California’s card rooms are facing the possibility of a return to more stringent regulations, regulations that were loosened in 2007 by a chief of the Bureau of Gambling Control who, after he left the bureau, came under an ethics cloud.
That former gambling enforcement agent Robert Lytle issued the so-called “Lytle Letter,” right before leaving the service to become a consultant to card rooms. Ever since Lytle issued the letter card clubs have been the subject of complaints by tribal casinos that accuse them of cutting into the tribes’ monopoly of Las Vegas style gaming by offering higher stakes and more exciting games than the poker variants that they had offered before 2007.
The Bureau of Gambling Control operates under the Attorney General’s office. Last week the Bureau issued a directive to card rooms advising them that the Lytle letter was a dead letter and that the Attorney General’s office would issue new guidelines on June 30. Lytle faces the loss of his gambling license and his ability to be part owner of several card rooms due to allegations that were filed against him in 2014. Last month he agreed to give up the license and the part ownerships.
The charges allege that after leaving the state’s service that he obtained inside information on an ongoing investigation that concerned one of his clients.
Anthony Roberts, a gaming official of the Yocha Dehe Wintun nation told the San Diego Union Tribune, “We think the state is taking this action because the Lytle letter, which allowed the card rooms to stop the rotation of the deal, just looks bad.”
Lytle’s letter allowed card rooms to offer “banked” card games, where the house acts as the bank. Under state law says that the role of dealer rotates from player to player. Banked card games can only be offered by tribal casinos.
Lytle’s letter changed that by creating the rule that as long as the deal rotation was offered to other players (which they could decline,) that it was legal for a dealer to act as banker.
Tribes began complaining and in 2012 several tribes officially complained to the AG’s office. Nothing resulted for several years although one member of the Gambling Control Commission called card rooms the “worst regulated segment” of the industry.
Some tribes say they are willing to allow a compromise where players will be able to deal two hands before handing over the banker’s role. Card clubs say it is unfair to make them go back to being handicapped by a rule they have lived without for almost ten years.
Roberts dismisses that idea, “Not only do card rooms not have a constitutional right to do what they are doing—as tribes do—the California constitution forbids their play of house banked games. So this should not even be controversial. It is black and white.”
