Attorney general’s cardroom regulations threaten jobs, city tax revenue | Opinion

Attorney General Rob Bonta has wrongfully banned blackjack-style games and other popular table games in cardrooms throughout California, threatening the livelihoods of 30,000 workers and gutting tax revenue for cities that depend on cardroom revenue to fund essential services.

Bonta is wrong on the law, and the gaming industry has no choice but to fight these misguided regulations.

The new regulations, which took effect on April 1, do two things: They outlaw blackjack-style games that California cardrooms have offered legally for decades, and they severely restrict “player-dealer games,” a format unique to cardrooms in which players always wager against each other rather than against a “house.”

Cardrooms that fail to submit modifications to their game rules will be forced to stop offering these games entirely by July 1 — games that are central to our businesses and the primary reason customers walk through our doors.

Despite overwhelming opposition from numerous cities, labor unions, cardrooms and advocacy groups, Bonta pressed ahead. The California Gaming Association, the statewide trade group that represents California cardrooms, has since sued Bonta over the faulty premise, process and substance of the regulations.

These restrictions are not a clarification of existing law, they are a reversal of it. Cardrooms have offered the specific types of games targeted by these regulations under their current rules for decades, with express approval from local municipalities and multiple prior California attorneys general, as well as licenses from state regulators.

The human cost of the new and unnecessary regulations is staggering: By Bonta’s own economic assessment, the regulations will eliminate more than half of all cardroom revenue in California. The California Gaming Association believes this understates the impact, and cardrooms across the state will be forced to dramatically downsize their operations or close entirely.

In Los Angeles County alone, more than 10,000 living-wage jobs are at risk.

In a few communities, cardroom taxes account for over half of the revenue in the city’s operating fund. Now, those cities face possible cuts to police and fire, parks, senior programs and other essential city services.

This didn’t have to happen: Workers, city officials, union members, and business owners explained the problems with these regulations during the rulemaking process — submitting 1,764 public comments in opposition to the new rules. Yet Bonta’s office declined to make a single substantive change. It identified no actual public safety threat that these regulations were intended to address and held no meaningful dialogue with the communities that would be destroyed.

So, who benefits from this heavy-handed government? Follow the money. Over the past decade, tribes have spent enormous sums lobbying Sacramento to eliminate non-tribal gaming competition, yet have been repeatedly blocked in court and the ballot box from expanding their untaxed windfall at the expense of cardrooms.

Their relentless investment now appears to have paid off handsomely. Bonta has received substantial donations from casino tribes.

California’s tribal casinos generate over $12 billion in gambling revenues annually and pay no state and local taxes. In contrast, cardrooms bring in $1.4 billion dollars in annual gaming revenue, all of which is subject to federal, state and local taxes. Since only tribal casinos and cardrooms offer variations of the games under review, the new regulations will transfer market share and revenue from the smaller tax paying cardroom operators to non-taxpaying, wealthy tribes.

This isn’t regulation — it is pay for play dressed up in bureaucratic language, with detrimental effects on thousands of working California families.

Kyle Kirkland is president of the California Gaming Association.