California card rooms will see significant changes in the months ahead, as the state last week approved two new sets of regulations regarding blackjack-style games and the rotation of player-dealers that were announced Monday.
The rule changes approved by California’s Office of Administrative Law (OAL) will take effect 1 April, per a news release. After that, card rooms will have until 31 May to submit new compliance plans. The new regulations will significantly change the gameplay rules for blackjack and the parameters for player-dealers, a controversial practice that state gaming tribes say is an infringement on their casino gaming exclusivity.
Big changes to California player-dealer rules
The changes to controversial contractors known as third-party providers of proposition players, or TPPPs, and player-dealer regulations include:
- The player-dealer must be seated at the table at all times and the position must be offered to all players before every hand. This offer shall be “visible to surveillance cameras”.
- Each table must post the following notice: “Any player can assume the player-dealer position when it is offered. The player that assumes the player-dealer position cannot win or lose more than the amount they wager.”
- The role of player-dealer must rotate to “at least two players other than the TPPP every 40 minutes or the game shall end”.
- If the TPPP is serving as the player-dealer, the next rotation must be to another player.
- Additionally, TPPPs may accept and settle wagers only when they are serving as player-dealer.
- Only one TPPP would be permitted per table.
Changes to blackjack-style games lamented
The changes to blackjack-style game regulations include:
- Games would no longer be able to have a “bust” feature, where a player or dealer automatically loses if their total exceeds 21. Rather, wins and losses “shall be determined solely by whether the total points of a player’s hand is closer to the target point count when compared with the total points of the player-dealer’s hand”.
- The target point cannot be 21.
- With the absence of a 21 target, players or dealers would no longer automatically win a hand with that combination.
- In the event of a tie, or “push”, players would win, instead of the usual non-action.
- No games shall feature the words “21” or “blackjack” moving forward.
At an October card room-aligned protest in downtown Los Angeles, the impact on blackjack was a particularly sore subject. Compton Mayor Emma Sharif said “cities across LA County depend on [blackjack] revenue to survive”.
“Every time they want to shut down the place, they want to take blackjack-style games away; for me, I cannot handle that,” Nary Chin, a dealer at Gardens Casino, told iGB at the event. “They tell you, ‘Oh, it’s just a job, you go there to make money.’ But it’s a job that cares. Without our card room, I don’t think I would be here today, honestly.”
Contentious California card room process
Card rooms fought vigorously against the changes throughout a long, tense process, adjustments they feel are politically motivated. The rulemaking process began informally in 2023 and continued in earnest throughout last year. Approvals were expected by 11 April, which represented the one-year deadline from when the rulemaking notices were posted.
Two public hearings were held on the regulations last May, and the state received a combined total of 1,764 comments on the two sets of changes. The California Department of Justice indicated the feedback did not significantly alter the approval of both sets.
“After careful review and consideration of the comments, DOJ did not make any substantive changes to the proposed regulations,” the release said.
Additionally, the OAL also did not offer comments, request another public hearing or resubmit amendments. The state Attorney General’s Office referred iGB to its release when asked for comment.
California card room lobby ‘not ready to just give up’
The California Gaming Association, which represents the state’s card rooms, decried the changes as catastrophic for the sector.
“The [Bureau of Gambling Control] advanced the regulations without any showing of legal necessity, or any public harm or safety risk caused by these popular games, which have been approved by AG Bonta’s predecessors and offered in cardrooms for decades,” the association said in a statement. “More still, the Bureau failed to provide proper notice of the regulatory changes or meaningfully engage with the public as required by law.”
In comments to CBS Sacramento, CGA President Kyle Kirkland called the changes “devastating”, describing them as a “dramatic, hard, 180-degree pivot in how the law is being interpreted”. Kirkland added that card rooms are “not ready to just give up and fold up shop by April 1”, and there is some form of “legal pushback” expected ahead, though it is unclear what that might be.
Tribes, card rooms point fingers over rules
Several of the biggest California card rooms staged a protest in October outside of Attorney General Rob Bonta’s Los Angeles office. Workers and labour organisers picketed with “Monopoly”-themed signs accusing Bonta of colluding with tribes to promulgate the new rules.
The Bureau of Gambling Control, which operates under the AG’s office, said in its rulemaking notices the changes are meant to bolster existing regulations. Once enacted, the BGC said the rule changes would “benefit the public’s health, safety and welfare and the regulated industries because they will ensure that the public does not engage in, and the regulated industry does not offer, any form of gambling prohibited by Penal Code section 330 and the State Constitution”.
Card rooms argue that tribes are driving the changes, though both sides are active in state politics. Tribes have spent about six times more on state races since 2014, but card rooms are among the biggest lobbying clients in the state, per CalMatters. Bonta has received substantial career contributions from each sector, and his 2026 reelection campaign total currently sits at $7.3 million, up from $7.1 million for his 2022 campaign.
The California Nations Indian Gaming Association applauded the approvals Tuesday. In a statement, CNIGA Chairman James Siva called the approval “an important step” in protecting tribal sovereignty.
“The regulations further clarify that games and practices employed by commercial card rooms are indeed prohibited under California law,” Siva said in the statement. “Running a business contrary to that law is an illicit business, period. We hope that Department of Justice will now enforce these regulations so California can ensure a well-regulated gaming industry that is safe for consumers.”
How did we get here?
California tribes won exclusivity for Class III gaming with the passage of Proposition 1A in 2000. Class III is the house-banked, Las Vegas-style gaming most are familiar with. Because of this, card rooms can only offer peer-to-peer gameplay, using variants of traditional table games to differentiate them from Class III casinos.
The difference in revenue-generating abilities of the two styles of gambling is stark: California tribal casinos generated more than $12 billion in gross gaming revenue in fiscal year 2024 and card rooms’ economic impact is about half of that based on previous studies.
For both sectors and the communities they serve, gaming is the chief economic driver and supplies the majority of municipal funds. That said, the two sides have long warred over the legal technicalities surrounding gaming in the nation’s most populous state.
Ever since tribes were granted exclusivity, card rooms have evolved by offering new game types and partnering with TPPPs.
In a peer-to-peer setting, gameplay can be hard to facilitate, as most casual players do not have the funds or desire to act as the dealer/bank. State law also requires that the dealer role be rotated on a regular basis.
TPPPs are licensed by the state for the purpose of bankrolling player-dealers in card rooms. With the help of TPPPs, card rooms can host more games and deal more hands, thereby increasing revenue.
Tribal lawsuit dismissed, but rule changes similar
Behind the scenes, the inspiration behind TPPPs was controversial. The idea for them is widely credited to Bob Lytle, who served as the state’s top regulator before resigning to work in the card room industry. TPPPs emerged shortly after he stepped down in late 2007, though Lytle was later banned by state regulators for fraud and other charges in 2016.
Providers must be financially independent from card rooms, but there are many connections between them.
Tribes have fought against TPPPs and blackjack-style games since their emergence. However, as sovereign nations, they had limited legal avenues to pursue. That changed with the passage of SB 549 in 2024, which carved out a unique, one-time opportunity for tribes to sue state card rooms over those issues.
A suit under that law was filed in January 2025 and ultimately dismissed by the Sacramento County Superior Court, though that decision has since been appealed. Despite that setback, the rulemaking process unfolded around the same time, and the end result could still be seen as a victory for tribal interests. Many of the changes outlined in the two sets of rules align with tribal contentions.
Enforcement actions ramping up across California
The rule changes are the latest in a series of gaming-related moves from Bonta and state officials, all of which have impacted entities that clash with tribes. Last month, the DOJ seized 26 “Racing on Demand” machines from Santa Anita Park at Bonta’s direction, which prompted a lawsuit from the track.
The suit alleges that Santa Anita conferred with both the DOJ and the California Horse Racing Board to offer the machines, which utilised a “3X3” wager. That wager type is legal for live races, and Santa Anita said the state never indicated that it could not be used for past races.
In a statement to iGB after the seizure, the CHRB said it was “aware” of Santa Anita’s plans but “did not authorize installation of these machines, and will cooperate fully with any California Department of Justice investigation”.
Prior to Santa Anita, Bonta’s office over the summer issued a long-awaited legal opinion essentially declaring all forms of daily fantasy sports, another tribal foe, to be illegal in the state. A state ban on sweepstakes sites was also signed into law in October.
And in 2022, Indian Country defeated an online sports betting initiative, Proposition 27, a resounding setback for the commercial bookmakers that backed it. Prop 27 was the most expensive state ballot fight in US history, with a total of $463 million in spending for and against.
Jess Marquez
Jess has covered the global gaming industry since 2022. A native of Reno, Nevada, he’d like to note that it’s Ne-va-da, not Ne-VAH-da.
Original article: https://igamingbusiness.com/casino-games/casino-regulation/california-card-rooms-new-regulations-impact/
