A California judge has granted an injunction to California cardrooms, preventing blackjack rule changes from going into effect.
The state’s cardrooms would have lost as much as $68 million in revenue, according to the state’s Department of Justice. The California Gaming Association (CGA), which sued to block the rules taking effect, estimated the new changes would eliminate 50% of cardroom jobs.
Cities across the state have also signaled the changes could lead to significant losses in tax revenue. Some have already responded with tax hikes to make up for the potential losses.
Cardroom revenue and jobs are safe, at least for the time being. San Francisco Superior Court Judge Richard Darwin granted the temporary restraining order on May 21.
Differing Views On Power To Change Game Rules
The order for the changes, mainly to blackjack games, was issued by the Bureau of Gambling Control. It is under the state Justice Department, with the Office of Administrative approving the changes in February. The rules went into effect on April 1 but weren’t expected to be enforced until June 1.
However, CGA attorney Jeremy Kreisberg said powers to set rules and procedures for games was delegated to the California Gambling Control Commission under state law, according to Courthouse News Service. He said only it can approve games.
“But that’s a separate question from who sets the standard for what kinds of games can be played in the state,” he said.
Justice Department attorney Sharon O’Grady told the court the department determines which games can be played in the state. She said focusing on rules was a matter of semantics. The bureau has the power to decide what is a “controlled” game under state law, she said.
“What is a card game goes to the heart of what is legal,” she added.
Judge Crticizes Gambling Control Act
Darwin ultimately found, at least preliminarily, that the Gambling Control Act doesn’t allow the Bureau of Gambling Control to make those kinds of changes. But he added: “The structure of the Gambling Control Act is not a thing of beauty.”
The order lasts for 45 days as two cases related to the rules make their way through the courts. Darwin has asked for additional written testimony; another hearing is set for June 30.
CGA President Kyle Kirkland praised Darwin’s decision.
“Today’s ruling validates what we have said all along: Attorney General Bonta and the Bureau of Gambling Control exceeded their authority by attempting to rewrite California gaming law,” Kirkland said.
“These regulations were driven by pressure from powerful tribal gaming interests that have long sought to eliminate lawful competition from California’s cardrooms.”
A Look At The Proposed Changes
The proposed rule changes would alter the game of blackjack in California significantly in nearly 75 cardrooms across the state. Venues could no longer use the word “blackjack” or “21” game titles. Other changes include:
- No more automatic wins if dealt a blackjack (an ace and a 10-value card).
- No more “busting.” A winner is determined by being the closest to the “target point count” compared to the player-dealer. The player acts as the house in these types of games.
- Backing the game (acting as player-dealer) must be given to at least two other players every 40 minutes or the game ends.
- Third-party providers can’t operate as the bank consecutively. This has traditionally been one of the main methods cardrooms used to operate these games.
The new rules come after California’s tribal gaming operators have pushed to abolish cardroom blackjack and other games entirely, which they view as illegal. 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 to see if they fall within state law. Superior Court Judge Lauri Damrell dismissed a case in October, noting that federal law covers tribal-related gambling.
Tribal leaders have praised the Justice Department’s new rules.
“The cardrooms … felt like they were operating appropriately because no one was enforcing (the law) 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.”
In other California gaming news, the state’s tribal groups believe another sports betting ballot initiative will be put before voters in 2028.
