Taking action
California cardrooms have filed two lawsuits to challenge incoming state regulations that will block them from offering blackjack-style games starting April 1. The actual changes are due to begin in June.
Attorney General Rob Bonta announced the new approach last month. He intends to protect tribal exclusivity regarding 21-focused games and to change how third-party proposition players (TPPPs) operate at tables.
TPPPs are licensed businesses that have helped cardrooms offer player-banked games without needing to designate an actual player at the table as the dealer. This was a loophole that cardrooms used to offer blackjack.
have the court block the new regulations from taking effect and to invalidate the rules as unlawful
Both lawsuits were filed in the San Francisco Superior Court, and the plaintiffs include the California Gaming Association (CGA), cardrooms, and TPPPs. The goal of the legal action is to have the court block the new regulations from taking effect and to invalidate the rules as unlawful.
Big knock-on impact
Cardrooms claim they may have to lay off significant numbers of employees. Cities like Bell Gardens, Gardena, and Commerce also warned they could be hit hard, as they rely heavily on cardroom revenue to operate. Some officials even warned they could face bankruptcy due to the incoming changes.
Commerce, for example, estimates it could lose as much as 60% of the income it receives from cardrooms, which currently accounts for more than 40% of the city’s general fund.
Commerce is looking to introduce a $0.0025 sales tax on its June 2026 ballot in an attempt to make up for the significant revenue shortfall. Two other cities are considering similar mitigation measures.
estimates project that cardrooms will lose about $464m in revenue annually
State estimates project that cardrooms will lose about $464m in revenue annually. Meanwhile, tribes could gain roughly $232m, as players may travel out of state or to tribal casinos instead. Around 10,000 jobs could be put at risk by the changes.
Calling out the attorney general
Speaking about the situation while announcing the lawsuits, CGA President Kyle Kirkland said that more than half of cardroom jobs in the state are under threat. He also said the changes could “wipe out a critical source of revenue for dozens of cities.”
Kirkland singled out Attorney General Rob Bonta, saying cardrooms have offered these games for decades under several attorney generals until the current administration changed the system “without identifying a single public safety concern or addressing the 1,764 public comments about these regulations.”
claim that the attorney general did not engage with the communities that would be impacted
He went on to claim that the attorney general did not engage with the communities that would be impacted. In a statement, the CGA described the move as a “power grab” by Bonta.
