Three California tribes have taken the Golden State to federal court, claiming the state has violated the tribal state gaming compacts and the state constitution that, they claim, guarantees them exclusive rights to offer house-banked card games. They assert that card clubs in the state get around this provision—while the state looks the other way. The lawsuit uses the terms “complicit” “and “even encouraging.”
The Yocha Dehe Wintun Nation and the Viejas and Sycuan Bands of Kumeyaay Indians filed the suit in the Ninth Circuit U.S. District Court, alleging that Governor Jerry Brown (who retired last week) and gaming regulators had done nothing to stop cardrooms from offering banked games, such as blackjack and poker.
The Golden State has 63 gaming tribes, all with tribal state gaming compacts that were authorized after the voters in 2000 approved Proposition 1A that amended the state constitution giving tribe a monopoly on Las Vegas style gaming, including banked and percentage games.
The complaint asks for an injunction “directing the state to enforce its laws prohibiting the play in cardrooms of banking card games and twenty-one.”
For several years tribes have been increasingly insistent that cardrooms that use banked third-party proposition players (TPPPs) are violating state law.
The lawsuit appears to be a companion action to a November action brought by the Rincon Band of Luiseño Indians and Santa Ynez Band of Chumash Indians in November in Superior Court that alleged that the card clubs and the TPPP firms they employ are violating state law.
So, it’s a double whammy: one suit against the state, the other against the card clubs and their contractors.
Yocha Dehe Chairman Anthony Roberts declared “We did not want to file this suit, but cardrooms continue to play and brazenly advertise these games, even though it’s patently illegal for them to do so.” He added, “We are asking the state to simply do its job and enforce the gaming laws and rules California’s voters and state Legislature have put in place.”
The card clubs argue that they are following regulations given them by the Bureau of Gambling Control, which is under the control of Attorney General Xavier Becerra. It serves as the enforcement arm of the Gambling Control Commission, forming the only “bifurcated” gaming regulation system in the country. This unique arrangement is frequently blamed for providing an environment where card clubs can operate in defiance of state law.
The bureau’s director Stephanie Shimazu September 25 circulated a memo to card clubs, announcing “plans to rescind game rules approvals for games too similar to 21/blackjack that are prohibited by state law.” She promised to issue regulations to address “rotation of the player- dealer” and examine cardroom contracts with TPPP firms hired to bank the games.”
This was apparently too little, too late to satisfy the tribes that filed lawsuits. Although they have held meetings with both the bureau and commission to try to move them toward their way of thinking.
Viejas Chairman John Christman commented, “Going to court is regrettably our last recourse, only because of the state’s continued inaction against such blatant illegal activity. If California enforced its current laws, we would not have filed this lawsuit.”
The card rooms warn that the industry could be permanently crippled by the rules Shimazu has threatened to impose, an industry that employs more than 20,000 workers and contributes $300 million in taxes. However, that industry is dwarfed by the behemoth that is California Indian Gaming, which is a nearly $9 billion industry.
The 2016 California Tribal Government Gaming Impact Study that the California Nations Indian Gaming Association (CNIGA) published noted that tribal gaming added $5 billion to the state economy and employs 63,000, most of them not tribal members. It also pays more than $400 million in state and local taxes.
The lawsuits were not unexpected. Tribes have warned for years that they would go to court if state officials didn’t address their concerns.
Although tribes are guaranteed exclusivity, most card clubs do have an advantage: they operate in urban areas that tribes cannot breach because they are largely limited to reservations, which are almost always in remote areas.
The tribes that filed the lawsuits made that point last week in a statement: “Californians have long opposed the spread of gaming in urban areas, and it was no mistake that the grant of gaming exclusivity to Indian tribes rested on the promise that Las Vegas-style gaming would be restricted to their remote Indian lands.”
