California’s largest card club owners are seeking a five-year extension of a state law that protects existing clubs’ monopoly on non-tribal poker in California.
The bill, SB 213 by Sen. Dean Florez, D-Shafter, would extend an existing moratorium on new card clubs from 2015 to 2020.
The bill was was placed on the suspense file in the Assembly Appropriations committee this week.
Supporters of the bill say the moratorium must be extended now so that local governments, who rely on card club revenues, can depend on that revenue source for their planning. Opponents say that is a flimsy rationale aimed at protecting a monopoly for the state’s 91 licensed card clubs, and not allow other cities or smaller clubs to get into the game.
The measure is being pushed by the state’s largest card clubs. These clubs are eager to protect their market share of the state’s gaming business. Card clubs have bristled at the threat posed to their business by the growth in tribal gaming. But unlike tribal casinos, card clubs are allowed in California’s urban centers.
Gov. Schwarzenegger signed a proclamation in 2005 stating his opposition to the expansion or tribal gaming into any urbanized area in the state.
Card club interests have also invested heavily in Florez, who is a former chairman of the Senate Governmental Organization committee and a candidate for lieutenant governor in 2010.
According to records from the secretary of state’s office, card club interests have given more than $200,000 to Florez’s Senate and lieutenant governor accounts since 2007.
Among those donors are some of the sponsors of SB 213. The Commerce Club, Hawaiian Gardens Casino, Hollywood Park Casino and Lucky Chances Casino are all listed as officially in support of the bill.
Those four clubs, and their employees, have given Florez more than $150,000.
The bill is still opposed by Bay 101 Casino, a San Jose-based card room that argues the moratorium extension would limit the card room’s opportunity to expand. In a letter stating their opposition to the bill, Bay 101 argued without the “ability to grow over the next eleven years, normal overhead costs would increase to a point where many small and mid-size card rooms would be forced out of business.”
Other opponents of the bill include Cheryl Schmidt, director of Stand Up For California, a group dedicated to limiting the growth of gaming in California. Although the bill would limit the growth of non-tribal gaming, Schmidt says she has other concerns about the way card clubs are regulated.
“There needs to be some sort of new criteria developed for issuing licenses for new card clubs,” she said. “The state has the right to regulate the industry intensely. ”
Unlike tribal casinos, card clubs cannot offer house-banked games like traditional blackjack or slot machines. But card clubs have thrived over the booming popularity of Texas hold ‘em, and other games like pai gow are also extremely popular.
In all, there are 91 licensed card clubs in California. Those clubs are allowed some limited growth, but no new clubs are allowed.
The rules for California card clubs were set forth in the Gambling Control Act of 1998. That law stated that no new gambling establishment could be opened in a city or county that did not have an existing gaming room before 1984. Local governments were left with the power to regulate gaming rooms including betting limits, hours of operation and the location of card rooms and other gaming establishments.