California's cardrooms are voicing strong criticism against tribal casino operators, claiming that the state allows affluent tribes to extend their gaming privileges without any revenue sharing. The California Gaming Association, which represents commercial cardrooms, stated that these tribal operators have become a $12 billion industry that effectively pays no taxes.
Kyle Kirkland, President of the CGA, expressed concern about the situation, emphasizing that with new taxes burdening California residents, it is inappropriate for wealthy tribes to gain further gaming exclusivity without contributing financially. His comments followed a significant ruling from the San Francisco Superior Court, which overturned California Attorney General Rob Bonta's efforts to prohibit blackjack at non-tribal venues, ruling that Bonta lacked the authority for such a statewide ban. Bonta has since appealed that decision.
The landscape of California's gambling industry is defined by over 65 tribes operating various gambling facilities. Although tribal operators do not face the same tax obligations as cardrooms, they are required to contribute to a revenue-sharing trust assisting tribes without gambling operations.
Recently, Governor Gavin Newsom finalized a 25-year compact with the Fort Mojave Indian Tribe, allowing the tribe to manage two casinos equipped with up to 1,200 slot machines and table games. However, this agreement also means the state will forgo a claim on the tribe's revenue, with the tribe only contributing 0.5% of its net earnings to a mitigation fund and covering regulatory expenses for California.
The CGA has criticized this arrangement, arguing that California residents deserve more equitable treatment rather than the preferential terms that enable tribal casinos to reap billions in untaxed revenue, leaving accountable taxpayers at a disadvantage. Kirkland characterized the agreement as a “scam” and pointed out that tribal casinos seem increasingly focused on stifling competition from tax-paying establishments while seeking to preserve their market dominance.
There is a historical context to these tensions; in March 2000, California voters approved a constitutional amendment permitting federally recognized tribes to run gambling operations on their lands. The CGA contends that the state is acting beyond the original intent of that public vote. Kirkland called for immediate discussions to address what he sees as a flawed agreement.
Unlike commercial cardrooms, most tribal casinos are not required to disclose their financial information, making it challenging to validate claims of their revenues. For instance, the San Jose cardrooms, Casino M8trix and Bay 101, together contribute approximately $30 million in taxes annually, suggesting revenues around $200 million. Had all tribal casinos been located in San Jose and followed similar tax obligations, the state could be looking at an additional $1.8 billion annually.
The CGA also pointed out that while tribes oppose the establishment of prediction markets, they are concurrently seeking to legalize untaxed sports betting for themselves.
Tribal casinos have recently reported record-setting revenues, with the National Indian Gaming Commission noting a year-on-year increase of over 5.3% to $2.3 billion in Gross Gaming Revenues for the fiscal year 2025. However, not all is going smoothly; the Department of the Interior required the Scotts Valley Band of Pomo Indians to cease operations at their makeshift casino within a week and has ordered them to abandon plans for a $700 million permanent facility in Vallejo.
Earlier reports indicated that top-earning tribal casinos generate more revenue than several leading hotel and restaurant chains. For instance, the Corning Rolling Hills Casino and Resort reportedly brings in about $126 million annually, while its competitor, Feather Falls Casino and Lodge, has earnings around $75 million. The Oroville-based Gold Country casino is also noted, with estimated annual profits of approximately $60 million.
