Two California cities that house cardrooms are now seeking to raise sales taxes after the state changed regulations surrounding its blackjack games.
Bell Gardens, home to the Gardens Casino, and Commerce, home to the Commerce Casino, are placing a 0.25% sales tax hike on the June ballot. The increase is meant to make up for a loss in revenue expected from the state’s proposed rule changes.
Blackjack Changes Impact Cities Across California
In February, the Office of Administrative Law approved changes which will have a major impact on the games played in cardrooms across the state. Some of those include not being able to use the words “blackjack” or “21” in game titles, and not allowing automatic wins if dealt a blackjack (an ace and a 10-value card).
City officials across the state have said the rules could damage their finances and have urged Attorney General Rob Bonta (D) to reverse the decision.
“If we don’t act now, we risk the ability to protect the community,” Bell Gardens City Manager Michael B. O’Kelly said in a news conference last week. “We are acting because we must, not because we want to.”
Commerce officials have estimated that the loss in revenue from the cardroom could be between $8 million and $18 million. The proposed tax increase would only bring in about $4.5 million.
Bell Gardens officials signaled similar losses in the news conference, estimating a 40% drop in general funds. The new rules go into effect Wednesday, and cardrooms have until May 31 to submit a compliance plan.
Lawsuit Filed To Block Changes
Industry stakeholders expect the changes to have a drastic impact on cardrooms and cities where they operate. According to the California Gaming Association, 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.
The CGA said the changes could result in up to 50% of employees losing their jobs, hurting families and cities that rely on tax revenue from the properties. Earlier this month, a group of cardroom owners filed a lawsuit against the state to block the new regulations.
“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.”
