Three of California’s lucrative American Indian casino tribes filed a federal lawsuit against the state claiming it has breached tribal-state compacts and violated state laws and a constitutional amendment granting tribes exclusive right to operate house-banked card games.
The lawsuit, filed Thursday in the Ninth Circuit U.S. District Court, alleges that Governor Jerry Brown and state regulators have been “complicit … and at times even encouraging” unlawful conduct by cardrooms in the playing of banked games such as blackjack. Brown leaves office Monday.
The 38-page complaint and 114 pages of attachments filed by the Yocha Dehe Wintun Nation and the Viejas and Sycuan Bands of Kumeyaay Indians seeks “an injunction directing the state to enforce its laws prohibiting the play in cardrooms of banking card games and twenty-one.”
The legal action culminates a nearly seven-year dispute between tribes, cardrooms and state regulators over the play of card games banked by third-party proposition players, or TPPPs.
Two other casino tribes – the Rincon Band of Luiseño Indians and Santa Ynez Band of Chumash Indians – in November filed a lawsuit in San Diego County Superior Court alleging cardrooms and player-banking firms are violating state law.
Sixty-three California tribes operate casinos in accordance with tribal-state regulatory agreements, or compacts, the first of which were enacted with passage of Proposition IA in 2000. Prop 1A is an amendment to the state constitution giving tribes exclusive right to operate banking and percentage games.
“State law, the constitution and our compacts are all very clear about our exclusive right to operate house-banked, casino-style card games,” Yocha Dehe Chairman Anthony Roberts said of last week’s federal litigation.
“We did not want to file this suit, but cardrooms continue to play and brazenly advertise these games, even though it’s patently illegal for them to do so.
“We are asking the state to simply do its job and enforce the gaming laws and rules California’s voters and state Legislature have put in place.”
Cardroom operators contend they are operating games in accordance with state laws and game rules and regulations approved by the Bureau of Gambling Control, a division of the state Department of Justice under Attorney General Xavier Becerra.
But Stephanie Shimazu, director of the Bureau of Gambling Control (BGC), said in a Sept. 25 memo that her office “plans to rescind game rules approvals for games too similar to 21/blackjack that are prohibited by state law.”
Shimazu said the bureau also will “promulgate regulations to address rotation of the player- dealer” and examine cardroom contracts with TPPP firms hired to bank the games.
The bureau serves as the law enforcement arm of a bifurcated regulatory system with a policy-making Gambling Control Commission under the governor. California has the only politically bifurcated gambling regulatory system in the country.
Tribal regulators have held several meetings with the bureau and the commission in an effort to get gambling regulations in compliance with state penal and business codes dealing with prohibited games, rotation of the player-dealer position and use of TPPPs.
“Since 2012, we have sought resolution through the agencies and individuals responsible for enforcing these laws and preventing illegal gambling activity in California,” Viejas Chairman John Christman said.
“Going to court is regrettably our last recourse, only because of the state’s continued inaction against such blatant illegal activity. If California enforced its current laws, we would not have filed this lawsuit.”
Austin Lee, executive director of Communities for California Cardrooms, warned that Shimazu’s game rules crackdown could cripple a card room industry that employs more than 20,000 workers and generates up to $300 million in federal, state and local taxes.
“It would require cardrooms to significantly adjust operations,” he said.
