The ongoing effort by California tribes to take the state’s cardrooms to court has shown some signs of life, as the Tribal Nations Access to Justice Act (TNAJA) passed the Assembly Judiciary Committee as the legislature prepares to break for the summer. The tribes want to challenge whether the cardrooms’ approach to player-banked games constitutes an infringement on their exclusivity over casino gaming.
The sovereign status of Indian tribes generally means that only federal laws apply to them. One implication is that state courts typically won’t consider cases by or against them. Meanwhile, federal courts won’t consider this complaint because the question is whether the cardrooms are violating California’s gambling laws.
However, some lawmakers would like to see such a challenge proceed. That’s why the TNAJA would create a one-time exception for this specific challenge.
The Governmental Organization Committee advanced the bill by a vote of 15-1 on July 2. However, it still has one more committee to get through before a floor vote.
Matt Kredell at PlayUSA provides a detailed rundown of the bill and the debate around it. (PlayUSA is a sister publication to Bonus.)
The rivalry between tribes and cardrooms is profoundly connected to the difficulty California has had in passing any sort of gambling expansion. In fact, the tribe-supported version of the 2022 sports betting proposition included a provision similar to the TNAJA, allowing the tribes to sue. Naturally, that made the cardrooms fierce opponents of the proposition. The tribes had their own objections to the alternative proposal. In the end, both versions failed miserably.
Whatever happens—or doesn’t happen—with TNAJA could prove to be an important wrinkle in the saga and impact future expansion efforts.
Tribes Object to Prop Players as Bankers
The feud between the tribes and the cardrooms dates back to 2000 when California made several changes to its gambling laws. Most importantly, it created an exception to its prohibition on casino gambling, granting the tribes exclusivity over such games.
At the same time, it amended its policies on cardrooms. These commercial establishments can’t offer player-against-house gambling. Traditionally, they host poker games. However, the new laws allowed them to offer other sorts of card games, so long as a player takes on the house’s role as “banker.”
Real money casino gambling is a lucrative business. Inevitably, any company offering products similar to real money casino gambling will want to push the boundary as much as possible.
The trouble for cardrooms was that players didn’t always want to bank the games, as it could potentially put them on the hook for a big payout. Cardrooms’ solution was to hire third parties to play the games and serve as bankers. The authorization of such “prop” players is another change that was made to the laws in 2000.
However, to the tribes’ eyes, there’s little difference between a game banked by the house and one banked by a third party employed by the house. They want a court to decide where to draw the line for what games and banking structures the cardrooms can offer.
Sovereignty is a Double-Edged Sword
The status of indigenous tribes as sovereign nations within the geographical borders of the US creates a host of thorny legal and ethical issues. It comes up a lot in the world of gambling because that sovereign status and the Indian Gaming Act of 1988 have made gambling the primary revenue stream for many tribes.
In many cases, it is to the tribes’ benefit. For instance, the Shoalwater Bay Tribe of Washington State successfully used its immunity to undermine an attempt by Maverick Gaming to challenge the state’s sports betting model, which gives the tribe a monopoly.
However, it can cut both ways and has vexed the California tribes on this issue.
As the bill’s name suggests, the tribes have argued that exclusion from the California court system denies them access to justice. PlayUSA reports that California Nations Indian Gaming Chairman James Siva compared the situation to one in the 1800s, when tribes were unable to challenge the appropriation of their lands by the state.
Conversely, the cardrooms argue that fairness demands that the protection works both ways. If they wanted to sue the tribes, they would be unable to do so. By their logic, it is only reasonable that the tribes are unable to sue them.
The 2023 Effort Failed at This Stage
No further progress will be made on TNAJA until August. The legislature has adjourned for the summer but will be back in session on August 5.
At that point, the bill will have until the end of the month to pass the Assembly Appropriations Committee, a floor vote, and finally, the Senate.
Although the bill’s name is new, a similar piece of legislation made it precisely this far last year. Following the summer recess, however, it saw no further action, and the same fate might await the TNAJA this year.
If it does pass, the tribes would have until April 1, 2025, to file their suit in the California Superior Court for the County of Sacramento.
Potential Impact on Gambling Expansion Chances
Since the 2000 expansion, California has become a proverbial political quagmire for additional gambling efforts. The tribes, the cardrooms, the horse racing industry, online gambling companies, and even the casinos in neighboring Nevada have clashed over every suggestion of new gambling. There’s so much money on the table that no one wants to see anyone else getting a larger slice of the pie.
Anything that impacts those rivalries is bound to become a plot point in that larger story of California gambling expansion. Exactly how it will change things is up for debate.
The immediate impact of TNAJA passing would likely be to stall any potential effort in 2025. Lawmakers in many states have been reluctant to consider new gambling laws while the status quo is in question. It’s hard to imagine that there would be any discussion of California online casinos or sports betting until the lawsuit concludes. Add in a near-certain appeal, and 2026 would likely be a write-off as well.
In the longer term, a verdict in the cardrooms’ favor might make tribes keener on seeking new forms of gambling. The more secure their retail gambling income looks, the less likely they are to want to risk disrupting the status quo. Conversely, the more threatening the cardrooms look, the more willing they might be to set aside their differences with the online gambling companies and seek out something that would be thoroughly out of the reach of the cardrooms.
About the Author
