California gaming and cardrooms associations filed lawsuits in San Francisco this week to challenge the state Department of Justice, Bureau of Gambling Control’s (DOJ) new regulations restricting and altering the games that licensed cardrooms can offer.
The California Gaming Association (CGA), California Cardroom Alliance (CCA) and the Communities for California Cardrooms (CCC) issued a joint press release to confirm they have filed two separate claims in San Francisco Superior Court.
California Attorney General Rob Bonta’s office announced in February that the Office of Administrative Law approved two rule packages in February that are set to take effect on April 1. The regulations ban 21-point blackjack-style games in cardrooms and change how third-party proposition player services (TPPPS) can be utilized for other table games, mostly focused on rotation requirements for player-dealer positions.
The changes faced political, municipal, business and labor union opposition but were heralded as a win for tribal groups such as the California Nations Indian Gaming Association, who said the alteration reinforces their right to exclusivity.
Cardrooms slam ‘unprecedented power grab’
In their statement, the CGA, CCA and CCC called the regulations “an unprecedented power grab by the Attorney General that contradict state law in multiple ways.”
“The rules reverse decades of settled law and practice under which these games were approved as lawful by multiple Attorneys General, including former Governor Jerry Brown and former Vice President Kamala Harris,” add the gaming entities. “The cardroom industry contends the regulations lack any legal or factual basis and were adopted despite overwhelming opposition from cities, workers, and community leaders.”
They noted that the state’s own Standardized Regulatory Impact Assessment (SRIA) projected that the new rules could cause cardrooms across the state to lose at least 50% of their business, triggering mass layoffs and forcing some cardrooms to shut down entirely. Regulators estimated before the approval that cardrooms stood to lose hundreds of millions of dollars in annual revenue as well as hundreds of jobs, while tribal casinos would gain more than $200m.
The gaming groups added that cities including San Jose have formally opposed the regulations. The San Jose city government sent a letter to Bonta and the Bureau last week to warn him that $32m in City funds are at risk.
AG Bonta ‘refused to engage’ with cardrooms’ concerns
While Bonta’s office said last month that the DOJ held numerous meetings with stakeholders to discuss the ideas and took more than 1,700 public comments, the cardroom associations contended that their voices were ignored.
“Attorney General 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,” said CGA President Kyle Kirkland. “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.
“Our industry repeatedly raised legal and economic concerns throughout the rulemaking process, but the Attorney General refused to engage with the communities and working families who will be harmed. We are asking the court to stop these unlawful regulations before they wipe out thousands of jobs and put many local economies into fiscal distress across California.”
SBC Americas reached out to Bonta’s office for comment but received no response. A spokesperson for the attorney general’s office told FOX40 the department is “prepared to review the lawsuit once it is received and respond as appropriate in court.”
