Tribal California Casinos Pick Up Monstrous Win

Native American tribes that operate California casinos have picked up a huge victory in the state legislature.

Senate Bill 549 (SB 549) is an initiative that would allow tribal California casinos to sue card rooms in the region to see whether they violate their exclusive gaming compact with The Golden State. As many experts continue to point, SB 549’s passage does not mean all card rooms will immediately be forced to shut down. This piece of legislation merely guarantees the tribes a chance to challenge select operations as they see fit.

Should we expect the tribes to exercise this right? What does this mean for the future of both California casinos and card rooms? And, of course, we have the years-old question: What does this latest legal gambling development mean for the outlook of sports betting in California?

Important Clarifications on Senate Bill 549

Tribes that run California casinos are already commemorating SB 549 as a big-time victory. “The passage of SB 549 is fantastic news for California’s tribal nations,” California Nations Indian Gaming Association Chairman James Siva said in a statement (via PlayCA).

With this said, SB 549 must still be signed into law. Beyond that, as Senator Josh Newman reiterated in a statement, the bill does not altogether portend doom for California card rooms:

“It’s important to note that this bill does not presume to resolve this long-standing issue directly. Instead, it simply provides a path for the courts to rule [on] whether or not cardrooms are infringing on the tribes’ right to offer the games exclusively. California tribes deserve an opportunity to achieve clarity by simply having their day in court.”

While the full details of SB 549 offer plenty of clarity, they also raise another question. Will tribal-operated California casinos exercise their right to bring card rooms to court?

California Casinos will Almost Assuredly Exercise the Rights Afforded to Them By SB 549

Many agree that this issue is basically a non-question. California casinos will of course exercise their right to bring card rooms into court.

It only takes a brief history of looking at tribal opposition to reach this conclusion. And make no mistake, the tribes have sturdy legs on which to stand. Adam Hensley of PlayCA outlines the basis of the tribal argument:

“California tribes believe they have exclusivity to legal gambling operations within the state. Card rooms are legal; however, they are not operated by Native American tribes. California tribes are permitted to offer lottery games, slots, and ‘banked’ card games (think blackjack) at their casinos. These are games in which the casino acts as a bank and handles wagers. Conversely, the cardrooms operate under the player-dealer umbrella. Tribes have in the past criticized cardrooms for utilizing this ‘umbrella,’ which allows players to act as the house or bank. In their view, third-party banks circumvent the law. ‘All too often throughout history, tribes in California were promised certain treaty rights and even large tracts of fertile land that were taken away from us,” Siva said. ‘In those cases, we were stripped of our ability to defend those rights, as we were denied access to justice.’”

This echoes the sentiment tribes laid out when discussing the legalization of online sportsbooks in the United States just a couple of years ago. They believe their gaming exclusivity should extend to sports betting, in addition to what card rooms offer.

It’s an opposition rooted in concern for opportunity. If California online sportsbooks and card rooms are allowed to offer the same services, it stands to dilute gaming market share for the tribes.

Tribes Face Opposition to Their View of California Card Rooms

Though many state legislators side with the tribes’ view of the matter, there is also plenty of opposition.

For instance, the California Gaming Association argues that eliminating card rooms would cost over 30,000 jobs. There is also the tax revenue to consider. The Golden State will be forfeiting the funds allocated to them by card rooms.

Prior to SB 549 passing through the state legislature, local officials protested its proposal. One mayor, Tasha Cerda from Gardena, went as far as calling card rooms “the backbone” of her community. She also said they accounted for at least 1,200 local jobs.

State officials no doubt considered all of these slants when voting. And it is not surprising that SB 549 passed anyway.

No, the relationship between lawmakers and tribal California casinos is not perfect. But most officials sided with tribes on the issue of California sports betting in 2022. They reinforced that support this past year. Members of the tech sector attempted to propose a sports betting bill of their own—without tribal collaboration. The opposition from the state legislature was swift and decisive. Lawmakers also recently approved of the construction of a Hard Rock California casino that’s expected to open in 2025.

Passing SB 549 by and large feels like an extension of that support. And it might provide a window into how attempts to legalize California sports betting unfold in the future.

Tribes Will Continue to Define California Sports Betting Negotiations

If it wasn’t clear before, it is definitely clear now. Local tribes, and the California casinos many operate, will play a major role in shaping the legalization of sports betting.

As things stand, it doesn’t sound like tribes want online sportsbooks in California until two years or so after retail gambling services launch. At first, this seemed like a concession online sportsbooks in the USA were not willing to let fly. They spent tons of money creating their own sports betting bill in 2022. They also funneled millions into counter-campaigning the initiative proposed by tribes.

Then, as now, a majority of state legislators sided with tribes. They want to preserve the exclusivity afforded to them by their gaming compact. And they also want to ensure California casinos operated by tribes have a chance to establish sports betting clientele before allowing corporations to enter the mix.

Any talk of sports betting in The Golden State starts here. It probably ends here, too. If and when the state legalizes sports betting, it’ll almost assuredly be without online operators receiving immediate permission to enter the market.

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