California card rooms achieved a crucial legal victory on Tuesday as the state's Bureau of Gambling Control was found to have acted beyond its authority in implementing two extensive sets of regulations that took effect on April 1. San Francisco Superior Court Judge Richard Darwin delivered the ruling, which upheld a preliminary injunction from May that prevented enforcement of the regulations while arguments were made. Judge Darwin indicated during the hearing and again on Tuesday that the state faced a challenging task in convincing him otherwise, which they ultimately did not succeed in doing.
The regulations at the center of this case impacted blackjack-style games and the use of player-dealers, substantially restricting both practices. This could have had catastrophic effects on card room revenue and tax income. The Bureau of Gambling Control, one of California's two gaming regulatory bodies alongside the Gambling Control Commission, spearheaded these rule changes, which the card rooms contended were beyond its scope—a view that Darwin supported.
"I find that in issuing the subject regulations, the Bureau acted in excess of the authority granted to it by the legislature and the Gambling Control Act," Darwin stated after hearing arguments from both parties. A follow-up case management conference is scheduled for July 10 to address administrative matters.
The attorney general's office expressed disappointment with Tuesday’s ruling, indicating they are reviewing their options and will respond appropriately. The California Nations Indian Gaming Association did not provide a comment.
Relief echoed across the card room industry following the court's decision. The new regulations would have forced card rooms to implement significant alterations to blackjack games, eliminating features such as the "bust" element and the target score of 21. Regulations for player-dealers included mandatory dealer rotations every 40 minutes and required that the position be offered to all players before each hand. The state had anticipated that these changes would cut blackjack revenue by approximately 50%, acknowledging these impacts in an internal analysis.
Industry representatives were worried about potential closures, with several cities considering fiscal measures like sales tax increases to mitigate projected losses. Kyle Kirkland, president of the California Gaming Association and owner of Club One Casino in Fresno, remarked after the hearing that the ruling was a validation for card rooms. "The reaction from the industry and our members is relief. We felt like we were on the right side of the law and the argument, and we heard that back in May when we got the preliminary injunction. Today, this just cements it," Kirkland stated.
The litigation pits several groups against each other: card rooms, Attorney General Rob Bonta on behalf of the state, and California's influential gaming tribes. While card rooms and the attorney general's office were the main parties involved in this case, card rooms have consistently asserted that the state is acting under pressure from tribes, which substantially outpace card rooms in revenue and influence.
Tribes maintain exclusive rights to Class III gaming in California and argue that blackjack-style games and player-dealers violate their exclusivity. However, state courts have yet to back their claims; a similar lawsuit filed by tribes through SB 549 was dismissed last year and has not been appealed.
Amid his campaign for re-election this November, Bonta has become more active in gaming issues, actions that have generally hampered tribal opponents. Along with changes affecting card rooms, Bonta has initiated lawsuits related to prediction markets, removed gaming machines from Santa Anita racetrack, and issued a legal opinion deeming daily fantasy sports illegal in the state.
California's court system is the largest in the U.S., and the duration of any appeal remains uncertain, with no guarantee that the state Supreme Court will hear it. According to records, from September 2024 through August 2025, the California Supreme Court dealt with over 3,500 petitions for review, hearing arguments in just 52 of those cases and issuing 45 written opinions.
A central legal point in Darwin's court was not solely the content and consequences of the regulatory changes, but rather the authority under which the BGC issued them. Card room attorney Jeremy Kreisberg argued that the Bureau’s power pertains to individual games, not broad regulations about game categories and classifications.
"The power to categorically prohibit games is not reasonably related to the Bureau's individual game approval authority, and that's the statutory problem with what the Bureau is trying to do here," Kreisberg contended. In contrast, Deputy Attorney General Sharon O'Grady cited penal codes and prior cases suggesting that the BGC was within its rights to pursue the rule-making, although she was ultimately unsuccessful. "Regulation is not purely policy – these regulations are implementing the details of implementation, they are not policies," she stated. "Penal Code Section 330 sets the broad policy. These are implementation regulations, not policy-setting regulations."
