Following claims by Indian tribes that some card room operators are breaching state laws, gambling regulators in California are set to launch a crackdown on violators.
Tribal casino operators are accusing card room operators of offering banking and percentage table games that are exclusive to the tribes. This clear violation of the tribes’ constitutional rights have angered tribal casinos and have caused tensions within California’s gambling industry.
Game Approvals to be Revoked
In a memo issued in September, Stephanie Shimazu, director of the Bureau of Gambling Control (BGC), said they are planning to repeal approvals for various versions of blackjack currently offered by card rooms. The agency said they are too similar to Class III games exclusive to tribes. Card rooms will be notified in advance and will be given enough time to prepare for the action.
The gambling regulator will also promulgate regulations on player-dealer position which is currently occupied by employees from state-licensed third-party proposition player services or TPPPs. Through TPPPs, card rooms are authorized to fund high-stakes table games.
A dispute over the use of TPPPs as well as game rules has been going on for years between the card room and tribal gambling industries. Tribes currently operate 63 licensed casinos in the state, giving jobs to over 50,000 people. The tribal owned casinos also generate $9 billion in gross revenues annually making them a significant contributor to the state’s funding.
Tribes And Cardrooms Unhappy With Proposed Measures
The tribes are not satisfied with Shimazu’s pledges saying the agency is not doing enough to deal with non-Indian card rooms that are violating the state compact. The tribes have run out of patience and are now threatening legal action against the card rooms and state regulators.
Steve Stallings who is the chairman of the California Nations Indian Gaming Association has described Shimazu’s memo as a delaying tactic and has hence decided to go the legal route. The BGC has found itself in a tight spot as both the tribes and the cardrooms are not happy with its handling of the situation.
Cardrooms in the state are not happy with the BGC memo. Austin Lee who is the executive director of Communities for California Cardrooms says the BGC announcement is unprecedented and would push cardrooms to significantly modify certain processes. Drastic changes planned by the bureau require public and industry input and that hasn’t been followed according to Lee.
Crackdown Could Cripple Industry
The card room industry currently contributes up to $300 million in government taxes, generating 20,000 jobs. About 60 percent of some of municipalities’ taxes also come from card rooms. A crackdown on California casino games would result in a massive cut in city revenues which according to city officials would result in a $16 million shortfall for the city’s budget. The 25 per cent budget cut would have a significant impact on sheriff services, parks and libraries.
Tribes To File Legal Action
According to the National Indian Gaming Commission, California is home to the biggest Indian gaming market in the US. The tribes have been given exclusive rights to operate casino-style gambling, courtesy of a ballot initiative in year 2000. The tribes offer gaming as well as non-gaming activities at their properties to continue to attract more patrons.
The politically powerful tribes are threatening to sue the Gambling Control Commission and the Bureau of Gambling Control for their lack of action. The two regulators are under Gov. Jerry Brown and Attorney General Xavier Becerra respectively.
In addition to that, the tribes are also planning to file separate legal action against the card rooms.
Ballot Initiative to Legalize Sports Betting
As tribes and card rooms fail to find common ground and come to an agreement, a legislative effort to legalize sports betting spearheaded by Assemblyman Adam Gray would likely be temporarily scuttled.
A group from the card room industry, Californians for Sports Betting, is seeking to eliminate the exclusivity on Class III gaming compacts granted to the tribes. The group is pushing a ballot initiative in the 2020 elections. The ballot initiative would allow Nevada-style gaming across nearly 100 locations and card rooms throughout the state.
The proposition for the November 2020 elections would face strong opposition from the tribal community. Having a strong political influence, tribes are standing firm in their position to fight the expansion of gaming in California.
Steve Stallings said the vast majority of the tribes would not allow such ballot initiative to push through without submitting their own counter proposal that would protect the interests of the tribes. Given the tribes’ current position, the future of legalized sports betting remains uncertain in California.

TightPoker Staff

TightPoker Staff

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