Published in cooperation between AdventureGamers and Good Times
California’s cardrooms just can’t catch a break. The long-running battle over whether these gambling halls are operating legally has flared up again, and this time the threats are coming from multiple directions. Fresh off a court victory in October, cardroom operators now face an appeal from the state’s gaming tribes, plus a separate set of regulations being drafted by the California Department of Justice that could wipe out their bread-and-butter games.
When a Sacramento Superior Court judge threw out the tribes’ lawsuit last month, cardrooms breathed a sigh of relief, but it didn’t last long. The tribes are gearing up to appeal, and even if that doesn’t work out, the state’s regulatory proposals might accomplish the same thing: shutting down the modified blackjack and baccarat games that keep these businesses afloat.
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Workers and community advocates didn’t waste time showing their frustration. They gathered outside Attorney General Rob Bonta’s Los Angeles office to protest what they see as an attack on their jobs and their cities’ financial survival. And they’re not wrong to be worried. For smaller municipalities like Bell Gardens, Commerce, Gardena and Hawaiian Gardens, cardrooms aren’t just local businesses; they’re cash cows. State estimates say the proposed regulations could eliminate hundreds of millions of dollars in annual revenue and wipe out hundreds of jobs.
So what’s actually going on here? It all comes down to how cardrooms get around California law. Tribal casinos can offer “banked games,” where players bet against the house. That’s standard stuff: blackjack, baccarat, you name it. But state law says non-tribal facilities can’t do that. So cardrooms came up with a workaround more than a decade ago: They brought in third-party proposition players. These licensed intermediaries essentially allow players to bet against each other instead of the house. Problem solved, right? Not according to the tribes, who say this whole setup is a legal fiction designed to skirt rules that were supposed to give them exclusive rights to casino-style gaming.
Now the state’s Bureau of Gambling Control wants to crack down. The proposed rules would bar cardrooms from using terms like “blackjack” or “21” in their games. They’d also eliminate key features like “busting.” You know, the thing that actually makes blackjack blackjack. Another set of changes would require cardrooms to rotate the dealer role among players more often, which would basically kill off the third-party proposition player system entirely.
Cardroom operators call the proposed rules a looming disaster. They say the limits would wipe out their money-makers and force a full reboot of their business model. Lobbyists have warned since 2023 that the changes could gut an industry worth about $5.6 billion a year to California’s economy, by the state’s own tally. Groups like the California Gaming Association and California Cardroom Alliance have filed detailed objections with the Bureau of Gambling Control, arguing that cardrooms have long followed state-approved practices and that the new rules conflict with decades of precedent and the state’s prior reading of gaming law.
The tribes, naturally, see things completely differently. Through the California Nations Indian Gaming Association, tribal leaders are pushing for even stricter limits on cardrooms. They argue the state has been way too soft on enforcement. Under the Indian Gaming Regulatory Act, tribes have exclusive rights to Class III gaming in California, which are the casino-style, house-banked games we’re talking about. From their perspective, the cardrooms’ “alternative” versions are just smoke and mirrors, a thinly veiled attempt to muscle in on territory that’s supposed to be theirs alone.
This fight goes back decades, but it surged in 2024 when Gov. Gavin Newsom signed SB 549. The law gave tribes a one-time path to sue cardrooms in state court, something sovereignty had blocked, meant to settle what gaming is allowed off tribal land. Tribes hailed it as a long-overdue chance to protect their market. Cardrooms saw a warning: survival may hinge on politics as much as operations. City leaders reliant on cardroom taxes pushed back, fearing budget holes.
There’s also a trust problem here that goes way back. A lot of the bad blood traces to 2007, when a state regulator named Bob Lytle reinterpreted the law in a way that let cardrooms offer these non-banked versions of blackjack and baccarat. After leaving government, Lytle joined the cardroom industry, later drew sanctions, and was banned from California gaming for life, a saga tribes still cite as proof of too-close ties between cardrooms and regulators.
In October 2025, Judge Lauri Damrell threw out the tribes’ suit, saying the Indian Gaming Regulatory Act outweighs the state law that let it proceed. She noted the fight may continue. The tribes plan to appeal, and even if they fall short again, new Bureau of Gambling Control rules could still gut the cardroom model that’s kept these halls alive.
Both sides returned to court on November 14 for a case management conference, but that won’t settle things. For tribes, this is about sovereignty and funding for their communities. For cardrooms, it’s survival and thousands of jobs. Meanwhile, the state’s rulemaking grinds on, and its final shape could decide the future of cardrooms, the balance of the gaming market, and the budgets of several working-class cities.
