California’s gaming tribes are moving closer towards taking the Golden State to court to try to enforce what they believe are state laws that are being ignored in the regulation of the state’s 75 card rooms and their billion industry.
Before taking that step, many are demanding that the state limit contractual agreements between the card clubs and firms that bank high stakes version of blackjack and other Las Vegas style table games—something most tribes believe are guaranteed to be tribal monopolies.
They also want to restore the practice of requiring that players pay an ante fee for each hand—something that most card clubs do not collect.
This issue was the main one on the agenda recently at an annual “all tribes” gaming “summit” in Sacramento that was attended by about 100 representatives. Tribes said these concessions are the minimum they are willing to accept or else they may resort to the courts.
But not all agree with even that approach. Some want to jump right into attacking the state’s unusual system of regulating gaming, which gives half of the authority to an agency answerable to Governor Jerry Brown, and half to an agency under Attorney General Xavier Becerra.
Becerra, recently appoint to replace Kamala Harris, who won election in November to the U.S. Senate, attended the “all tribes” meeting and discussed the issue briefly.
One unnamed source commented that the conversation on that issue lasted about two minutes and then went on to other subjects. Becerra assured the tribal representatives that he was aware of the issues between the card clubs and the tribes and said he is investigating them.
Another unnamed source, this one a tribal regulator, said the tribes appear ready to work with Becerra to solve the issue. But he added that the tribes’ patient on this subject isn’t inexhaustible.
Others are blunt that they believe the state and card clubs are violating a number of criminal and professional codes as well as the state constitution, which gives tribes the exclusive right to offer Las Vegas style gaming.
Although gaming tribes are among the most powerful lobbyists in the state as well as generous campaign donors, the card clubs are not without influence, and friends, and they employ around 20,000. They too are willing to make generous donations to political friends.
The clout of card clubs is felt most keenly at the local levels, since many small municipalities rely heavily on card club taxes. According to Communities 4 California Cardrooms, they contribute $120.5 million a year in state and local taxes.
Tribes are especially critical of the lack of enforcement of the law that requires “continuously and systematically” rotating the deal among players at card clubs by the California Bureau of Gambling Control, which works under Becerra’s justice department.
Most card rooms use third-party proposition players (TPPP) to skirt the state law that says, “in no event shall a gambling enterprise or the house have any interest, whether direct or indirect, in funds wagered, lost, or won.”
Another law, also generally skirted, states that the “player-dealer position … must be continuously and systematically rotated” but does not require a player to accept the deal. Card rooms are able to offer high stakes wagers by avoiding the rotation of the player/dealer/banker position. Which, of course, is the reason the Indian casinos want to put a stop to it.
In June Bureau Chief Wayne Quint suspended a rule that required rotating the dealer every hour with two-minute intervals. Becerra has so far declined to comment on this action.
An opinion by former Bureau head Robert Lytle was even more controversial. The opinion, which he released in 2007 shortly before retiring from the bureau to become a gaming consultant and license owner for a short time before being forced out by Kamala Harris for alleged ethics, conflict of interest and confidentiality, violations said that the deal only needed to be offered to various players, who could turn it down, and not necessarily rotated. The tribes hated that rule too.
Recently California Gaming Association President Kyle Kirkland, whose group represents the card club industry, said, “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.”
Steve Stallings, chairman of the California Nations Indian Gaming Association, argues that if card clubs are allowed to get away with what tribes maintain is an expansion of what they are allowed to offer, they will continue to encroach on tribal turf.
He declared recently “If regulators are not willing to deal with these issues, what’s the likelihood … of an expansion of the card room industry to house-banked games?” He added, “This is a slippery-slope kind of thing. If we can’t get a regulatory resolution, a lawsuit is something tribes should consider. We’re not there yet.”
