In a significant legal triumph for California’s cardrooms, a judge from San Francisco Superior Court determined on Tuesday that the state’s Bureau of Gambling Control (BGG) overstepped its boundaries by implementing new regulations that limit blackjack gameplay.
Judge Richard Darwin sided with the California Gaming Association (CGA), which advocates for the cardroom sector, asserting that the legislature entrusted rule-making authority regarding gambling to the California Gambling Control Commission (CGCC), rather than the BGG.
The BGG, which falls under the jurisdiction of the Justice Department, can approve games on an individual basis, but lacks the power to ban or significantly alter them, according to the ruling.
Cardroom operators argued that the new regulations would have effectively banned blackjack from their establishments.
A Turning Point
As per California law, tribal casinos maintain exclusive rights to operate specific house-banked casino games. However, cardrooms historically have utilized a legal workaround through third-party proposition player services (TPPPs).
These independent entities serve as the bank during blackjack-style games, allowing cardrooms to claim they do not directly engage in offering prohibited house-banked games. Tribal gaming representatives have consistently argued that this arrangement unlawfully encroaches on their exclusive privileges.
The proposed regulations would have mandated a rotation of the “player-dealer” role among players every 40 minutes, which would prevent TPPP companies from continuously acting as the bank.
Furthermore, players would no longer automatically lose upon exceeding 21. Instead, games would adopt a different target point, with hands resolved by comparing the player’s cards against the player-dealer’s. Cardrooms would also be prohibited from labeling games as “blackjack” or “21.”
Operators contended that these modifications would render many of their most sought-after games commercially unviable.
“More Than Just Gaming”
“For over a year, we’ve maintained that this case encompasses much more than just gaming; it questions whether the Attorney General and his regulators can bypass legislative authority and unilaterally alter long-standing laws. Today, the Court affirmed that they cannot,” stated Kyle Kirkland, president of the CGA.
He asserted that the proposed rule changes aimed to benefit a select few powerful gaming tribes at the cost of local communities.
Numerous cities hosting cardrooms depend on these businesses for crucial revenue that supports essential services like law enforcement, parks, libraries, and youth programs. Notably, San Jose generates roughly $30 million annually from cardroom activities, according to city officials.
The California Attorney General’s own impact evaluation indicated that the new regulations could have wiped out at least 50% of cardroom jobs and revenue, potentially leading to closures.