A group of cardroom owners in California filed a lawsuit against the state. They hope to block new regulations that could negatively affect the games they offer.
In February, the Office of Administrative Law approved changes that will implement major changes to the traditional version of blackjack played in nearly 75 cardrooms across the state. The new rules prohibit venues from using the words “blackjack” or “21” in game titles. Additionally, the game can’t award an automatic win if a player is dealt a blackjack.
It also requires players to act as third-party players (TPPs), who are responsible for paying out winning bets. In the current legal landscape, card rooms farm that job to outside companies.
The California Gaming Association (CGA) and several California cardrooms brought a lawsuit against the state in San Francisco Superior Court. A group representing TPPs, who act as the house in blackjack games, also filed suit in the same court.
“Attorney General (Rob) Bonta’s regulations threaten to eliminate more than half of California’s cardroom jobs and wipe out a critical source of revenue for dozens of cities,” CGA President Kyle Kirkland said.
“These games have operated legally for decades under multiple attorneys general, yet one public official is now moving to shut them down without identifying a single public safety concern or addressing the 1,764 public comments about these regulations.”
Cardroom Owners Not Consulted
Under the state’s plans for the industry, the rules become effective on April 1. Cardrooms have until May 31 to submit compliance plans.
The changes come in spite of a 2024 state report said the changes would hurt the properties. According to the report, it could cost the state millions of dollars in tax revenue. Furthermore, it could cost the state thousands of jobs.
According to the CGA, the state’s 72 cardrooms employ more than 23,000 people, generate more than $2 billion in annual economic activity, and contribute over $300 million in federal, state, and local tax revenue every year.
Many cities rely heavily on the tax revenue generated from the properties.
Kirkland said the CGA and cardroom owners weren’t consulted as the rules were being considered.
“Our industry repeatedly raised legal and economic concerns throughout the rulemaking process, but the attorney general refused to engage with the communities and working families who will be harmed,” he said.
“We are asking the court to stop these unlawful regulations before they wipe out thousands of jobs and put many local economies into fiscal distress across California.”
Decline In Card Room Revenue Could Affect California Poker
The new rules come after California’s tribal gaming operators have pushed to abolish cardroom blackjack and other games entirely for years. Under California’s legal landscape, tribes have exclusivity over slot machines and house-backed table games like blackjack.
In September 2024, Gov. Gavin Newsom (D) signed SB 549, allowing tribal operators to sue licensed cardrooms. However, Superior Court Judge Lauri Damrell dismissed a case in October, noting that federal law covers tribal-related gambling.
California’s largest poker rooms are in card rooms. If card room revenue drops from these changes, poker games could get caught in the crossfire. Most of the major cardrooms – such as the Bicycle, Commerce, Bay 101, and Gardens – are also the state’s major poker venues.
