Fresno and Clovis could lose a significant number of jobs and millions of dollars in tax revenue if new regulations on cardrooms are approved.
California Attorney General Rob Bonta has proposed regulations on cardrooms that would eliminate around half of the jobs and tax revenue that cardrooms provide and generate.
Driving the news: Bonta is looking to increase the regulations on two elements of card room operations: the role of player-dealers, and blackjack games at cardrooms.
- Specifically, the regulations would require that the player-dealer position can 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 position. The TPPPS would not be able to settle any wagers at the table when they are not occupying the player-dealer position. The player-dealer position would have to rotate every 40 minutes.
- California law allows cardrooms, as long as players are playing against each other and not the house. Cardrooms use TPPPS, often referred to as “props,” to act as the house, yet the money TPPPS handle is independent of the cardroom.
- Along with the rules on player-dealers and TPPPS, Bonta’s proposed regulations would only allow blackjack if the game rules do not have a “bust” feature and do not have a target point count that is not 21. The state would have to individually approve each blackjack game at every cardroom that previously did not comply with the new rules.
Why it matters: The state said in its own analysis, knows as the Standardized Regulatory Impact Analysis (SRIA), that the proposed regulations would likely reduce the number of cardroom customers and TPPPS employees.
- The state estimates that TPPPS revenues from cardrooms would decline by 50% and that 25% of customers would go to tribal casinos instead to avoid the player-dealer rotation requirement.
- That would result in a $198 million net loss in the state’s gaming sector. Per the SRIA, cardrooms would lose $396 million, while tribal casinos would gain $198 million.
- The SRIA also found that there would be 311 fewer jobs per year from 2026-2035 under the proposed rules.
What we’re watching: The state is holding public hearings regarding the proposed regulations on Wednesday and Thursday.
What they’re saying: California Assemblyman David Tangipa (R-Clovis) objected to the regulations on card rooms rolled out by Bonta.
- “Our cardrooms are a major component of our local economy, offering regulated games that have been legal for decades,” Tangipa said. “500 Club Casino and Club One Casino alone contribute hundreds of jobs to our community and are some of the largest tax generators for the cities of Fresno and Clovis. The Attorney General’s proposed regulations pose a direct threat to these good-paying jobs and would devastate our economy by eliminating critical tax revenue. I strongly urge the Attorney General to withdraw these harmful and unnecessary regulations.”
