Despite the best efforts of the California legislature, California tribes will not get their day in court to challenge the use of player-banked games by state cardrooms, at least for now.
Sacramento Superior Court Judge Lauri Damrell dismissed the case with no leave to amend, leaving the tribes with the option to appeal her ruling.
A group of tribes filed the lawsuit after the state legislature passed SB 549 last year and Gov. Gavin Newsom signed it into law. The measure allowed cardrooms to retain tribal sovereignty while pursuing a legal answer to whether or not cardrooms can offer player-banked peer-to-peer card games like Blackjack.
The tribes have long argued that these games, which often utilize third parties to volunteer to be banker, are a workaround to offer the types of games tribal casinos can exclusively offer under compacts with the state.
However, Damrell did not rule on that matter and instead tossed the lawsuit, writing that she can’t even consider the matter because SB 549 is preempted by the Indian Gaming Regulatory Act (IGRA).
“Notwithstanding the Legislature’s attempt to resolve this issue, this Court is bound by federal preemption and lacks jurisdiction to resolve this dispute. Moreover, having considered the Parties’ supplemental briefing, the Court is persuaded that severance cannot resolve IGRA preemption or be harmonized with the Legislature’s intent,” Damrell wrote in her ruling.
Essentially, Damrell concluded that the compacts tribes are allowed to enter into with the state regarding gaming preempts the state law trying to create an avenue to challenge these games in court.
The long list of tribal casinos argued that they are not afforded an opportunity to challenge these games without a lawsuit, but Damrell pointed out that tribes have tried and failed to address this challenge through revised compacts, but the state rejected the language, such as during a 2016 compact negotiation between the state and a handful of tribes.
Since these compacts can include language regarding enforcement and scope of gaming in the state, Damrell concluded there was no way for SB 549 to be enforceable and that the suit could not move forward.
“No one here is arguing that SB 549 interferes with gaming on tribal lands or tribal governance over that activity; however, it does interfere with the compacting process set forth by Congress,” she added.
Based on a statement California Nations Indian Gaming Association Chair James Siva gave to local outlet Cal Matters, the tribes i not going to stop pushing the issue.
“This outcome is especially troubling given that it was a state law enacted just last year that explicitly gave tribes standing in state court. It’s difficult to reconcile this ruling with the clear intent of the Legislature, and once again, a court has sidestepped the actual merits of the case — effectively denying tribes a fair opportunity to seek justice.”
Siva also told the publication tribes intended to appeal, which, at time of writing, they have yet to do.
While this is a setback for the tribes when it comes to cardrooms, the group has proven to be more succesful combating other groups they argue are infringing on their tribal sovereignty.
Thanks largely to a tribal push, Newsom recently signed AB 831 into law, officially banning online sweepstakes gaming in the state and criminalizing those that supply to those sites. The bill is set to take effect on Jan. 1, 2026.
Tribes also celebrated a ruling this summer from California Attorney General Rob Bonta’s office declaring just about every form of fantasy sports to be illegal sports betting in the eyes of the office.
