In January 2025, seven Native American tribes in California filed a lawsuit against numerous card rooms, arguing that these establishments are illegally offering banked card games like blackjack and baccarat. The tribes claim this violates their exclusive gaming rights under state law, sparking yet another legal battle over gambling regulations in California.
The dispute revolves around how these games operate. Typically, in banked games, the casino itself takes on the role of the house, covering bets and payouts. However, some card rooms employ third-party proposition player services (TPPPs) to act as the bank, which the tribes argue is an exploitation of a legal loophole. These regulatory debates have become more relevant in the broader gambling industry, particularly with the rise of online gaming platforms.
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The lawsuit, filed in Sacramento’s Superior Court, names 96 defendants, including card rooms and TPPPs, accusing them of operating illegal games. Adam Lauridsen, lead counsel for the tribes, insists the goal is not to shut down card rooms but to enforce the law, stating, “They can offer legal games… we just want them to follow the rules.”
Financially, the stakes are high for both sides. Tribal casinos generate billions in annual revenue, helping fund essential services in their communities, including healthcare, education, and housing. Card rooms, on the other hand, also contribute significantly to local economies.
The Gardens Casino alone provides around 1,800 jobs, and its tax revenue makes up 75% of Hawaiian Gardens’ general fund. If card rooms are forced to stop offering banked games, it could lead to job losses, decreased public funding, and even the closure of some establishments.
Beyond Hawaiian Gardens, other cities, including Bell Gardens, Commerce, and San Jose, also rely heavily on card rooms for revenue. The California Gaming Association, which represents card rooms, has argued that the lawsuit threatens the financial stability of dozens of communities statewide. They maintain that the use of TPPPs has been a long-standing and legally compliant business model, subject to regular audits by state regulators.
The legal arguments hinge on the interpretation of California’s gambling laws. The tribes cite the 2000 constitutional amendment that granted them exclusivity over certain Class III games, including banked card games. They argue that card rooms, by using third-party players to act as the house, are violating this exclusivity. Card rooms counter that the law applies only to games directly run by casinos themselves, not independent entities like TPPPs.
If the court rules in favor of the tribes, it could force card rooms to eliminate banked games, reinforcing tribal exclusivity. However, it’s also possible that lawmakers could step in to modify gaming regulations to clarify the legal status of TPPPs.
The case is being closely watched by both the gaming industry and local governments. Whether the ruling favors the tribes or the card rooms, it is set to reshape California’s gambling landscape, influencing not just current casino operations but also the future of gambling laws in the state.
