The battle between a segment of California's tribal gaming industry and the state's cardrooms over those cardrooms' continuing right to offer certain "third-party proposition player" (TPPP) card games is once again working its way through the California state legislature, in the form of a repurposed Senate measure. California Senate Bill 549, if passed, would grant any California tribal nation the right to sue any California cardroom offering such games.
In attempting to grant such a right, the bill's languge would allow the tribal nations to indirectly litigate the repeated rulings of the California Gambling Control Commission that the cardrooms' TPPP games, as configured, are legal under California law, although the state itself could not be held liable for damages, unlike the cardrooms. However, any ruling against the cardrooms would invalidate and usurp the CGCC's previous rulings on the topic.
SB 549 would create a three-month window at the start of 2024 under which any California tribal nation could sue any cardroom offering such TPPP card games. Much of the bill's language was copied over from a portion of last year's historic and massively unpopular Proposition 26, which would have granted the state's tribal nations and pari-mutuel outlets exclusivity to offer sports betting in California, at approved live venues only, while freezing out other would-be interests.
The anti-cardroom language was attached within Prop 26 as a section titled “Enforcement Against Unlawful Gambling Activities," though that was a misnomer, as the cardrooms' TPPP games remain legal after a decade's continuing review by the CGCC. In its entirety, Proposition 26 was massively unpopular with voters. Despite a historic, record-setting spend of roughly $600 million by tribal interests, Proposition 26 failed by a 2:1 margin.
Education bill repurposed for latest assault
Not to be swayed by public opinion, the exclusivity-demanding coalition behind Proposition 26 returned to the California legislature as the likeliest avenue for success. SB 549 actually began as an education-related bill when submitted in March by its author and primary sponsor, State Sen. Josh Newman (D-Fullerton).
In June, Newman stripped out most of the bill's original language and replaced it with text titled as the "Tribal Declaratory Relief Act of 2023." The text, with the removal of some elements and the creation of the 2024 window, is largely the same as the TPPP-attacking section of last year's failed Prop 26.
As occurred last last year, the state' cardrooms are already lined up to oppose the bill, which has passed a couple of preliminary, process-related votes but has yet to be debated on the merits. The cardrooms' arguments against the bill remain the same as in 2022.
First, the TPPP matter is under the auspices of the CGCC, which has ruled in the cardrooms' favor on multiple occasions. Also, any pathway that allows tribal casinos to sue cardrooms directly exposes the cardrooms to huge expenses in funding a legal defense against the wealthy tribal casinos. The cardrooms have already claimed that such a pathway would allow the hardline tribal coalition to financially bludgeon the cardrooms into submission despite the topic already having been decided in the cardrooms' favor.
SB 549's creation of the early-2024 window foretells that the bill's backers will force the issue to be considered in the coming months. The last recorded action on the bill took place on the parallel Assembly version; after being amended, that bill was pulled from the Committee on Education and moved to the Assembly Judiciary Committee. There, in July, it was approved on an odd 6-0-5 vote, with barely a quorum present, and re-referred to the Assembly's Committee on Rules. No further action has been taken on the measure.
