Last November, the California Legislature passed SB 549, also known as the Tribal Nations Access to Justice Act. The bill was unusual in that it was crafted as a means for state gaming tribes to sue cardrooms and third-party providers of proposition services, or TPPs. As sovereign nations without legal standing, such action was unavailable to tribes prior to the legislation.
A coalition of tribes subsequently sued a group of over 90 defendants made up of cardrooms and TPP providers in January. The case is being heard by the Sacramento Superior Court under case number 25CV000001, with its next hearing set for August 8.
At issue is the years-long dispute over the legality of games offered by cardrooms and whether they constitute “house-banked” games, in which players wager and play against the house rather than other players. Tribes have had exclusivity over Class III gaming, which is another name for house-banked play, since 2000.
Per state law, cardrooms are permitted to offer certain table games as long as they are played and dealt among players, as in recreational or charitable settings. Over the years, however, cardrooms have enlisted TPPs to help facilitate gameplay, as most recreational players want Class III-style gameplay and don’t wish to serve as the house or dealer. TPPs partner with cardrooms to offer these services and are required to be financially independent from the rooms in which they operate.
Tribes have long contended that this crosses the line into banking games and therefore violates their exclusivity. The SB 549 suit is the culmination of several years of bad blood and its outcome could significantly alter the gambling landscape of America’s most populous state.
The most recent complaint filed by plaintiffs came on April 23 from the Rincon Band of Luiseno Mission Indians. Another was filed on February 18 by the Agua Caliente Band of Cahuilla Indians.
In the Rincon complaint, the tribe asked that the court find the cardrooms and TPP providers to be in violation of both the state constitution and state penal code for offering blackjack, baccarat and pai gow poker-style games in a manner that constitutes house banking.
“The TPP defendants maintain and operate a bank by maintaining and occupying the player dealer position in the blackjack-style games offered by the cardroom defendants,” the complaint reads. “Consistent with the type of banked games offered in Nevada and New Jersey casinos, in defendants’ blackjack-style games, the player or entity banking the game is not limited to winning or losing only a fixed and limited wager during the [play] of the game. Uncertainty over how much the [player] or entity banking the game will win or lose is typical of a banked game.”
The most recent rebuttal on behalf of cardrooms was filed on May 2 by Artichoke Joe’s, a facility in San Bruno.
Its attorneys highlighted the fact that tribes have tried multiple times to bring such a suit, but were unsuccessful before SB 549 was passed. A 2021 lawsuit was tossed due to insufficient standing from tribes and, in 2022, a provision was added to Proposition 26 that would have allowed “any person or entity” (ostensibly tribes or tribal members) to sue any cardroom over any game.
The passage of SB 549 finally created the pathway for tribes to bring the matter before courts. But Artichoke Joe’s pointed to an existing state law from 2004 – Proposition 64 – that conflicts with the cardroom bill. That proposition says that any plaintiff must have individual standing in order to sue, or “an injury in fact in the form of lost money or property as a result of such illegal acts.”
Due to the fact that a group of tribes is suing a group of defendants, each must have standing for the other, the motion alleges. It cited examples of tribes and cardrooms in the suit that are on opposite ends of the state, arguing that the actions of one couldn’t directly harm the other. Further, the motion points to the fact that an initiative like Prop 64 can only be amended or repealed via voter approval.
“Because the purported amendment at issue here was not approved by the electorate, it is not legally enforceable and any action based on the invalid statute must be dismissed,” the motion reads. “Simply put, because SB 549 takes away the restrictions on such relief imposed by Proposition 64, the court must find SB 549 is void ab initio.”
