First, cardrooms represented by the California Gaming Association filed a lawsuit to overturn new blackjack rules. Now, they are asking for an injunction to halt the state from implementing the rules before litigation is complete.
The CGA claims the changes will have a major adverse impact on the industry. The rules will cost both jobs and tax revenue for cities across the state.
Some of the changes include banning the words “blackjack” or “21” from game titles. Additionally, cardrooms can’t allow automatic wins if a player is dealt a blackjack. Lastly, the rules put major restrictions on third parties from acting as the house.
The CGA argues the new rules contradict previously settled law and jeopardize the entire industry.
“Many of my colleagues in any industry have talked about whether or not they could stay open,” Stones Gambling Hall Vice P and General Counsel Heather Guerena told local media.
Tribal Leaders Cheer New Rules
Along with the changes to blackjack, the rule changes require at least two players to act as third-party players every 40 minutes. Third parties are responsible for paying out winning bets and acting as the house.
In the current landscape, cardrooms farm out third party responsibilities to outside companies. The use of players for that role results in additional risk for players. If no player decides to act as the bank, the new regulations force the game to shutter.
Cardroom owners also say the new rules were put in place without public comment. They contend the rules are meant to placate tribes in the state who want to shut down cardrooms.
Tribal leaders in the state have argued for years that cardrooms infringe on their exclusivity to casino games in the state.
“The cardrooms … felt like they were operating appropriately because no one was enforcing it against them,” said Nick Bryson, attorney for the Shingle Springs Band of Miwok Indians. “I’m pleased the attorney general has made clear his rules, and I hope he’ll enforce them now.”
The Department of Justice has noted that the new rules could cost cardrooms $68 million in revenue … while adding $34 million to tribal casinos in the state. The CGA has estimated the new rules will eliminate 50% cardroom jobs.
As a result of potential losses in revenue, the cities of Bell Gardens and Commerce recently announced potential tax increases to offset expected losses in revenue from cardrooms.
