Legal and financial threats to the state’s cardroom industry are included in the language of California’s proposition 26, which would allow in-person sports betting at tribal casinos. The initiative would allow the casinos to circumvent the California Gambling Control Commission’s complaint process and instead file civil actions against the cardrooms.
Two of seven statewide referendums on November’s ballot seek to expand wagering opportunities, but in contrasting and competing ways, which could change the state’s gambling landscape. Both of the sports-betting proposals are at odds with each other and have received huge amounts of money from their stakeholders. The language that goes beyond sports betting and specifically poses legal and financial threats to California’s cardroom industry is included in Prop 26, in particular.
The California Sports Wagering Regulation and Unlawful Gambling Enforcement Act is a tribal-backed measure that would allow in-person sports betting at California’s roughly 80 tribal casinos, as well as authorizing those venues to offer various dice games and roulette. The state’s cardrooms are fighting back against the unpublicized language inside the measure. A long-established process that allows cardrooms to offer alternative forms of traditional house-banked games such as blackjack has been renewed by the controversial language.
There would be a new tribal avenue to fight against cardrooms
The battle over cardrooms in California has been going on for a long time. House-banked versions of games are not allowed in California because they have a dealer advantage and must be played by one player at a time. In the cardrooms version of these games, the players agree that a third-party prop player serve as dealer and bank teller, a workaround that California regulators have affirmed doesn’t violate state law.
Despite their complaints to the state being rejected on multiple occasions, the tribal casinos insist that the games do violate the law. If enacted, Prop 26 would allow the casinos to circumvent the California Gambling Control Commission’s complaint process and instead file civil actions against the cardrooms.
If the California Attorney General declines to take action against the cardrooms within 90 days, the tribal casinos and others are allowed to file their own complaints. There is a text that reads as follows.
Civil penalties and injunctive relief may be filed for any person or entity that becomes aware of any person engaging in any conduct that is illegal under Chapter 10 of the Penal Code. No additional action may be launched until the Attorney General’s action is dismissed without prejudice if the Attorney General files suit within 90 days of receiving the written request to initiate the action.
There were two cardrooms that sued in March to block Prop 26
There is a chance that California’s cardrooms could be hit by waves of tribal lawsuits, with the cumulative effect of causing financial harm, due to the deep-pocketed nature of many of the tribal entities seeking to ban the TPPP games. Two California cardrooms, Hollywood Park Casino and Cal-Pac Rancho Cordova, filed suit in March of this year, claiming the referendum was improper in combining multiple objectives into a single measure.
California election officials have allowed Prop 26 to move forward as signed by hundreds of thousands of Californian voters, which doesn’t preclude the issue from being raised again if Prop 26 passes in November. The cardrooms recognized that the open language of the suggested “unlawful gambling enforcement” was that the measure could open up the state’s cardrooms to innumerable lawsuits backed by tribal casinos’ very deep pockets.
Deven Kumar, General Manager of Hollywood Park, said that the sports-wagering ballot initiative would destroy competition with California’s cardrooms by granting more rights to Tribal casinos. This is not what the initiative process was designed to do, and certainly not what this initiative is advertised to do.
Hardline anti-online gambling entities are the backers of Prop 26
The Barona Band of Mission Indians and the Yocha Dehe Wintun Nation are two of the nine tribal-casino entities identified by Hollywood Park Casino as being the primary backers of Prop 26.
Most of these tribal nations make up the hardline coalition that has successfully thwarted a number of online poker initiatives in California over the previous ten years, which many readers will recall.The group is against all forms of online gambling, unless and until it falls within the control of the California tribes.
This is demonstrated by the November referendums. While Prop 26 would mostly benefit the tribal casinos, Prop 27 is an initiative that would allow online sports betting in the Golden State. While the above tribal entities have spent a lot of money in support of Prop 26, they have also spent a lot of money against Prop 27, which is backed by non-tribal gambling concerns. Props 26 and 27 have cost more than $350 million, and public lobbying efforts don’t appear to be slowing down. Spending on Props 26 and 27 accounts for almost 90 percent of the money spent on the seven referendums on the November 7 ballot.
The situation poses difficult choices for most California poker players, who have a heavy relationship with the sports-betting public. A Prop 26 loss eliminates the opportunity for Californians to visit live sports books in tribal casinos and a few racetracks for the foreseeable future, but it protects the larger interests of the state’s cardrooms. Several cardroom officials have testified that the disputed games are vital to the survival of the rooms, and several local governments in California, such as the City of San Jose, have come out against Prop 26 while citing the potential loss of jobs at these rooms.
There is a significant shift in California’s gambling landscape at stake with the November vote on Prop 26 and Prop 27.