The future of California’s card room industry is increasingly uncertain after state regulators approved two significant sets of rule changes that will reshape blackjack-style games and tighten restrictions on the use of third-party proposition players.

The California Office of Administrative Law (OAL) last week approved the regulations, which will take effect 1 April. Card rooms will have until 31 May to submit compliance plans, according to a state news release. The changes mark one of the most consequential regulatory shifts for the sector in decades and come amid a long-running dispute between commercial card rooms and tribal gaming operators.

Major Changes to Player-Dealer Model

Central to the new rules are revisions to the use of third-party providers of proposition players (TPPPs), contractors that facilitate the rotation of the player-dealer role in card rooms. Under California law, card rooms may only offer peer-to-peer games and cannot operate house-banked casino-style games, which are reserved exclusively for tribes under Proposition 1A, passed in 2000.

The new regulations require that:

• The player-dealer must be seated at the table at all times and the role must be offered to all players before every hand, with the offer visible to surveillance cameras.
• Each table must post a notice informing players that any player can assume the player-dealer position and cannot win or lose more than the amount wagered.
• The player-dealer role must rotate to at least two players other than the TPPP every 40 minutes or the game must end.
• If a TPPP is serving as player-dealer, the next rotation must go to another player.
  TPPPs may accept and settle wagers only when acting as player-dealer.
• Only one TPPP is permitted per table.

Tribal leaders have long argued that TPPPs effectively allow card rooms to mimic house-banked games, infringing on tribal exclusivity. Card rooms counter that TPPPs are legally licensed and necessary to facilitate gameplay, as most patrons lack the desire or bankroll to act as the dealer. The second set of regulations significantly alters blackjack-style games, a staple offering at many card rooms and a major source of revenue for host cities.

Under the new rules:

• Games may no longer include a “bust” feature in which a hand automatically loses if it exceeds 21.
• Wins and losses must be determined solely by whose total is closer to a target point count.
• The target point may not be 21.
• A tie, or “push,” will now result in a win for the player.
• Games may not use the words “21” or “blackjack.”

The removal of the traditional 21 target and automatic bust feature effectively transforms the structure of blackjack-style games, aligning them more clearly with peer-to-peer requirements.

At a protest outside Attorney General Rob Bonta’s Los Angeles office in October, card room employees and local officials warned of economic fallout. Compton Mayor Emma Sharif said cities across Los Angeles County depend on blackjack-style revenue “to survive.” “For me, I cannot handle that,” Nary Chin, a dealer at Gardens Casino, said at the event. “Without our card room, I don’t think I would be here today.”

The rulemaking process began informally in 2023 and intensified throughout 2024. Two public hearings were held last May, generating a combined 1,764 public comments. The California Department of Justice (DOJ) said the feedback did not result in substantive changes. “After careful review and consideration of the comments, DOJ did not make any substantive changes to the proposed regulations,” the agency said in a release.

The OAL approved the rules without additional comment or hearings. The Attorney General’s Office referred inquiries to its public statement. The California Gaming Association (CGA), which represents card rooms, characterized the changes as politically motivated and legally unnecessary.

“The Bureau of Gambling Control advanced the regulations without any showing of legal necessity, or any public harm or safety risk caused by these popular games,” the association said in a statement, arguing that the bureau failed to provide adequate notice or meaningful public engagement.

CGA President Kyle Kirkland told CBS Sacramento the rules represent a “dramatic, hard, 180-degree pivot” in how the law is interpreted and described them as “devastating.” He indicated some form of legal challenge is likely before the April implementation date.

Tribes Applaud Clarification of Law

Tribal organizations welcomed the approvals. The California Nations Indian Gaming Association (CNIGA) called the move “an important step” toward protecting tribal sovereignty. “The regulations further clarify that games and practices employed by commercial card rooms are indeed prohibited under California law,” CNIGA Chairman James Siva said in a statement. “Running a business contrary to that law is an illicit business, period.” The Bureau of Gambling Control said the changes are intended to ensure compliance with Penal Code section 330 and the state Constitution, and to protect public health, safety and welfare.

The dispute between tribes and card rooms dates back to Proposition 1A, which granted tribes exclusive rights to operate Class III, house-banked casino games in California. Tribal casinos generated more than $12 billion in gross gaming revenue in fiscal year 2024, while prior studies estimate the economic impact of card rooms at roughly half that level.

Over time, card rooms adapted by introducing blackjack-style variants and partnering with TPPPs to maintain viable gameplay within peer-to-peer constraints. The concept of TPPPs has been controversial since its inception in the late 2000s, and tribes have repeatedly sought to curtail their use.

In 2024, lawmakers passed SB 549, creating a one-time opportunity for tribes to sue card rooms over alleged violations. A lawsuit filed in January 2025 was dismissed by Sacramento County Superior Court but is currently on appeal. The newly approved regulations, which mirror many tribal arguments, could achieve similar outcomes through administrative rulemaking.

California card rooms must comply with new blackjack-style game and player-dealer regulations by April 1, 2026, with compliance plans due by May 31, 2026.

Broader Enforcement Context

The rule changes are part of a broader pattern of enforcement actions by Attorney General Bonta’s office affecting sectors that have clashed with tribal interests. In recent months, the DOJ seized wagering machines from Santa Anita Park, issued a legal opinion declaring daily fantasy sports illegal and supported legislation banning sweepstakes sites.

For both tribal casinos and card rooms, gaming revenue is a primary economic driver and critical source of public funding for local governments and tribal communities. As the April 1 implementation date approaches, the regulatory overhaul may reshape the balance of California’s gaming landscape — and determine whether card rooms can sustain their current business models under tighter legal constraints.