California Governor Signs Landmark Bill Reinstating Cardroom Moratorium

California Governor Gavin Newsom has signed Assembly Bill 341 into law, reinstating a moratorium on the expansion of cardrooms in the state. The new legislation prohibits the establishment of any new cardroom establishments for 20 years while allowing existing cardrooms to increase their table games gradually.

Supported by over 40 California tribes and cardrooms, this bipartisan bill reinstates provisions from the 1997 Gambling Control Act, which had previously prohibited the issuance of new cardroom licenses in California.

The new law, a rare collaboration between California Indian tribes and cardrooms, applies retroactively from January 1, effectively preventing any plans for cardroom expansion. Assemblymember James Ramos, the only Native American in the California legislature, sponsored the bill, which garnered near-unanimous support from the legislature.

The legislation aims to promote sustained growth while avoiding over-expansion. Under the measure, licensed cardrooms with fewer than 20 gambling tables can add up to 10 new tables over the next 20 years. Potentially it can pave the way to legal online casinos in California. Initially, eligible cardrooms can add up to two tables after the law takes effect, with an additional two tables allowed every four years after that.

Assembly Bill 341 received approval from the California State Assembly with a vote of 68-1 in March, followed by unanimous support from the State Senate earlier this month. Sponsors of the legislation include various tribes, such as the Cahuilla Band of Indians, Morongo Band of Mission Indians, and San Manuel Band of Mission Indians, along with prominent cardrooms such as Commerce Casino & Hotel and Hawaiian Gardens Casino.

Keith Sharp, President of the California Cardroom Alliance, expressed that the new law would provide smaller cardrooms and their communities with opportunities for gradual growth, job creation, and local economic benefits, all while avoiding saturation in the gaming market. The overwhelming support for AB 341 from state legislators, tribes, and cardrooms reflects the will of California voters, who have consistently shown support for gaming on federally recognized tribal lands while opposing the excessive expansion of gaming across the state, according to Morongo Tribal Chairman Charles Martin.

In 1998, the state began regulating the industry through the Gambling Control Act and establishing the California Gambling Control Commission and Bureau of Gambling Control. The act also implemented the initial 10-year moratorium on cardroom expansion.

Over the years, the moratorium was extended each time it reached its expiration. However, a movement emerged where small card clubs requested permission to add more table games, which faced opposition from California tribes concerned about violating their exclusivity over house-banked games.

The Senate Governmental Organization Committee, frustrated by the lack of progress in expanding small cardrooms, rejected a bill passed by the Assembly to extend the moratorium for another year. Senator Bill Dodd, committee chairman, informed stakeholders that the moratorium would be reinstated unless a compromise was reached regarding the expansion of small cardrooms. Assemblymember Ramos played a pivotal role in crafting this compromise through a workgroup involving tribal and cardroom interests.

The compromise reached by Ramos and stakeholders from both sides was considered reasonable by gaming interests in the state. The California Gaming Association (CGA), representing the majority of licensed cardrooms in California, has issued a statement commending Governor Newsom for signing Assembly Bill 341. Kyle Kirkland, President of the California Gaming Association, expressed appreciation for the leadership and support of state legislative leaders in enacting AB 341. 

Kirkland emphasized that this legislation recognizes the significance of cardrooms to local economies and communities across California, as they provide valuable employment opportunities and generate essential tax revenues for many cities. The bill allows for the expansion of tables in existing small cardrooms while reinstating a license moratorium that has contributed to industry stability over the years. James Siva, chairman of the California Nations Indian Gaming Association (CNIGA), also voiced support for the decision, acknowledging the rare alignment between cardrooms and tribes on gambling-related legislation.

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