California’s tribes are pushing for the passage of SB 549 in the state legislature, claiming that it would simply solidify rights that are already legally theirs. However, the state’s cardrooms are vehemently opposing the bill, arguing that its passage would result in mass layoffs and financial instability in certain California cities.
SB 549 would grant California tribes a one-time opportunity to bring a lawsuit against the cardrooms. This bill, supported by tribes in regions with cardroom competition, recently passed a second reading in the state house on August 20. While a previous version cleared the senate in May 2023, it has since been modified, meaning a house-approved version would need to return to the senate for further consideration. With the general assembly scheduled to adjourn on Saturday, time is running out for the bill to make its way through both chambers.
Tuari Bigknife, attorney-general for the Viejas Band of Kumeyaay Indians, expressed that SB 549 aims to enforce rights that tribes have been trying to secure for over a decade through the attorney-general’s office and the California Gambling Control Commission (CGCC). Bigknife highlighted the lack of action despite numerous meetings, recommendations, and hearings on the issue.
“We have been kicked out of court with the crazy idea that tribes have these rights, but do not have the ability to go to court to defend these rights,” stated Bigknife during the “New Normal” webinar.
The debate centers around the operation of player-banked games like blackjack and baccarat in California cardrooms. Tribal casinos in the state are only permitted to offer house-banked card games, while cardrooms must offer player-banked games where the players rotate as the bank. However, cardrooms adopted a new model in 2007 by employing third-party providers (TPP) to act as the bank, a practice that tribes argue violates California law.
The cardrooms contend that abandoning this model could lead to their financial ruin, sparking heated political debates and protests in Sacramento as the bill progresses. Keith Sharp, general counsel for the cardrooms, emphasized the necessity of fighting against the bill for survival, stating, “If you’re going to attack us and try to take away what we’ve had for decades, then we’ve got to fight back.”
In response, Bigknife dismissed the cardrooms’ concerns, claiming that they had only engaged in illegal gaming since 2007 and should revert to their previous model instead of relying on tribes’ resources.
The Covid-19 pandemic presented an opportunity for California tribes as the state-governed cardrooms were forced to shut down for over a year. During this period, tribal casinos operated under restrictions and witnessed a rise in revenue, prompting them to estimate that the current player-banked cardroom games were costing Indian Country at least $100 million annually.
The concept of allowing tribes to bring a lawsuit through legislation is not new and was previously part of Proposition 26, a failed 2022 retail sports betting initiative. The clash between commercial operators and tribes led to the initiative’s demise, with Indian Country likely preferring future gambling initiatives to proceed unencumbered.
As the battle surrounding SB 549 continues in the California legislature, the stakes remain high for both tribes and cardrooms, with the outcome likely to have far-reaching implications for the state’s gambling industry.
