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Tribal gaming associations in California have spent millions of dollars in recent years trying to force competitors out of business. In 2024, Tirbal gaming interests successfully lobbied the California Legislature and Governor Gavin Newsom to pass a bill, Senate Bill 549, which allows them to sue gambling operations in California. They won the right to sue based on their claim of exclusive rights to operate casinos in California.
In a recent case, a Superior Court Judge shut down tribal gaming’s interest to sue card rooms and gambling operations offering casino-style table games in California. This judgement was made, stating that state statutes do not supersede federal law. This ruling represents a significant legal setback for tribal gaming interests, which continues to apply pressure on the California Legislature to ban Las Vegas-style gambling operations in the Golden State.
The Indian Gaming Regulatory Act of 1988 was enacted to regulate the operation of gaming on Indian Lands. The act also gave tribal governments exclusive rights to operate casino-style gaming in the state. This exclusivity has left a significant gap in the California gaming industry.
Many gaming industries are affected by the exclusivity held by tribal gaming interests. Card rooms and sweepstakes-style games can’t legally operate in the state of California, despite growing popularity among online gamers. The Indian Gaming Regulatory Act forces card rooms and sweepstakes casinos to operate in regulatory gray areas.
Non-tribal gaming might be illegal in California, but that has not stopped online gamers who enjoy online card rooms and sweepstakes from accessing platforms offering their favorite games. Californian gamers can access all digital platforms offering their favorite casino games on their smartphone or laptops. These platforms are regulated outside the United States and offer players the opportunity to play real-money games using digital and physical currency. All it takes is a simple internet search, and you will find a list of casinos to play offshore casino games that are regulated.
Several tribes brought the case to the Sacramento County Superior Court. The tribes sued under the Authority of Senate Bill 549, a bill signed by Senator Gavin Newsom last year. SB 549 granted tribes the authority to sue card rooms and other non-tribal gambling operations offering casino-style table games for violating their exclusive rights within the State.
Superior Court judge Lauri Damrell has blocked their latest attempt to shut down cardrooms in California. Judge Damrell stated in a tentative ruling approved by her that the court recognizes that stakeholders, including the California Legislature, wish to achieve a resolution in this dispute. She went on to state that her ruling was “bound by the limits of federal law”.
California’s card room industry celebrated the ruling. The President of the California Gaming Association stated that the card room will continue to support the growth of local economies by investing in public services and job creation.
Tribal Gaming associations claim that commercial card rooms across California have violated their exclusive rights to regulate casino games in the state. They are alleging that these card rooms are hosting games such as blackjack and pai gow poker, which they claim are casino-style games. They argue that these operations are hurting their revenue.
Provisions made in the Indian Gaming Regulatory Act of 1988 gave tribal groups the exclusivity over gaming regulation to fund previously disenfranchised tribal communities through gaming revenue. They claim that allowing commercial card rooms to operate outside of their regulatory framework hurts their ability to provide crucial financial assistance to tribal communities.
While the case is being fought between tribal gaming interests and commercial card rooms, the implications of the case have far-reaching consequences. Commercial card rooms and casinos are a significant source of tax revenue for communities.
An official from San Jose city cited that $30 million a year is received from card room revenue. This tax revenue is a significant source of funding for local services like policing and the fire department. A win for tribal gaming interests is a major threat to these revenue streams. The tax revenue collected from card rooms is enough to fund roughly 150 police officers or 133 firefighters per year, and losing that revenue could mean the loss of critical services for many communities.
Card rooms are celebrating the decision, as years of countersuing and lobbying have resulted in increasing legal costs. This victory indicates a potential shift in the state’s gaming regulatory landscape.
The Superior Courts’ ruling does not mean the end of the dispute. Tribal gaming interests have expressed their intention to appeal the decision, threatening to take the battle for gaming rights to the federal court.
A federal ruling on the matter could finally force the California Legislature to take a more definitive stance on gaming in the state. Currently, California is far behind other states in regulating card rooms and sweepstakes casinos. States like New Jersey and Pennsylvania have demonstrated how a robust regulatory framework can generate billions of dollars in tax revenue for the state.
From a broader perspective, this case highlights the complexities between tribal sovereignty, state law, federal regulation, and commercial gaming interests. With growing pressure from both tribal gaming associations and commercial card rooms, the regulatory landscape is facing significant transformation.
The Sacramento Superior Court’s ruling marks a win for commercial card rooms and municipalities in the ongoing battle for gaming regulatory power in the Golden State. This setback for tribal gaming has strengthened its resolve to ensure exclusivity in running gaming operations.
Judge Damrell’s comments further highlight the limitations faced by state law when federal law intervenes. As the battle wages on, tribal lobbying persists, and commercial card rooms continue to fight back amidst constant regulatory shifts.
For both camps, the Superior Court’s ruling is both a regulatory milestone and a reminder that the legal stakes in the gambling industry are high. Whichever side wins the battle will control not only the regulatory landscape of gambling in the state but will also decide who benefits from gambling revenue.
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