Legal Battle Over Card Games Could Reshape California iGaming

The tension between California’s tribal nations and cardrooms has reached a critical point. A new legal framework—Senate Bill 549—has allowed tribes to sue cardrooms and their third-party service providers, escalating a years-long battle into full-blown litigation that could redefine the state’s gaming landscape.

At the heart of the dispute is a fundamental question: are cardrooms illegally offering “house-banked” games, which California’s gaming tribes argue fall under their exclusive rights?

A Legal Door Opens

Passed in November 2023, SB 549 (Tribal Nations Access to Justice Act) was a landmark piece of legislation. It granted tribes the ability to sue cardrooms and third-party proposition player services (TPPs)—a right previously unavailable due to the sovereign legal status of tribal governments.

In January 2024, a coalition of tribes invoked the new law and filed suit against over 90 defendants, including both cardrooms and TPPs. The case, now before the Sacramento Superior Court (No. 25CV000001), will next be heard on August 8.

This legal confrontation stems from an ongoing disagreement over game formats. California tribes have held exclusive rights to offer Class III gaming—including house-banked games like blackjack and baccarat—since 2000. State law only allows cardrooms to offer non-banked, peer-to-peer games. But cardrooms have used TPPs to fill the role of the “bank,” effectively enabling house-style play without technically violating the law—until now.

The tribes argue that this workaround is a fiction. Recent complaints, including one from the Rincon Band of Luiseno Mission Indians filed April 23, claim that the TPPs function in practice as banks, violating both the state constitution and penal code.

In the Rincon filing, the tribe alleges that TPPs are not independent entities but profit directly from acting as the house, and pay cardrooms for the right to do so. This arrangement, they argue, makes the cardrooms financially dependent on the outcome of the games—blurring the line between facilitation and direct participation. “Defendants’ blackjack-style games… are consistent with the type of banked games offered in Nevada and New Jersey casinos,” the complaint asserts. “The [banking entity] is not limited to winning or losing a fixed amount, which is typical of a banked game.”

 

Cardrooms Push Back

On May 2, attorneys for Artichoke Joe’s—one of the cardrooms named in the suit—responded by challenging the legality of SB 549 itself. Their motion argues that the bill conflicts with Proposition 64, a 2004 ballot initiative requiring plaintiffs to show direct harm in order to sue.

According to the cardrooms, a tribal group in Northern California cannot claim damages from a cardroom operating hundreds of miles away. The motion further contends that any change to Prop 64’s standing requirement must be approved by voters—not the legislature—making SB 549 potentially unconstitutional.

In their filing, Artichoke Joe’s accuses the tribes of trying to “accomplish an end run” around past legislative and electoral defeats. Notably, Prop 26 in 2022 included similar litigation provisions but was soundly rejected by voters.

While the court case advances, a separate but related fight is playing out at the regulatory level. The Bureau of Gambling Control (BGC), under Attorney General Rob Bonta, has proposed new rules for blackjack-style games that would heavily restrict TPP participation and game structure.

The proposals would eliminate classic features like a 21-point target and introduce rigid rules for rotating player-dealer roles—effectively tightening the loophole that allowed TPPs to act as banks.

Public comment hearings held in May drew a strong defense of cardrooms from city officials and industry players. Many warned of dire economic consequences: in some small cities, cardrooms fund up to half of municipal budgets. A state impact report last year estimated that the proposed rules could cost the industry hundreds of millions and threaten thousands of jobs.

 

This is typical of a banked game.

What’s at Stake?

This legal and regulatory clash represents more than just a fight over card games. It’s a test of how California balances tribal sovereignty, commercial gaming interests, and municipal dependency on gambling revenue.

For tribes, this is about protecting a hard-won gaming monopoly and enforcing clear boundaries. For cardrooms, it’s a fight for survival—especially in communities where they are economic lifelines.

Both sides claim to be defending their communities. Now, it will be up to the courts and state regulators to decide whether both can continue to do so—or if one must yield.