California Tribes Prepare Appeal Of Their Suit Against Cardrooms

The appeal of the California’s gaming tribes’ suit against the state’s cardrooms inched forward this month with the Third District Court of Appeal docketing the case.

Briefs in the matter, however, will not be filed until next year, Casino Reports has learned.

Notices of appeal and notices of the filing of notices of appeal were filed the final week of November in Sacramento Superior Court. The Third District Court of Appeal in California reported receiving the notices on Dec. 4, formally paving the way for the gaming tribes to continue their legal battle with the cardrooms.

The filings offer no insight into what the tribes will be arguing on appeal. That will be revealed when briefs are filed in 2026.

Legislative fix

In early October, the cardrooms celebrated when a Sacramento Superior Court judge dismissed a tribal lawsuit challenging their right to offer versions of games like blackjack and baccarat, although the cardrooms acknowledged the win could be short lived with an appeal promised.

California’s Indian Country was given a one-time opportunity to sue the cardrooms when the legislature passed SB 549 last fall.

The bill by former state Sen. Josh Newman and signed by Gov. Gavin Newsom in September 2024 sought to settle the long-running dispute once and for all by giving California’s gaming tribes special standing in court to sue cardrooms over the games they offer.

Proposition 1A, the ballot measure approved by voters in 2000 authorizing tribal gaming in California, gives Native American casinos the exclusive right in the Golden State to offer banked games like blackjack and baccarat, where gamblers wager against the house.

State law also explicitly bans cardrooms from offering banked games in a throwback to the Gold Rush era when legislators were worried miners on the frontier would get hustled. While cardrooms evolved from saloons to glitzy casinos, they long were restricted to offering games like poker, where gamblers wager against each other.

Complex politics

In late 2007, however, an obscure state official named Bob Lytle reinterpreted state law, opening the door for cardrooms to offer variations of traditionally banked games. Today, thanks to both repeated approvals by state regulators and special licensed entities known as third-party proposition players (TPPPs) that work symbiotically with cardrooms, alternate versions of banked games like blackjack and baccarat are offered off reservation in California cardrooms.

The tribes say this blatantly flies in the face of the will of the people and they tried to stop the cardrooms in court. But judges ruled that as sovereign nations they lacked standing to bring a lawsuit. SB 549 tried to rectify that by granting the tribes special, one-time access to state court to sue over just this specific issue.

The bill’s passage was both a testament to the political power of the tribes, who stymied in dramatic fashion a well-funded attempt by major sportsbooks to legalize sports gambling in California in 2022, and state politicians’ apparent reluctance to choose a side in the dispute. Cardrooms support several communities across the state. If they lose the ability to offer their popular variations of banked games, they may go out of business, sending those communities into economic distress.

The tribes, meanwhile, are deeply skeptical of state gaming regulators, in part because immediately after Lytle offered his reinterpretation of the law he went to work for cardrooms, then got into so much trouble with state regulators he relinquished his state gaming license and agreed to a lifetime ban from California gaming activities.  There is no debate that the alternate games the tribes question have been approved by state regulators, a point that the cardrooms insist makes the whole dispute moot.

High stakes

For both parties, the fight is personal and existential. The tribes feel disrespected and believe they must defend their dominion over the California gaming market to ensure the survival of their communities. The cardrooms believe their survival is on the line, too.

Sacramento Superior Court Judge Lauri Damrell dismissed the tribes’ suit against the cardrooms, arguing that the federal Indian Gaming Regulatory Act (IGRA) preempted the intentions of the legislature and governor.

Both sides have engaged lawyers from top law firms — the tribes, Keker, Van Nest & Peters; the cardrooms, Munger, Tolles & Olson — who have expounded on esoteric legal arguments in court filings and verbal arguments delving into the intricacies of IGRA, breach of contract claims, and due process rights.

Indeed, Damrell as a judge specializes in complex civil cases, although this one is unique with dozens of deep-pocketed plaintiffs and defendants who compromise most of the major players in California’s legal gambling market.

In announcing her ruling on the case, Damrell said, “I may be wrong. And I expect there will be an appeal. And so, I welcome the guidance from the Court of Appeal on this as well and we’ll see where it goes.”