Judge strikes down proposed CA card room regulations, rules Bonta lacked authority
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- A Superior Court judge ruled Tuesday that Bonta lacked authority to impose cardroom rules.
- The judge’s decision will nullify Bonta’s restrictions unless he appeals.
- Stakeholders argued the regulations would cost over 30,000 jobs and $600 million.
A San Francisco judge ruled Tuesday that Attorney General Rob Bonta lacks the authority to impose proposed regulations on California card rooms, handing the industry a significant legal victory and keeping the games available.
Superior Court Judge Richard Darwin ruled that the state Department of Justice’s Bureau of Gambling Control lacked the authority to impose statewide restrictions on the games through regulation, finding that such policy decisions rest with the Legislature.
For years, card rooms — gambling establishments licensed by the state — have used third-party proposition players employed by outside companies and offered games such as “California Blackjack” and “Blackjack 21.5” that are similar to traditional blackjack. California’s tribal casinos, which have exclusive rights to offer banked card games, have argued those games violate state law.
Bonta proposed statewide restrictions on games using third-party proposition players, also known as player-dealers, as well as blackjack and other banked games, in which players wager against the house. The Office of Administrative Law approved the regulations, which were scheduled to take effect April 1.
The California Gaming Association, backed by the California Cardroom Alliance and Communities for California Cardrooms, filed lawsuits in early March seeking to block the regulations and have them declared unlawful.
“We are disappointed in today’s ruling but are reviewing our options and will respond appropriately,” a spokesperson for the Bureau of Gambling Control said Tuesday evening.
Card room operators and several local governments argued the regulations would jeopardize more than 30,000 jobs and reduce tax revenue that helps fund city services in communities where card rooms operate.
An outside economic analysis prepared for the Department of Justice estimated Bonta’s proposed regulations would have an economic impact of about $600 million over the first decade after taking effect.
Darwin issued a preliminary injunction on May 21 blocking enforcement of the regulations while the case proceeded. In Tuesday’s decision, according to the California Gaming Association, Darwin decided that the Bureau of Gambling Control’s role is to enforce California’s gaming laws, not rewrite them through regulation.
Heather Guerena, vice president and general counsel for Stones Gambling Hall in Citrus Heights, said third-party proposition player games account for approximately 70% of the casino’s revenue. Eliminating those games would force Stones to lay off between one-third and one-half of its employees, she said.
“It was a relief for us to have the judge interpret the law correctly and find that the department did not have the authority to issue these regulations,” Guerena said.
Tuesday’s ruling means the regulations cannot take effect unless the decision is overturned on appeal. Darwin issued the ruling from the bench and is expected to issue a written order after a hearing next week.
“The court’s ruling is a lifeline for communities across California,” California Gaming Association President Kyle Kirkland said in a statement. “If these regulations had been allowed to stand, the consequences would have been devastating for working families, local businesses, and the cities that rely on card room revenues to fund police, parks, libraries, youth programs, and other essential services.”