The first volley in what will likely be a long and drawn out war between the California Indian tribes and the state cardroom was taken by the cardrooms. A U.S. District Court judge admitted that the tribes have the exclusive constitutional right to offer gaming in the state, but the do not have the right to enforce that exclusivity so he ruled the lawsuit invalid.
The lawsuit was initiated by three tribes—the Yocha Dehe Wintun Nation, the Viejas Band of Kumeyaay Indians and the Sycuan Band of the Kumeyaay Nation—after years of complaints to state gaming regulators went unaddressed.
The issue is the “rotating deal” that is supposed to prevent cardrooms from banking the card games, making the games player-banked and legal under state law. But in practice, the card rooms employ “third-party proposition players (TPP),” usually employed by a private company to serve as the game’s bank. This TPP the deal to each player in turn, who always decline the offer, and the game continues under the TPP bank.
The judge ruled that while the compacts negotiated in 2015 and 2016 continue the exclusivity first negotiated in 1999, but are only guaranteed what is specifically mentioned in the constitution and nothing more. Therefore the state must act to enforce the law because the tribes have no standing.
Kyle Kirkland, leader of the California Gaming Association (CGA), which represents the cardrooms, was happy with the decision.
“We are pleased that the court dismissed this lawsuit by these California tribes against the state of California over alleged violations of their tribal gaming compacts,” he said in a statement. “The federal court ruled that the compacts do not give the tribes exclusivity over gaming in California. This litigation was an attempt to eliminate competition from local cardrooms, threatening thousands of California families and dozens of communities statewide.
“We will continue to oppose specious tribal attacks on our industry, employees and communities. Tens of thousands of Californians count on cardroom living wage jobs to support their families, and dozens of communities rely on the tax revenue we generate to support vital public services. We will not stand by quietly while wealthy tribes try to misuse court resources to hurt our employees, their families and our communities.”
The tribes weren’t so pleased and promised an appeal.
“The California Constitution has long prohibited games such as those played in Nevada and New Jersey casinos,” said a statement released by the three tribes. “In 2000, however, California voters approved Proposition 1A, a constitutional amendment allowing Las Vegas-style gaming, but only for tribes with negotiated compacts with the State. For that reason, and because of express language in the compacts, the tribes believe the court was incorrect in concluding the compacts did not provide a basis to compel the State to enforce the law.
“Notably, the state does not dispute the merits of the case. To the contrary, as detailed in the tribes’ complaint, various high-ranking representatives from the CA Department of Justice, the Bureau of Gambling Control and the Attorney General’s office have acknowledged California cardrooms are playing unlawful house-banked card games, and are also playing blackjack, which is illegal under the Penal Code. But, the state is doing either little or nothing to stop the cardrooms’ unlawful conduct.
“Despite the court’s ruling, the tribes will continue their efforts, through whatever means necessary, to preserve the rights guaranteed to them.”
