A dispute over the legality of games that most of California’s cardrooms offer, but which most tribes contend breaks the law, is complicating something unrelated to cards: sports betting.
With the U.S. Supreme Court expected to rule on the legality of the existing federal ban on sports betting (outside of Nevada and three other states) the Golden State’s legislature is trying to get ahead of the game by approving legislation, just in case the high court lifts the ban.
Several of the most powerful gaming tribes in the state are threatening to file a lawsuit that accuses card clubs all over the state of operating banked table games in violation of both state law and the constitutional amendment adopted in 1999 that gave gaming tribes a monopoly on Las Vegas style gaming.
If some resolution is not reached, the coalition threatens to stop any other law or ballot measure that would allow the cardrooms to offer sports betting. Tribal representatives meeting with Governor Jerry Brown and Adam Gray, chairman of the Assembly Government Organization Committee made that plain last week.
Gray has introduced a bill that put a referendum on the ballot to legalize sports betting—depending on how the High Court rules.
At that meeting the tribal representatives were urged not to file the lawsuit. The state officials said they should give the legislature a chance to offer a solution.
Steve Stallings, chairman of the California Nations Indian Gaming Association, said the tribes were not inclined to wait very long. He said the issue of expanded gaming under the card clubs and sports betting are linked.
Tribes have in general fought any efforts to allow racetracks or card clubs to expand the types of gaming they offer. Tribes insist the state constitution guarantees them a monopoly on anything besides cards and racing.
Robyn Black, a racing industry lobbyist, while saying racetracks have a good relationship with gaming tribes, added, “We are enthusiastic about sports wagering. We’re very pro-sports wagering. We are very pro-sports betting as long as it’s existing licensees and limited to wagering at brick and mortar facilities.”
Tribes are increasingly impatient with the Gambling Control Commission, under Governor Brown, and the Bureau of Gambling Control, under Attorney General Xavier Becerra, because they haven’t cracked down on card clubs, which are supposed to change dealers with every new game, but which have been able to use third-party-proposition player (TPPP) firms to get around this rule.
They point to a code that forbids the card room from having an interest in funds wagered, in other words, it prevents paid dealers.
According to CGCC Executive Director Stacey Luna Baxter, interviewed by Legal Sports Report, said the commission is working on regulatory changes for the cardrooms. This will be distributed soon, she said.
Cardrooms claim they can’t operate profitably if the deal must rotate with each game.
The catalyst of the current dispute grew from a ruling that issued by former Bureau of Gambling Control Chief Bob Lytle (who is invariably described as “disgraced former chief” because the moment he left his job he got a contracting job with casino operators that he used to regulate, and eventually go in trouble for allegedly crossing ethical lines.) Shortly before he left his job Lytle issued a ruling that stated that the deal did not have to be rotated, but only offered to players. That rule was later rescinded, but so was a follow up rule last year that required the deal to be rotated hourly.
A representative for the card room industry, the California Gaming Association, previously commented, “The tribal community has very strong feelings about the issues. The card rooms feel very strongly about our position. We feel like we operate lawfully. Basically, we think that what has occurred the past 15 years is legal and fine and defensible.”
However, many industry legal experts think the tribes hold the high cards in this dispute. Others claim that state’s cardrooms are the most “inadequately regulated” part of the Golden State’s gaming industry, according to Legal Sports Report.
Some current and former gaming regulators claim they lack the experience and manpower to regulate the industry.
Former BGC agent Dave Vialpando, who used to supervise other agents, told the Report: “If you asked me if the bureau is adequately prepared to regulate the industry, I’d say absolutely not,”
Stallings insists: “We need to meet and confer on the issue and if nothing comes of it the tribes are going to go to court. That’s the message the tribes are delivering to the state.”
