California legislature votes to give tribes their day in court

The California Senate Saturday (31 August) passed an amended version of SB 549, the bill would give the state’s tribes one chance to sue cardrooms and determine whether these venues violate state law. It will now go to Governor Gavin Newsom for final approval.

This centres around the use of third party providers acting as the bank in games such as blackjack and roulette. The case is symbolic of a wider issue of Indian rights not being respected, tribes say.

The Senate approved the amended bill on the final day of the 2024 session. The General Assembly passed it two days earlier.

The General Assembly unanimously passed the proposal, while the Senate vote was 32-2. Should Newsom sign the bill, the tribes will have one chance to sue the state’s cardrooms.

“The passage of SB 549 is fantastic news for California’s tribal nations,” California Nationas Indian Gaming Association chairman James Siva said in a press release posted on Pechanga.net Saturday.

“For over a decade, California tribes have engaged in considerable efforts to defend our exclusive gaming rights guaranteed in the California Constitution. The Tribal Nations Access to Justice Act gives tribes access to justice that has been denied not only in this case, but throughout California history.”

The tribes cannot seek monetary damages, and a lawsuit must be filed by 1 April 25.

From the bill:

This bill would authorize a California Indian tribe, under certain conditions, to bring an action solely against licensed California card clubs and third-party proposition player services providers to seek a declaration as to whether a controlled game operated by a licensed California card club and banked by a third-party proposition player services provider constitutes a banking card game that violates state law, including tribal gaming rights under the constitutional provisions described above, and to request injunctive relief.

Third-party providers changed things
California voters in 2000 gave the tribes exclusivity to Las Vegas-style gambling. Since then, tribes across the state have been able to build businesses that employ their members. The opportunity allowed many tribes to rise from poverty and become self-sufficient.

“This legislation is about doing right by California’s Indian tribes, to whom Californians made a binding commitment in 2000 by passing a proposition which explicitly gives them an exclusive right to certain games in recognition of the historical harms to which they were subject,” bill sponsor Josh Newman said via press release.

Indian Country for a decade has claimed the cardrooms’ use of third-party providers (TPPs) is a violation of state law. They also say it violates the rights granted to the tribes. The issue in question is how California’s cardrooms run their player-banked games, like blackjack or baccarat.

“We are thankful that the vast majority of the Legislature finally saw through the political noise and stood on the side of justice and access for our people.” — Viejas Chairman John Christman https://t.co/7z9q6PqMLm

— Victor Rocha (@VictorRocha1) September 1, 2024

California law only allows house-banked card games at the state’s tribal casinos. Cardrooms can offer the games, but they are supposed to be player-banked. That means those who are playing rotate who is the bank.

But in 2007, cardrooms adopted a new model, hiring TPPs to act as the bank. The TTPs stand next to the dealer, but do not participate in the card games.

California tribes fighting for more than gaming rights
Cardrooms argue that if they are forced to abandon this model, it could bankrupt them. But prior to 2007, the cardrooms operated under a different system.

Tribes say using TPPs means cardrooms are violating tribal exclusivity, and costing tribes at least $100m per year.

While the tribes have been fighting for the right to sue, the issue isn’t in a silo. They say it is one more example of how Indian Country has rights that are not honored, and that while they are sovereign, they are also often neutered.

“All too often throughout history, tribes in California were promised certain treaty rights and even large tracts of fertile land that were taken away from us,” Siva said. “In those cases, we were stripped of our ability to defend those rights as we were denied access to justice. If this bill becomes law, it will reflect a new day in California history in regard to the civil rights of this state’s tribal nations.”

Amended version allows for severability
Many of the General Assembly amendments are technical in nature, but there are some key changes to the original bill:

The bill now clearly states that the state of California is not party to any action;
Should the tribes sue and win, the court order wouldn’t take effect until “60 days following the entry of the order”; and
A severability clause was added.
This means that if one part of the law is found to be “invalid or unconstitutional” the rest would remain in force.

After year-long stall, bill started moving in June
The bill, called the “Tribal Nations Access to Justice Act,” was initially filed by Newman in February 2023. It stalled last summer in the General Assembly, before lawmakers returned to more serious consideration in June of this year.

Since then, the cardrooms have been vocal in their opposition. Labour unions and newspapers in cities with cardrooms spoke out against it, calling it “bad business” for the state.

They also say that affected cities will lose critical revenue, resulting in a reduction of services, like police and fire.

But the tribes have consistently argued that is untrue. They say they deserve a chance to argue in court for the exclusivity granted by their tribal-state compacts.

“We’re not moved by the fact that they are not going out there to innovate or find ways to make revenue,” Viejas Band of Kumeyaay Indians attorney-general Tuari Bigknife said during a podcast last week.

“The cardrooms have been in existence over 100 years, they have only been doing this illegal gaming since 2007. So there is no reason that they cannot go back to the way it was before instead of trying to do it on the backs of tribes.”