California Bureau of Gambling Control Stops Accepting Card Room Applications

California Bureau of Gambling Control Stops Accepting Card Room Applications After California Tribes Claim Illegal Operating of House Backed Games

On Friday, February 19, California Indian tribes won a small legal victory against the card room industry. The California Bureau of Gambling Control (an office overseen by the California Attorney General) has ceased receiving applications to open new card rooms without assurances of “continuous and systematic rotation” of those acting as players and dealers, according to the chief of the bureau, Wayne Quint. Existing card rooms established under the bureau’s previous policy will not be affected.

In a letter written to California Attorney General Kamala Harris, Quint stated that “‘Banking games’ are specifically prohibited by Penal Code section 330.” “Banking games” are defined differently from “California Games,” the key difference being said rotation. The game setup must give each player at the table a chance to act as dealer (i.e. “the house shall not occupy the player-dealer position”), affording the player-dealer the ability “to win or lose only a fixed and limited wager during the play of the game, and preclude the house, another entity, a player, or an observer from maintaining or operating the bank during the course of the game.

The conflict between the tribes and card rooms has persisted for four long years. Tribes do not like the competition that card rooms present to what has traditionally been a constitution based monopoly on any gambling practice with casino characteristics, and contend that many card rooms’ existence breaks state gambling laws.

Quint’s letter supersedes a stance taken by a previous chief of the California Bureau of Gambling Control, Robert Lytle. Only a few weeks after giving his opinion, Lytle left his position to enter the card room industry. Attorney General Harris sought to suspend Lytle’s licenses in May 2013.

On June 30, Quint’s office will “issue a notification of the revised enforcement and game approval practice relating to the rotation of the player-dealer in a controlled game,” according to the letter.

The chairperson of the Yocha Dehe Wintum Nation, Leland Kinter, informed a committee of the California Assembly that “Card rooms no longer rotate the bank in the playing of their games and allow so-called third-party proposition players, essentially a partner of the card rooms, to maintain that bank.”

“This practice directly violates the California constitution and penal code and the tribal exclusivity granted to the tribes by California voters,” he said.

The California card room owners have fought back, claiming their $1 billion industry does not operate illegally. “The tribal community has very strong feelings about the issues,” said the California Gaming Association’s president, Kyle Kirkland. “The card rooms feel very strongly about our position… we feel like we operate lawfully.”