California Tribes Sue State Cardrooms Under Law Enacted A Month Ago

Article by : Erik Gibbs Jan 6, 2025

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A group of tribes in California has taken legal action against dozens of cardrooms in the state. They are accusing them of operating in violation of the California Constitution. 

The lawsuit, filed under the recently enacted Tribal Nations Access to Justice Act, represents a significant move to assert tribal rights over gambling operations. Senate Bill 549, which became law just a day before the lawsuit was filed, allows tribes to pursue legal challenges against cardrooms they believe are operating unlawfully.

The lawsuit was brought by seven tribes, including the Agua Caliente Band of Cahuilla Indians, the Pechanga Band of Indians, and the Yocha Dehe Wintun Nation. Represented by the San Francisco-based law firm Keker, Van Nest & Peters, the tribes allege that the cardrooms have been profiting from illegal gambling practices. 

Specifically, the complaint claims these establishments are offering “banked” games, such as blackjack and baccarat, which tribal compacts explicitly reserve for tribal casinos.

Banked games, where the house or a designated player covers all wagers, are prohibited for non-tribal entities under the California Constitution. While cardrooms have adopted measures to avoid direct violations, such as rotating the banking role among players, the tribes argue that these measures are largely superficial. 

The lawsuit highlights the role of third-party proposition players in these games, alleging that they effectively function as the bank, creating gambling experiences similar to those found in Las Vegas or Atlantic City.

The tribes emphasize that their rights to operate banked games were established through a 2000 amendment to the California Constitution, which exempted tribes from a broader ban on such games. They argue that the cardrooms’ practices undermine these rights and contravene state law. The lawsuit also notes that some cardrooms openly market their offerings as “Vegas-style” games, further blurring the line between legal and illegal operations.

In response, the California Gaming Association, representing the cardrooms, defended its members, stating that their games comply fully with state regulations. The association highlighted cardrooms’ economic benefits, including thousands of jobs and significant tax contributions. It also argued that the games in question have been reviewed and approved by the California Department of Justice, dismissing the tribes’ claims as an attempt to stifle lawful competition.

The lawsuit underscores a long-standing tension between tribal casinos and cardrooms over gambling rights in California. Tribal casinos, which rely heavily on exclusive rights to certain games, see cardrooms’ practices as a direct threat to their operations. Cardrooms, on the other hand, argue that their offerings are legitimate and heavily regulated.

This case could set an important precedent for gambling operations in California, potentially reshaping the dynamics between tribal and non-tribal entities in the state’s gaming industry.