Casino games at cardrooms remain a point of contention in California

California Sports Betting, Online Poker Helped By Tribes’ Loss In Court?

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A trio of California gaming tribes saw their efforts to stop casino-style games at the state’s cardrooms meet an untimely demise in federal court last week.

The seeming resolution at least opens a small crack in the door for the possibility of sports betting and online poker in the state.

Why? Because the issue has been a point of contention to the two biggest gaming lobbies in the state. With that obstacle seemingly out of the way, it could lead to re-engagement on other forms of gambling expansion in the state: namely, sports betting and online poker.

The cardroom court case in California

The US District Court for the Eastern District California dismissed a lawsuit brought by the Yocha Dehe Wintun Nation, the Viejas Band of Kumeyaay Indians and the Sycuan Band of the Kumeyaay Nation.

The case was brought against the state of California and Gov. Jerry Brown. But it centers around the state’s many cardrooms and the casino-style games like blackjack and baccarat that they offer.

The tribes have long held that cardrooms offer such games illegally, that they have the exclusive right to provide them in California. Cardrooms say they operate within the law because they are not technically house-banked but are dealt and banked by players. (The house gets a cut of the action.)

From the judge’s dismissal order:

  • Plaintiffs (Tribes) argue the most-recently entered Compacts guarantee the same right of exclusivity that was bargained for in the 1999 agreements. The Court disagrees. The Compacts, although recognizing the right of exclusivity provided by the California Constitution, do not include any express terms regarding Defendants’ obligation to preserve that right. In fact, the Compacts contemplate the abrogation of that right, providing the Tribes limited recourse in the event their rights of exclusivity lapse. 
  • Plaintiffs’ (Tribes) claim requires a showing that the Compacts created an obligation by the State to adopt Plaintiffs’ definition of “banking and percentage card games.” Nothing in the Compacts suggest such an obligation. In fact, Plaintiffs’ own complaint undermines the notion that the terms of the Compacts presupposed how Defendants would interpret and enforce state law.

A win for cardrooms …

Here’s California Gaming Association President Kyle Kirkland:

“We are pleased that the Court dismissed this lawsuit by these California tribes against the State of California over alleged violations of their tribal gaming compacts.  The Federal Court ruled that the compacts do not give the tribes exclusivity over gaming in California. This litigation was an attempt to eliminate competition from local cardrooms, threatening thousands of California families and dozens of communities statewide.

We will continue to oppose specious tribal attacks on our industry, employees and communities. Tens of thousands of Californians count on cardroom living wage jobs to support their families, and dozens of communities rely on the tax revenue we generate to support vital public services.  We will not stand by quietly while wealthy tribes try to misuse court resources to hurt our employees, their families and our communities.”

That’s all a bit of hyperbole because the tribes do have a legitimate case from a common-sense standpoint, if not a great legal case based on results to date. (Let’s all remember that New Jersey lost multiple times in federal court in the federal sports betting case before finally winning in the US Supreme Court in 2018.)

That’s not really the end in California…

The dismissal, however, doesn’t mean that tribes’ legal options are exhausted at the federal level. There are other federal court districts where other gaming tribes could, in theory, bring action.

No matter what any court finds, it’s not likely to placate tribes, who believe the cardrooms simply exploited a loophole to offer casino table games that they weren’t meant to have.

But the latest dismissal could potentially be the beginning of the end of disputes between tribes and cardrooms on the issue of cardrooms’ banked games. The tribes have also lost cases on the matter in the California Court of Appeal.

So, does this mean anything for CA online poker and sports betting?

Well, that’s not clear, and the outlook may not be rosy.

Back in 2018, tribes seemed not very interested in negotiating on either poker or sports gambling as long as the table-game issue was out there.

But if the state of California isn’t going to take action, and the courts are going to find in the state’s and cardrooms’ favor, then any real remedy on this front is going to be difficult for the tribes to find.

That would seemingly take a point of friction away, even if the tribes aren’t happy about it.

It still comes down to this: If tribes really want online poker and sports betting, and if it happens on their terms, then it will happen in California. For now, that impetus won’t manifest until 2020 it appears, if at all.

Anyway, no one should hold their breath waiting for California sports betting and online poker to happen. But it’s perhaps incrementally more likely to happen the closer we get to a resolution of the casino games issue.

- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner. He has played poker recreationally for his entire adult life and has written about poker since 2008.
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