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Seven tribes filed a lawsuit Thursday (January 2) against dozens of cardrooms in California, accusing them of brazenly profiting from illegal gambling from some of the table games they operate.

The 153-page lawsuit was filed in the Superior Court in Sacramento about 24 hours after a new state law went into effect allowing tribes a limited, one-time state court action to determine whether blackjack, baccarat, and pai gow poker games that use third-party providers of proposition player services (TPPPS) violate state law and infringe upon tribal exclusivity over Class III casino gaming.

Senate Bill 549, known as the Tribal Nations Access to Justice Act, was sponsored by former Democratic Senator Josh Newman of Orange County, who lost his bid for re-election in November to former Republican Assemblymember Steven Choi.

California cardrooms spent more than $3m on campaign advertisements in the run-up to the election, targeting four lawmakers in November for their votes on the gambling bill.

Besides Newman, cardrooms successfully targeted outgoing Democratic Assemblymember Evan Low in his failed congressional campaign, as well as termed-out Democratic Assemblymember Brian Maienschein who lost his bid for San Diego city attorney. CalMatters reported that Laurie Davies, a Republican from San Diego County, won her bid for re-election, albeit narrowly, despite cardroom opposition.

“We are confident that California’s cardrooms are operating table games in full compliance with the law, just as they have done for decades,” said the California Gaming Association (CGA), a trade association that represents a majority of card clubs in the state, in a statement on Thursday. “This attempt by tribal casinos to shut down lawful competition by tax-paying California businesses will fail.”

The CGA added that cardrooms are licensed by the state, “subject to extensive regulatory oversight, and offer legal games that have been reviewed and approved by the California Department of Justice”.

As of December 2024, there were 72 licensed cardrooms in California.

Currently, many cardrooms offer blackjack or baccarat dealt by third-party proposition players. Tribes argue the games violate their exclusivity rights over house-banked gaming in California.

The California Nations Indian Gaming Association (CNIGA) was unavailable for comment Thursday. The law allowing the one-time lawsuit went into effect on January 1.

California voters passed Proposition 5 in 1998, which authorized a standard “Tribal-State Gaming Compact” to be entered into by the state and tribes planning to operate casinos with slot machines and banked games. In 2000, 64 percent of voters approved Prop. 1A allowing tribes in California to offer slot machines, lottery games, banking and percentage card games on tribal lands.

The lawsuit claims that cardrooms and their partner TPPPS businesses have ignored the law and refused to recognize tribes’ exclusive rights, while “they have reaped illegal windfalls by offering games” that are barred by the state constitution and state laws.

“Plaintiffs bring this lawsuit under the recently enacted Tribal Nations Access to Justice Act to stop defendants’ exploitative abuses,” reads the lawsuit, which asks the court to declare the games illegal under state law.

According to the lawsuit, since 1872, California state law has prohibited the operation of all “banked” or “banking” games, “that is, those games in which there is a person or entity that participates in the action as the one against the many, taking on all comers, paying all winners, and collecting from all losers, doing so through a fund generally called the bank”.

In 1984, California voters amended the state constitution to enshrine California’s long-standing prohibition on banked games. The amended language states that “[t]he legislature has no power to authorize, and shall prohibit, casinos of the type currently operating in Nevada and New Jersey.”

Blackjack, baccarat, and pai gow are all traditionally and indisputably understood to be banked games, according to the tribes' lawsuit.

The complaint also describes in great detail how both table games with offer-only rules or two-hand limit rules contain no effective requirement that the player-dealer position must continuously and systematically rotate, making them indistinguishable from Nevada or New Jersey-style banked games.

Superior Court Judge Lauri Damrell has set a case conference for May 1, while also reserving June 6 for a hearing on the matter.

In a standing order issued on December 19, the court made it clear that it would not issue a preliminary injunction or a temporary restraining order to stop an increase in the number of gaming tables authorized at a cardroom establishment.