New rules on banked table games for card rooms released last week by the California Bureau of Gambling Control don’t go far enough in reversing regulations that the tribes say allowed card rooms to flout state law.
The bureau last week released the new rules that reversed older rules that had been released by an outgoing gaming regulator who retired soon after, and immediately became a consultant to card clubs. That retired officer has since come under an ethical cloud and forced to relinquish his gaming license and part ownership in two card clubs.
Rob Lytle, formerly the state’s top gambling enforcement chief, wrote a clarifying letter in 2007 stating that card rooms didn’t need to rotate the deal as long as players were offered the position of dealer. He wrote the letter ten days before retiring. It is estimated that his letter has resulted in millions of dollars of profits for card rooms—money that gaming tribes maintain came from them.
The bureau did not refer to Lytle in issuing the new rules, but said that they were necessary to clarify “murky” interpretations of the law.
Gaming tribes don’t much like the new rules, which interpret Penal Code 330.11, which requires that the dealer-banker position in card room games be “continuously and systematically” rotated among players. State law bans house-banked games outside of tribal casinos, a requirement established when the state’s voters amended the California constitution in 1999.
Tribe have been lodging complaints that card rooms have been, in effect, operating house banked games since 2012, but are just as angry since Wayne Quint, the new head of the bureau issued the new rules on June 30.
Tauri Bigknife, attorney general for the Viejas Band of Kumeyaay Indians declared last week: “We’re very disappointed with the actions taken by the Bureau of Gambling Control.”
She added, “The California penal code and relevant case law clearly establishes that Las Vegas-style banked games are not legal in California card clubs. The notification doesn’t change the state of the law in California at all.”
The Yocha Dehe Wintun Nation added its public disapproval shortly thereafter. “We’re extremely disappointed and a little bewildered by these guidelines,” said Ray Patterson, executive director of the Yocha Dehe Tribal Gaming Agency. “To anybody with any regulatory or operational experience, it makes zero sense what they did.”
California Attorney General, now a leading candidate for U.S. Senator from California, two years ago accused Lytle of a conflict of interest and of sharing information that he obtained illegally from an agent of the bureau with one of his clients.
Lytle gave up his consulting business licenses and is being forced to sell his share of two Sacramento card rooms.
Over the last decade card rooms have evolved from simple operations that offered little more than poker to banked games that include high stakes blackjack, pai gow and other games. It has also become a $1 billion industry employing 23,000 people.
Tribes want to return to the strictest reading of “continuous and systematic” which would require that players take turns being the dealer. Gaming professionals say this could put some card rooms out of business.
Tribal officials are unsympathetic. One official who declined to be named, declared, “Arguably it would hurt but it’s the law.”
Former California Gambling Control Commission member Richard Schuetz agrees, declaring, “Is there anyone on the planet that believes that this solution is what the people who drafted the statutes about banked games intended? Of course not.”
Industry veterans say that the new rules will have a minor effect on card room operations and that they can easily get around them, although enforcing them will require that card room operators clock the games.
The California Gaming Association (CGA), which represents card rooms, say it is concerned about the impact of the new rules, speculating that the clubs “may suffer” from them. The association points to several court rulings that it says upheld the rules that have been in force for a decade.
Tribal attorneys dispute that interpretation and say they don’t see the new rules as a defeat for card rooms at all. They intend to force the issue to “make sure everyone follows the law when it comes to gaming,” as one tribal attorney put it.
“This is a joke. They might have well have done nothing,” said one.
Some tribal leaders want to hold a meeting with Quint or if they don’t get satisfaction with him, with Governor Jerry Brown. Lawsuits are likely.
Although slot machines are the main profit generator for tribal casinos, card games account for as much as 15 percent.
