California casino-owning Native American tribes are taking cardrooms to court, alleging they’re running illegal games.
On Wednesday, Jan. 1, Senate Bill 549, the Tribal Nations Access to Justice Act, went into effect. The bill allows California’s Native American tribes to take legal action against card clubs and others offering “banked” card games where one party pays out all winnings or collects all of a player’s losses.
The next day, seven tribes, including three in Riverside and San Bernardino counties, sued more than 80 cardrooms across California in Sacramento Superior Court.
“Defendants brazenly profit from illegal gambling,” the Jan. 2 lawsuit reads in part. “California law prohibits cardrooms from offering ‘banked’ casino games — such as blackjack, baccarat, and pai gow — where an entity with an odds-based advantage takes on all comers, pays all winners, and collects from all losers.”
The cardrooms say they’re not doing anything illegal.
“We are confident that California’s cardrooms are operating table games in full compliance with the law, just as they have done for decades,” California Gaming Association President Kyle Kirkland is quoted as saying in a news release issued by the trade group.
“Cardrooms offer tens of thousands of good-paying jobs, pay hundreds of millions in taxes, support local communities, are licensed by the state, subject to extensive regulatory oversight, and offer legal games that have been reviewed and approved by the California Department of Justice,” Kirkland said.
“This attempt by tribal casinos to shut down lawful competition by tax-paying California businesses will fail,” he added.
The cardrooms deny the allegations in the tribes’ lawsuit and “will vigorously defend their lawful operations,” a news release from the California Gaming Association reads in part.
Banked games were illegal in California until 2000, when 64% of voters voted in favor of Proposition 1A, which allowed the governor to negotiate agreements with tribal governments to authorize gambling, including banked card games, on tribal lands.
Historically, cardrooms were poker halls where players competed for a pot of money contributed by players. California law requires the banking position be “continuously and systemically rotated” among players over the course of the game. But according to the tribes, cardrooms now bring in “third-party proposition players” who handle the bank at card games instead of having a dealer do so, as the latter would do at tribal or at Las Vegas casinos.
“But for years, California cardrooms and their partner third-party proposition players have ignored the law and refused to recognize tribes’ exclusive rights,” the tribes’ lawsuit continues. “Instead, they have reaped illegal windfalls by offering banked games that are barred by the California Constitution, California Penal Code, and relevant judicial decisions.”
As a result, cardrooms are illegally offering a casino experience comparable to what tribal casinos are supposed to exclusively offer in California, according to the tribes.
“California’s prohibition on banked games in cardrooms can’t be just another broken promise to California’s Indian tribes,” Adam Lauridsen, an attorney with San Francisco law firm Keker, Van Nest & Peters, which represents the tribes, is quoted as saying in a written statement issued by his firm.
“The California Constitution grants tribes the exclusive right to offer blackjack, baccarat, and other banked games in tribal casinos,” Lauridsen’s statement continues. “Cardrooms have brazenly rejected this voter-approved framework and instead forged ahead with offering illegal Vegas-style games.”
Seven tribes are the plaintiffs in the lawsuit:
Both the tribes and the cardrooms point to how much money they generate for local communities from gambling proceeds.
SB 549 was introduced by former state Sen. Josh Newman, D-Fullerton, and was signed into law on Sept. 28. The state’s cardrooms struck back, spending more than $3 million to oppose legislators who helped get the bill passed, including Newman. He lost his Senate seat in November to Steven Choi, a Republican, the first time since 1980 that a Republican has taken a Democratic Senate seat in California during a presidential election year. Newman is already talking about making another run for office in 2026.
There may be a flurry of lawsuits filed against cardrooms over the next few months. SB 549 requires any legal action related to the statue to be filed in Sacramento Superior Court by April 1.
