CA cardrooms facing new rule changes while tribal lawsuit ongoing

The ongoing confrontation between California’s tribes and cardrooms has reached a pivotal moment, especially with new regulations proposed that could reshape the gambling landscape.

In 2023, California Attorney General Rob Bonta, alongside the state’s Bureau of Gambling Control (BGC), initiated significant regulatory changes affecting the state’s cardrooms. These changes focus on altering blackjack rules and the operational framework for player-dealer games.

In early February, proposals were published for public discourse but were then withdrawn to encourage further input. A revised set of proposals was made public on April 11, and the commentary period concluded on Thursday at 5 PM.

Two public hearings were conducted by the BGC this week, with the majority of feedback originating from cardroom supporters opposing the proposed modifications. Should these new rules be enacted, they would fundamentally alter blackjack as it is currently known, alongside imposing substantial new conditions on player-dealers.

The implications of these changes are profound. According to an assessment from the state’s own impact report issued last August, a potential loss in revenue could reach into the hundreds of millions, severely affecting employment with countless jobs at stake. Numerous small California towns depend heavily on the tax revenue generated by cardrooms to fund essential services such as firefighting and policing.

Hundreds of residents, employees, and city officials have united to protest AG Bonta’s regulations, which are projected to slash jobs and revenues by up to 50%. pic.twitter.com/vJOkvoSN5Z

— CA Gaming Association (@CACardRooms) May 28, 2025

Ongoing Legal Challenges

As the state forges ahead with its regulatory adjustments, cardrooms find themselves embroiled in a considerable lawsuit initiated by state gaming tribes. Although tribes, as sovereign nations, typically have limited legal recourse, the passage of SB 549 in November created a unique opportunity for litigation.

A coalition of tribes filed the lawsuit in January against all state cardrooms, which is currently being heard in Sacramento County Superior Court. The next hearing is scheduled for August 8.

The litigation directly addresses the proposed rule changes by the BGC, although the relationship between the two remains complex. Given the multitude of plaintiffs and defendants involved, legal experts predict that this case could prolong for years.

It is essential to note that the regulatory proceedings commenced well before the lawsuit and are independent of it.

The Path Leading to Regulatory Changes

In California, tribes maintain exclusive rights to Class III casino gaming, which precludes the establishment of commercial casinos that offer house-banked games. The state is recognized as a gambling hub, with the National Indian Gaming Association reporting that California tribal gaming generated $12 billion in gross gaming revenue in FY23, the highest in the nation.

While there are no commercial casinos, multiple legal cardrooms facilitate player-to-player gameplay, adhering to state regulations. However, in recent years, there has been a rise in the use of third-party propositional player services (TPPPS) to enhance the gaming experience.

TPPPS are independent contractors licensed by the state providing player-dealer services, allowing recreational players to engage without assuming dealer responsibilities. As a result, TPPPS often act as the dealer throughout the gameplay.

Tribes argue that this setup constitutes a circumvention of state laws and violates their exclusivity. Although the TPPPS are required to operate independently, the lines between cardrooms and TPPPS have become increasingly blurred over the years. The January lawsuit reflects nearly two decades of contention between these factions.

Conflicting Perspectives

The tribes’ lawsuit argues that “cardrooms and their partner TPPPS have disregarded legal statutes and failed to acknowledge tribes’ exclusive rights,” leading to substantial illegal profits from these gaming arrangements.

In defense, cardrooms assert that TPPPS operate legally under state oversight. Kyle Kirkland, president of the California Gaming Association, stated, “Cardrooms have legally operated these highly regulated games for decades, each sanctioned by the California Department of Justice.”

Kirkland maintains that cardrooms are vital to thousands of Californian families, emphasizing the economic significance of local cardrooms as a source of essential tax revenue for community services.

Transformative Changes to Blackjack

The proposed alterations to blackjack would substantially redefine the game. If implemented, existing blackjack formats would be prohibited, requiring cardrooms to apply for reapproval of modified games within a tight 60-day window. Key changes include:

• The elimination of the “bust” feature, where exceeding 21 results in automatic loss. Wins and losses would now be determined by proximity to a newly defined target point count.
• The target point cannot be 21.
• The absence of a natural 21 would mean players or dealers no longer automatically secure a win.
• A tie, traditionally a non-action, would favor the player instead.
• Games could no longer use the nomenclature “21” or “blackjack.”

Player-Dealer Role Modifications

Extensive changes are also proposed for player-dealer roles, echoing significant concerns raised by tribes. The new requirements dictate that:

• The player-dealer must remain seated and must be offered the role to all players before each hand, with offers visible to surveillance cameras.
• Tables must prominently display a notice stating: “Any player can assume the player-dealer position when offered. The player-dealer cannot win or lose more than their wager.”
• The player-dealer role must rotate among at least two non-TPPPS players every 40 minutes or risk ending the game.
• The TPPPS can only accept and settle wagers while serving as player-dealer.
• A maximum of one TPPPS is allowed per table.

Just as with the blackjack rules, cardrooms would have a similar 60-day timeframe to file for modifications.

A Struggle for Recognition and Respect

The gambling landscape in California is at a critical juncture. The tribes have recently achieved considerable victories, including the successful passage of SB 549 and the defeat of a substantial movement to legalize commercial sports betting during the 2022 election. Large commercial sportsbooks, still recovering from the loss, are actively seeking to rebuild relationships.

Meanwhile, cardrooms appear to be at a disadvantage. Local officials are expressing growing concerns over the industry’s future, particularly regarding its crucial role in tax revenue. The Gardens Casino, California’s second-largest cardroom, based in Hawaiian Gardens, symbolizes this struggle. Mayor Dandy de Paula recently highlighted the casino’s importance to the community, noting that over 60% of the city’s general fund relies on revenue generated by the cardroom.

“Our city’s sustainability depends on our cardroom for both jobs and tax income,” de Paula urged, calling on the attorney general to reconsider the proposed regulations.

Despite these challenges, cardrooms maintain a significant presence in the state. Following the passage of SB 549, cardrooms invested $3 million in lobbying efforts against lawmakers who supported the bill, which ultimately led to electoral losses for three of the four legislators.

“We want to avoid being perceived as the Rodney Dangerfield of the industry; we seek acknowledgment and respect,” asserted Keith Sharp, a legal representative for Hawaiian Gardens.