California Cardroom Licenses Open for Applications Again
California has unique gambling laws. The only full-fledged casinos in the state are a part of a tribal compact for Native American tribes to open gambling establishments on their lands. The rest of the cardrooms in the state are just that – cardrooms only.
For many years, though, no new cardroom operators could obtain licenses to open new establishments due to a long-standing moratorium. As of January 1, that moratorium is over.
California is open for cardroom business.
California Cardroom Law
The California Gambling Control Commission (CGCC), in coordination with the state’s Attorney General and Department of Justice, have a public resource booklet of gambling laws and regulations. It is 543 pages long.
While everyone is likely to click that link and curl up on the couch to read it, let’s just get to the pertinent parts for the purpose of this piece.
As for federally-recognized tribes in California, there are 109 in total, with many of them offering some type of casino and even secondary locations. The number of slot machines and the date of the most current compact vary.
Cardrooms, on the other hand, may only offer a limited number of games. And those games are highlighted by the requirement that the house never occupy the player-dealer position. That position must be “continuously and systematically rotated amongst each of the participants during the play of the game” and the player-dealer can only win or lose a fixed wager during the game.
Specifically, Chapter 5 of Division 8 of the California Code is the Gambling Control Act and reads:
“In addition to any other limitations on the expansion of gambling imposed by Section 19962 and or any provision of this chapter, the commission may not issue a gambling license for a gambling establishment that was not licensed to operate on December 31, 1999, unless an application to operate that establishment was on file with the department prior to September 1, 2000.
“This section shall remain in effect only until January 1, 2023, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2023, deletes or extends that date.”
According to the CGCC, there are 84 active licenses for cardrooms in California at this time, though, a number of them are not currently operating or are doing so with conditions.
Importance of Dates
As noted, the above law states that gaming establishments must have been registered with the CGCC prior to the year 2000. And there was a moratorium on opening new establishments – effectively expanding gambling – since 1995.
That moratorium was scheduled to expire at the end of 2022. The legislature knew that it had to pass an amendment to the law to extend that moratorium to keep it from expiring. However, it didn’t do it. They actually did discuss it per SB637, which would have pushed the date out to January 1, 2024, but the final vote to accept proposed amendments in the Senate Governmental Organization Committee was three-to-three with nine members not putting a vote on the record at all. It never made it to the Senate floor.
As of January 1, 2023, it is mostly open season for cardrooms in California. Of course, there are many requirements to meet in order to apply for a license. And, the local jurisdiction in which one is applying for said license must have enacted an ordinance that allows for gambling and expanded gambling. That ordinance must detail:
-hours of operation
-patron security and safety protocols
-games to be played
-number of gaming tables
Voters in said jurisdiction must also approve any ordinance enacted after January 1, 1984. And regardless of that date, any expansion that increases at least 25% of the gambling industry in that jurisdiction must be approved by the voters of that locale.
New ordinances then must be submitted to the Bureau of Gambling Control for review and approval. If everything is in compliance with pertinent Business and Professions Code regulations pertaining to the Gambling Control Act, the CGCC will then consider issuing a gambling license.
Change Can Still Happen
The 2022 year was filled with contentious issues leading up to the November election, one of which was a pair of gaming propositions regarding sports betting in tribal gaming establishments. Neither passed.
However, the debate over the propositions highlighted the stark differences between the views of the California cardrooms and Native American casino operators. Sports betting was on the menu with the two propositions, but Prop 26 would have also allowed tribal casinos to add table games like roulette to their casino floors. Cardrooms opposed this due to the threat of losing business.
Hundreds of millions were spent to get 17% of Californians to vote yes. You rarely see a referendum with that little support. Combined, the 2 referendums don't hit 50%, at least at the moment. 2/
— Steve Ruddock (@SteveRuddock) November 9, 2022
What the two did agree on was the need to extend the moratorium. With time needed to work out a table games agreement between cardrooms and tribal casinos, they didn’t want more cardrooms to begin popping up throughout the state in the process. That extra competition would hurt negotiations and take business from existing gambling establishments of all kinds.
End of cardroom expansion moratorium could hurt legislative efforts for sports betting in California https://t.co/sJ1L9CeuE1
— CDC Gaming Reports (@CDCNewswire) November 8, 2022
Anything can happen in California. Lawmakers there have been considering online poker for nearly two decades, and they have yet to overcome Native American-African American issue.