Tribes waste no time suing to block ‘California Blackjack,’ other Vegas-style games in cardrooms

On the first day they were permitted to do so, several of California’s largest gaming tribes filed a suit on Thursday alleging that the arcane system cardrooms and related businesses employ to offer “California Blackjack” and other Las Vegas-style games is in violation of state law.

Under Proposition 1A, approved by California voters in March 2000, tribal casinos have the exclusive right to operate card games using house money in California. These are so-called “banked” games like Blackjack and Baccarat, which pit gamblers against the house.

But cardrooms say they use a workaround that legally allows them to offer banked games through the use of third-party proposition players (TPPP), which are special, licensed businesses that work within cardrooms.

TPPP employees volunteer to act as the house or bank at every table where banked cardrooms are played. Before a dealer deals a hand of Blackjack, he or she offers all the players the chance to serve as the house or bank for a hand or two. Most gamblers don’t have the funds to cover that kind of action – but TPPP employees do. So TPPP workers, who must wear badges to differentiate themselves from the employees in a cardroom, volunteer to play the role of the bank.

Cardrooms say that by partnering with TPPPs they are legally able to offer banked games because they are not serving as the house or bank, the TPPP is. Tribal casinos, on the other hand, say the cardroom-TPPP system violates the law and they’ve tried to sue cardrooms over this before, but the issue was dismissed over a lack of standing by the tribes. As sovereign nations, judges have ruled, the tribes aren’t eligible to sue in courts.

Last session, former state Sen. Josh Newman authored legislation, SB 549, to give tribes the legal standing they need to raise this issue in court – but just for a limited time and just for this one issue. The bill passed out of the Legislature on Aug. 31, and it was signed into law by Gov. Gavin Newsom on Sept. 28.

The bill went into effect on Jan. 1 – Wednesday – when the courts were closed for New Year’s Day. Thursday, the first day tribes were permitted to file a suit, a group of them did so. The press release was sent out before 11 a.m.

Seven heavyweight tribes
“California’s prohibition on banked games in card rooms can’t be just another broken promise to California’s Indian tribes,” said attorney Adam Lauridsen, of the San Francisco law firm Keker, Van Nest & Peters, in the press release. “The California Constitution grants tribes the exclusive right to offer blackjack, baccarat, and other banked games in tribal casinos. As part of exercising their rights, tribes have collectively contributed hundreds of millions to the California state budget through gaming-compact payments and provided crucial services to broad communities.  Card rooms have brazenly rejected this voter-approved framework and instead forged ahead with offering illegal Vegas-style games.  The fact that card rooms are making lots of money from breaking the law is no defense.”

Lauridsen is one of several attorneys with Keker, Van Nest listed as counsel for the tribes in the 153-page complaint filed in Sacramento County Superior Court. The plaintiffs are some of the biggest names in California tribal gaming:

• The Agua Caliente Band of Cahuilla Indians, which operates three Coachella Valley (Riverside County) casinos in Palm Springs, Cathedral Cityand Rancho Mirage;
• The Barona Band of Mission Indians, which operates the Barona Resort & Casino in Lakeside (San Diego County);
• The Pechanga Band of Indians, which operates the Pechanga Resort Casinoin Temecula (also Riverside County);
• The Sycuan Band of Kumeyaay Nation, which operates the Sycuan Casino Resort in El Cajon (also San Diego County);
• The Viejas Band of Kumeyaay Indians, which operates the Viejas Casino & Resort in Alpine (San Diego County);
• The Yocha Dehe Wintun Nation, which operates the Cache Creek Casino Resort, an hour west of Sacramento; and
• The Yuhaaviatam of San Manuel Nation, formerly known as the San Manuel Band of Mission Indians, which operates the Yaamava’ Resort & Casino in Highland (San Bernardino County) as well as the iconic Palms Casino Resortin Las Vegas.

The lawsuit lists a whopping 96 defendants, a mix of both cardrooms and TPPPs. The suit opens by accusing them of “brazenly” profiting “from illegal gambling,” then systematically lists the games they offer that the tribes believe are in violation of the law.

Cardroom jeopardy
For example, the suit says the Hustler Casino, a cardroom in Gardena, offers or could offer more than two-dozen specific games with names like 13-Card Chinese Poker, 2 Way Winner and Fortune Pai Gow Poker that the tribes allege violate the law.

The suit also alleges TPPPs provide cardrooms “an illegal interest in games,” an allegation informed, in part, by a Capitol Weekly story on the relationship between cardrooms and TPPPs published in late November 2023.

If the tribes prevail in this suit, the future of cardrooms is seriously in doubt as the games identified by the tribes are major economic drivers for their long-time rivals. It’s not at all a stretch to say that cardrooms could close or even cease to exist entirely if the tribes win, which could be devastating for some cities that depend on cardroom revenues for their budgets.

Still, the cardrooms say they believe they will defeat the tribes in court.

“We are confident that California’s cardrooms are operating table games in full compliance with the law, just as they have done for decades,” said the California Gaming Association, which represents cardrooms, in a prepared statement. “Cardrooms offer tens of thousands of good-paying jobs, pay hundreds of millions in taxes, support local communities, are licensed by the State, subject to extensive regulatory oversight, and offer legal games that have been reviewed and approved by the California Department of Justice. This attempt by tribal casinos to shut down lawful competition by tax-paying California businesses will fail.”

Under SB 549, tribes may file suits against the cardrooms until April 1. More than one lawsuit could be filed; it’s unclear at this point if more suits are to come. If another case or case is filed, they will be consolidated in front of Sacramento County Superior Court Judge Lauri Damrell.