California gaming regulators are finally reacting to gaming tribes’ long simmering complaint that the Golden State’s 74 card rooms are being allowed to flaunt the law, but for the tribes it may be too little, too late.
For six years and longer tribes that operate casinos have complained that many card rooms are violating the constitutional amendment that established tribal gaming by offering a form of banked games and percentage table games.
On September 25 Stephanie Shimazu, director of the Bureau of Gambling Control (BGC) sent a memo that promised to “rescind game rules approvals for games too similar to 21/blackjack that are prohibited by state law.” She added, “We will notify cardrooms and defer enforcement for a specified period of time to enable cardrooms to prepare for this action.”
She also plans to create regulations that will bring back the requirement that the player-dealer position in card games be rotated, something card rooms have said will threaten their very existence. Which, of course, is why the gaming tribes want to see it come back.
In most card rooms the player-dealer is usually an employee of a third-party proposition player form, aka TPPP. The card rooms pay these players to act in that capacity to get around the law prohibiting house-banked games.
The tribes have been increasing insistent that they will sue the card rooms and the state regulators that they consider to be their enablers. They would claim the current status quo violates the tribal state gaming compacts and the constitutional amendment passed in 2000 that created the existing Indian gaming industry in the state, which is the largest in the United States.
Steve Stallings, chairman of the California Nations Indian Gaming Association, which most state gaming tribes belong to, has called Shimazu’s memo a “delaying tactic,” and has promised a lawsuit. Not just against the state, but individually against each of the card rooms that they claim are violating state law.
The card rooms don’t like Shimazu’s memo either. Austin Lee, executive director of Communities for California Cardrooms, declared last week, “The Bureau’s announcement to revoke game approvals for various versions of blackjack on a statewide basis is unprecedented. It would require cardrooms to significantly adjust operations.”
Some cities that depend on card clubs, like the City of Commerce, claim they are looking at 25 percent cuts. That city depends on card room taxes for 60 percent of its budget. Statewide the industry employs 20,000 and pays $300 million in taxes at all levels.
The struggle between card rooms, which have a lot of political clout, and gaming tribes, which have even more, has spilled over into other gaming-related issues in California.
It has come close to scuttling Rep. Adam Gray’s efforts to amend the constitution to allow sports betting. The card rooms and tribes can’t agree on the wording. The tribes insist that sports betting is a casino game, which they are guaranteed a monopoly over.
Some of the tribes also plan to defeat a ballot initiative petition being pushed by Californians for Sports Betting that seeks to put a constitutional amendment allowing sports betting on the 2020 ballot. Their problem with the initiative is a section that would allow “Nevada-style card games” in the card rooms, which would then permit the clubs to offer banked games.
This prompted Stallings to say, “I don’t think the vast majority of tribes are going to want to see that ballot initiative proceed on its own without some counter proposal that protects the tribes’ interest. Right now, our position is we do not support expansion of gaming in California. We’ll wait to see how things develop.”
Matt Macarro, chairman of the Pechanga Band of Luiseño Indians, which operates the largest Indian casino on the West Coast, told the Los Angeles Times, “This proposed measure would bring Vegas-style gaming to nearly 100 locations and urban areas throughout California. This is not in keeping with California’s longstanding policy of limited gaming, and we will vigorously oppose this measure.”
