California Card Room Regulations: New Rules and Ongoing Legal Battles

California card rooms entered a new chapter on Wednesday as major regulatory changes concerning blackjack-style games and player-dealers took effect, following extensive legal battles. The new rules have sparked concern among card room operators, who argue that these changes threaten their businesses and communities. A state economic analysis supports their worries, indicating significant potential financial fallout. In contrast, California's powerful gaming tribes, which secured exclusivity for casino gaming in 2000, assert that the new regulations reinforce their status by targeting illegal gambling practices. Over the years since the tribes were granted rights to offer Class III games, card rooms have adapted, creating new table game variants and utilizing third-party providers of proposition players (TPPPs). These rule changes mark the most significant development in the ongoing disputes over the legality of game variants and TPPPs. At the same time, tribal leaders from across California and the nation gathered in San Diego for the annual Indian Gaming Tradeshow and Convention. James Siva, chairman of the California Nations Indian Gaming Association, expressed to iGB that the adjustments in card room regulations represent a win for the gaming tribes. 'We were excited about the decision. It’s something that tribes have been advocating for the last 10 years,' Siva said. 'We firmly believe that the games they’re offering were illegal house-banked games, which is in violation of our exclusivity, our sovereignty.' He emphasized that the intent behind these changes was never to harm card room cities, but rather to uphold legal standards. Meanwhile, card rooms have initiated legal efforts to block the new rules, which were finalized in 2025 and approved in February. On March 9, the California Gaming Association (CGA) filed two lawsuits in San Francisco Superior Court, labeling the regulatory changes as an 'unprecedented power grab' by Attorney General Rob Bonta. In a move to stall the implementation of the regulations during ongoing litigation, the CGA sought preliminary injunctions just days before the rules took effect. Their 406-page civil lawsuit names Bonta and several state agencies as respondents. The complaints highlight that these agencies allegedly lack the authority to enforce blackjack regulations and claim that the new rules contradict state law and violate due process rights. As the litigation unfolds, cities that host card rooms are preparing for potentially significant financial losses. Last year, the Department of Justice predicted that blackjack revenue could be cut in half, with an estimated 25% of customers shifting from cardrooms to tribal casinos. The DOJ's analysis stated that in 2023, blackjack games in California cardrooms generated about $136 million in revenue, which could see a loss of $68 million under the new regulations, while tribal casinos could gain $34 million. For numerous California cities, the revenue generated from card rooms is vital, often constituting a large portion of their tax income. In Commerce and Bell Gardens, for instance, this revenue comprises over 40% of their general funds. Both cities are now in states of fiscal emergency and are considering quarter-cent sales tax measures on the June ballot to make up for the expected tax shortfalls. Cardrooms must submit new compliance plans by June 1, with a deadline of July 1 for final updates. Kyle Kirkland, president of the CGA and owner of Club One Casino in Fresno, criticized the regulatory changes as disregarding years of legal precedent. 'The attorney general’s office does their own internal analysis and casually says, “50% of card room revenue can go away” and just sort of breezily dismisses that,' Kirkland said. 'That’s no big deal for either the card rooms, or the 20,000 employees that work in card rooms, or the cities that we support and the communities that are dependent on us.' The updates to the rules governing blackjack-style games introduce significant modifications. Notably, players and dealers will no longer be able to automatically lose if their hand exceeds 21 and will instead have wins and losses determined by their scores relative to the target points, which cannot be 21. Additional changes state that players would win in the event of a tie, and the terms '21' and 'blackjack' will be banned from use. Regulations for TPPPs have also been revised, mandating that player-dealers must always be seated at the table and that the position be offered to all players before each hand. Other stipulations require posting visible notices regarding the player-dealer role and rotating the position after a set period. Various discrepancies about interpretations and precedence add to the complications surrounding these rulings. The state's Bureau of Gambling Control suggests the regulations are intended to clarify and enforce existing laws aimed at ensuring public welfare and compliance with legal gambling standards. Tribal gaming officials have long claimed that the card rooms’ operations exceeded permitted boundaries. Despite no significant complaints regarding these games apart from those from tribal lobbyists, Kirkland insists cardrooms have operated under their current models for years without issue. Under California law, games are not considered 'banked' if they involve rotating player-dealer positions and are limited in how they operate. Proposition 1A, which awarded the tribes exclusive gaming rights, identifies blackjack as Class III gaming, only legal through tribal-state compacts permitting such games. Although tribes have often cited the need for stricter enforcement of these rules, they had limited recourse due to their sovereign status until SB 549 was passed in 2024, allowing them to legally challenge card rooms. A suit initiated in January regarding this law was dismissed but is currently under appeal. Some tribal officials express disappointment that the new regulations did not go far enough despite acknowledging that they still achieve many of the original aims. 'Honestly, I had hoped the regulations would have gone a little bit further, but we understand and we applaud Bonta as the first AG to bring any action on this,' Siva noted at the IGA. Amidst the controversy, Attorney General Bonta is receiving increased scrutiny as he navigates these challenges. Since taking office in 2021, he has taken a more active role in gaming issues, often to the detriment of card room interests. He recently ordered the removal of 26 'Racing on Demand' machines from Santa Anita Park days after their installation, leading to a lawsuit from the racetrack claiming that Bonta had not previously indicated the machines' legality was in question. In addition, Bonta ruled that virtually all daily fantasy sports are illegal within California and backed a legislative ban on sweepstakes gaming last year. As of Thursday evening, the California Department of Justice has yet to comment on the new regulations. Bonta is up for reelection this November, having raised $7.5 million in campaign contributions since 2026, an increase from $7.1 million in 2022. Critics, including card room representatives, allege that tribal interests heavily influence his decisions. Kirkland pointed to substantial contributions from tribal groups as evidence of potential bias. Despite this, Bonta has also received donations from card room supporters, though those figures have decreased in the newest campaign cycle. Contributions from influential tribes appear to have declined since 2021, when Bonta received over $70,000 from several groups, including the Yuhaaviatam of San Manuel Nation and the Pechanga Band of Indians. This time, total contributions from those tribes are around $45,000, with several absent from the current funding list.