Cardrooms across California plan to file a lawsuit against the state over new regulations that were pushed for by the Attorney General’s Office.
The California Gaming Association announced on Monday that it intends to pursue legal action to fight against the regulations.
The backstory: Last year, Attorney General Rob Bonta’s office proposed two new regulations for cardrooms that govern the role of player-dealers and blackjack-style games.
- The regulations would require the player-dealer position to only be occupied by a person seated at the table. Players would not be allowed to place a wager directly against a Third-Party Provider of Proposition Player Services (TPPPS) who is not occupying the player-dealer positions. Cardrooms use TPPPS, often called “props,” to act as the house, since state law only allows players to play against other players.
- The regulations would also regulate blackjack-style games only if the rules do not have a “bust feature” and do not have a target point count that is not 21.
The big picture: The Office of Administrative Law approved the two new regulations late last Friday, the Department of Justice announced on Monday.
What we’re watching: The regulations will take effect on April 1. Cardrooms face a May 31 deadline to submit plans for compliance.
Why it matters: State analysis predicts the new regulations will likely reduce the number of cardroom customers and TPPPS employees.
- The analysis found that TPPPS revenues would decline by around 50%, and 25% of cardroom customers would instead become patrons of tribal casinos to avoid the player-dealer rotation requirement.
- Overall, the analysis found that cardrooms would lose $396 million, while tribal casinos would gain $198 million with the new rules.
What they’re saying: Kyle Kirkland, the President of the California Gaming Association and the owner of Fresno’s Club One Casino, condemned the rules.
- “Attorney General Bonta and the Bureau [of Gambling Control] have unilaterally implemented extreme regulatory changes that will harm thousands of working families and the dozens of California communities that depend on cardroom taxes,” Kirkland said in a statement. “By the Bureau’s own simplistic economic assessment, these unnecessary regulations will eliminate over half of all cardroom jobs and force many communities to cut police, fire, parks, senior and food programs when the long-standing tax base disappears.”
- Kirkland said Bonta advanced the regulations without good faith discussion or lawful disclosure.
- “Given the Bureau’s failure to follow the laws they are bound to follow, our industry intends to pursue legal remedies to preserve our lawful, legitimate businesses and defend the livelihood of the working families and the communities who depend on us but have been dismissed as politically irrelevant by Attorney General Bonta,” Kirkland said.
