Deputy Editor
The California cardroom industry has been rocked by the confirmation that blackjack will be banned, with some of the operators warning that mass layoffs are inevitable. Early indications are that they’ll try to fight the ban in court, but even if they prevail, there will be a significant loss of business in the interim.
According to a story in the Long Beach Press-Telegram, California cardrooms say the new regulations will cost the industry about 13,000 jobs. That’s about 40% of the industry workforce, according to the California Gaming Association.
The new regulations also require that the “player dealer” role be held periodically by an actual player in the games. Standard practice for decades has been that the cardrooms employ third-party dealers known as Third-Party Proposition Player Services (TPPPPS).
Tribal casino interests have long railed against TPPPPS, saying the workaround infringes upon their exclusive rights to offer house-banked games. Now, the long battle looks likely to see yet another chapter in court, although this time, it will be the cardrooms facing off with the state rather than the tribes.
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Study From State Agency Says New Law Will Shift $232M to Tribal Casinos
A Standardized Regulatory Impact Assessment from December 2024, commissioned by the California Bureau of Gambling Control, says that cardrooms will lose approximately $464 million in annual revenue due to the nixing of TPPPPS and loss of blackjack.
The study projects that half of that — $232 million — will go to tribal casinos.
The study named the tribes as the main beneficiaries of the new regulations, a few other upsides were inferred. These include the possible invention of new games and a reduction in problem gambling.
“As mentioned in the case of Blackjack, card rooms may invent new games or variations to retain patrons,” the study reads.
PokerScout speculated on this possibility last June.
However, before that’s even a consideration, the state may have to prevail in court. California Gaming Association President Kyle Kirkland said Attorney General Rob Bonta is “pandering to the tribes.” He said the CGA will bring a lawsuit forth “in the coming weeks.”
The cardrooms have long staved off challenges to their business model from the tribes. Most recently, the state cleared the way for a one-time suit in state court, but a judge quickly dismissed it, ruling that it was a federal matter. A federal court had already ruled against the tribes.
Will California Cardrooms Refocus on Poker?
If all else fails, and the California cardrooms have to narrow the scope of their business, poker could return to the forefront.
“Poker is the only card game immune to Bonta’s rule change,” the Press-Telegram article noted.
Poker has been a part of California gambling for basically the entire history of the state itself. However, thanks to the proliferation of TPPPPS, the cardrooms were able to shift most of their business model to more lucrative games for the house.
Continued cardroom efforts to marginalize poker haven’t sat well with local players, as PokerScout detailed. Those same rooms may have to radically refocus if they don’t prevail in the fight against the new regulations.
What might that look like?
The CGA counts more than 50 active California cardrooms among its membership. These include prominent poker venues like Commerce, Bay 101, Hawaiian Gardens, and The Bicycle.
It’s possible that a pattern of consolidation may emerge similar to that seen in Las Vegas. Smaller cardrooms could be forced to fold up shop, and their customers will either stop playing or migrate to bigger rooms that can then house even more games. In Vegas, the number of poker rooms has been on a slow decline, but the ones that do operate have seen business hit record levels.
Image credit: Scott Nazelrod/Wikimedia Commons (license)
