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A coalition of card rooms and gaming associations is asking a San Francisco court to block new rules, enforceable from July, that would eliminate their most popular games. They argue that California’s Bureau of Gambling Control overstepped its authority and misread more than a century of legal precedent regarding the ability of cardrooms to offer blackjack.
The popular table game accounts for up to 60% of these establishments’ gross revenue. The industry claims that an estimated $5.6 billion in annual economic activity will be lost, and says that 20,000 jobs are under threat.
A coalition of cardrooms, third-party proposition player services (TPPPS), and the California Gaming Association filed a motion on March 30 in the San Francisco Superior Court seeking a preliminary injunction to block the regulation from taking effect while litigation plays out. The plaintiffs want Judge Christine Van Aken to freeze enforcement of the regulation pending a ruling on the merits, with a hearing scheduled for May 19.
The stakes are high, as the bureau’s own analysis projects the regulations would lead to a loss of about half of patrons who currently go to cardrooms.
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Basics of California Blackjack Ban
The regulation adds sections 2073, 2074, and 2075 to the bureau’s code. The change effectively prohibits cardrooms from offering any type of blackjack.
Section 2074 does offer five specific modifications under which a game might still get approval. Plaintiffs say that this is an “empty gesture” as these changes would disrupt the gameplay so much that the game would be “effectively inoperable.”
PokerScout previously examined what a new game created to replace blackjack might look like.
Under section 2075, cardrooms have until May 31 to submit applications to modify their games to comply. If they don’t do so, the bureau will issue a withdrawal notice on June 12, with games forced to stop on July 1 if no objection is filed or July 31 if an objection is filed and then denied. Games from modified applications need to be compliant by September 30.
The plaintiffs have three central arguments for why the judge should strike down the regulation.
First, the bureau doesn’t have the authority to ban games statewide. They claim that the California Gambling Control Commission, rather than the bureau, has the authority to restrict, limit, or regulate gaming activity across the state, and only after a full proceeding and finding that a game violates state, federal, or local law.
The bureau’s role, the complaint contends, consists of vetting license applicants, monitoring licensees, investigating illegal activity, and approving individual game applications.
The plaintiffs agree that the bureau can place restrictions on a game when it approves an individual application, but this doesn’t extend to legislating a statewide ban. They say that the agency can apply the law but not change it. They contend that in its 28-year history, the bureau has never before tried to enact such sweeping gaming restrictions.
Second, the bureau can’t single-handedly revoke existing game approvals. Even if it did have authority over new game applications, the plaintiffs argue that it can’t unilaterally revoke games that already got approval.
It would instead have to file an accusation with the Commission, which would act as a neutral adjudicator. The plaintiffs also raise a due process claim, as both the California and U.S. Constitutions say that a vested issue permit, such as game approval, can’t be revoked without notice, a hearing, and evidence before a neutral decision maker.
California Attorney General Rob Bonta simply announced the new rules. Cardrooms maintain they were denied any opportunity to engage.
Are Blackjack and 21 the Same?
Finally, the third argument is against the legal premise of the regulation. The bureau bases its ruling on its claim that blackjack-style games are actually illegal games of “21,” banned since 1885 in California.
Plaintiffs say that this doesn’t extend to games that have evolved while still sharing some similar features. The historical game of 21 was different. Among other edges, the dealers, after looking at the first card, could force players to double their bets. Dealers could also play their hands in the same manner as the players, deciding to hit, stand, or split.
It all added up to a monster edge, reported as almost 42%. Playing with sound strategy in modern blackjack places the house edge between 0.5% and 1%.
California courts have repeatedly held that variants that have “evolved since 1885” have more than slight differences from the historical game.
California Blackjack Ban Could Cause Irreparable Harm
The plaintiffs claim that some cardrooms would not survive long enough for litigation to be resolved unless there’s an injunction. Several declarations in the motion describe businesses projecting closure within 30 to 90 days of enforcement. Others may survive but face immediate mass layoffs.
One group of Parkwest casinos estimates that at least 849 people would lose their jobs. They said that trying to rebuild these specialized workforces would be difficult. TPPPS, whose business model depends on volume play at blackjack tables, face similar threats.
As well as the job losses, communities face significant drops in their tax revenue. Nine municipalities filed declarations of support for the motion. In some cities, like Bell Gardens and Hawaiian Gardens, cardroom tax revenue accounts for more than half of their general fund. Some have already declared fiscal emergencies in anticipation of the regulation coming into effect.
The plaintiffs claim that even if they got a desirable ruling, the harms wouldn’t be remedied, as customers who leave for tribal casinos or underground gambling dens may not return. The state’s sovereign immunity would also bar any monetary damages claim, leaving permanent harm without any financial remedy.
Taken together, the plaintiffs argue that the bureau will suffer no cognizable harm from a preliminary injunction, as it has approved the games it now wants to ban for decades.
What California Cardroom Litigation Means for Poker
For poker players, the outcome of this case is worth close attention.
It might be tempting to think that a blackjack ban could be a silver lining for the poker community. If cardrooms can no longer fill seats with blackjack players, perhaps they redouble their attention on poker. They might spread more tables, run bigger tournaments, and compete harder for the players they have left.
Poker, after all, is the bedrock of California cardrooms. It’s explicitly legal, has never been entangled in the 21 debate, and has a loyal base of dedicated players.
However, that optimistic scenario looks unlikely in practice. The financial reality described in the motion suggests a much grimmer outcome. Blackjack is the core revenue stream for many of these cardrooms. At some establishments, blackjack-style games account for 60% or more of gross revenues, and up to 70% of patrons play them exclusively. Those patrons aren’t poker players looking for an alternative game.
Many will head to tribal casinos, which have house-banked blackjack readily available. Research cited in the motion suggests more than half of departing patrons never return after just three months away.
Without that revenue, cardrooms can’t sustain their operations, let alone invest in poker. The declarations filed with the motion describe businesses that would close within weeks of enforcement, not pivot to a new game mix. If that happens at scale, California’s cardroom poker scene would likely shrink along with everything else. Fewer venues, fewer tables, fewer games, and less poker overall.
The injunction hearing on May 19 will be the first major test of whether that future can be avoided. If the court grants the injunction, the industry lives to fight another day, and poker continues largely as it is. If not, the question for poker players won’t be whether their local cardroom is spreading more tables. It’ll be whether it’s still open at all.
Image credit: Hiya111/Wikimedia Commons (license)
