID pandemic outbreak that these illegal banked card games are taking away from gaming tribes over $100 million each year that could have been used for essential services.”
During legislative hearings on the bill, Viejas Attorney General Tuari Bigknife explained why the tribes want to have their day in court on this issue: “So ultimately what we have is procedural hurdles that have prevented tribes from being able to have this issue heard in courts” He added, “And, really, if the cardrooms are so confident in their position, they should be eager to go to court and prove it.”
Ed Manning, representing the cardrooms, countered that it is unfair to let tribes sue them when they can’t sue the tribes due to sovereign immunity. They point out that the Bureau of Gambling Control approved of the games as they are using them.
Manning declared, “Every game that they’re saying is illegal, every single one of them has been explicitly approved individually in every cardroom in the state of California” Manning added, “… We’re driving within the speed limit but they want to sue us despite that. They’re not saying we’re not complying with the attorney general’s decision. They are saying we are complying with the attorney general’s decision and they don’t like it. And they want to sue us and not give us the ability to sue them.”
Manning is unhappy that the bill wouldn’t allow review of the Bureau’s decision-making in allowing TPPP games. “I don’t know of another example where a regulatory agency makes a regulatory determination on the legality of what the third party banker’s role is, what we play and how we do it, and have that record not be in front of the court,” he told lawmakers. “I haven’t heard a single example of the regulatory history of 25 years not given deference before the court.”
