California’s cardroom industry is facing an existential threat due to the new regulations that came into effect on April 1. The new rules, which the industry is seeking to overturn, effectively ban cardrooms from offering blackjack-type games, which are the lifeblood of such venues and their surrounding economies.
Earlier this year, California Attorney General Rob Bonta and the Bureau of Gambling Control approved sweeping regulatory changes. Citing various problem gaming concerns, lawmakers effectively agreed to prohibit cardrooms from offering the player-dealer blackjack games they’ve come to depend on.
For context, California’s law prohibits anyone but state tribes from offering banked gambling. As a result, cardrooms have long employed third-party player-dealers and devised blackjack variants that align with the local regulatory framework. The use of third-party proposition player services (TPPPs) has become synonymous with cardrooms, which are a major contributor to local economies.
Speaking of player-dealers, the new rules do not entirely prohibit the idea, although they do state that the player-dealers must change every 40 minutes.
The rules came into effect on April 1, although cardrooms have until May 31 to submit their compliance plans. This means that gaming would remain largely unchanged for a few months. However, industry representatives are concerned about what comes after that.
Cardrooms Took the Matter to Court
California’s cardroom sector has staunchly rejected the new regulations, claiming that they would devastate not only the industry but also entire local economies. Several areas in California receive a large chunk of their tax revenues from the cardroom industry, meaning that the new laws could have much broader effects than intended.
In addition to that, industry representatives argued that the new laws would jeopardize thousands of jobs. The industry currently employs many men and women, who are experiencing significant uncertainty due to the new regulations.
In any case, the industry has refused to sit idly while the new regulations take effect and has taken the matter to court, hoping to secure an injunction.
At the same time, tribal authorities seem pleased with the changes. Tribes have long believed that cardrooms infringe on their exclusivity to offering gambling and have long protested the cardroom industry’s existence.
Representatives said that they were happy with the AG’s decision and expressed hope that California would properly enforce the new rules.
