California Cardrooms Get Preliminary Injunction Against New Regulations

A San Francisco Superior Court judge granted a preliminary injunction Thursday to temporarily pause enforcement of new California regulations that would limit the ability of cardrooms to offer popular table games while a legal challenge proceeds.

California Attorney General Rob Bonta announced the new regulations in early February after years of the state’s gaming tribes complaining that the cardrooms’ most popular games violate a law that grants them the exclusive right to offer banked games in which players bet against the house.

In early March, a group of cardrooms and third-party proposition players (TPPPs) filed two lawsuits challenging the new regulations issued by the California Department of Justice’s Bureau of Gaming Control. A month later they requested a preliminary injunction on the matters, which have been consolidated.

In granting the preliminary injunction, Judge Richard Darwin ruled that the bureau likely exceeded its authority in adopting the new regulations, finding clear and convincing evidence that the rules would irreparably harm cardrooms and the communities where they’re based.

Projected losses

The regulations would limit the type of blackjack-style games cardrooms may offer and amend the operations of the TPPPs, which are special, licensed businesses that help cardrooms offer alternate versions of games that traditionally pit gamblers against the house, otherwise known as banked games.

California cardrooms and the cities that depend on them for revenue say the regulations, which went into effect on April 1 but weren’t set to be enforced until May 31, threaten to devastate them.

The cities of Commerce and Bell Gardens, for example, declared fiscal emergencies and put a ¼-cent sales tax on the June 2026 ballot in response to the cardroom regulations. Those two cities are located in Los Angeles County and are home to two of the state’s three largest cardrooms, Commerce Casino and Parkwest Bicycle Casino.

The state’s own economic assessment of the regulations found that they could result in the loss of hundreds of millions of dollars in revenue for cities as well as hundreds of jobs in California’s cardroom/TPPP sector.

“Today’s ruling validates what we have said all along: Attorney General Bonta and the Bureau of Gambling Control exceeded their authority by attempting to rewrite California gaming law,” said Kyle Kirkland, president of the California Gaming Association, in a prepared statement. “These regulations were driven by pressure from powerful tribal gaming interests that have long sought to eliminate lawful competition from California’s cardrooms.

“Cardrooms have lawfully operated the games targeted by these regulations for decades. Our games support thousands of middle-class jobs and generate critical revenue for communities across California.”

Competing laws

State law 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.

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 the TPPP 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, pointing to Proposition 1A, the ballot measure approved by voters in 2000, which authorized tribal gaming in California.

Proposition 1A 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. Tribes tried to stop cardrooms from offering versions of banked games in court, but judges ruled that as sovereign nations they lacked standing to bring a lawsuit in state court. 

SB 549, sponsored by former state Sen. Josh Newman and signed by Gov. Gavin Newsom in September 2024, sought to settle the matter once and for all by giving California’s gaming tribes special standing in court to sue cardrooms over the games they offer.

The tribes filed suit as soon as they could in early 2025. But in October 2025, Sacramento Superior Court Judge Lauri Damrell dismissed the case, arguing that the federal Indian Gaming Regulatory Act (IGRA) preempted the intention of the legislature and governor. At the time, she acknowledged her ruling “may be wrong,” reflecting the maddening complexity of the legal issues involved.

From the moment Damrell announced her decision, the tribes were expected to appeal. That filing is still pending as lawyers await the release of a briefing schedule by the Third District Court of Appeals in California.

Two regulations

While SB 549 was winding its way through the California Legislature, the state’s attorney general, Bonta, was working on the two cardroom regulations.

The bureau originally posted the proposed regulations in February 2025, withdrew them, then reposted them on April 11, 2025, starting the clock on the formal rulemaking process after a lengthy discussion when the proposals were in the draft phase two years prior. The bureau held hearings on the two proposed regulations in late May, when it also closed the window for receiving written comments on the plans.

One of the new regulations removes busting from blackjack-style games. In fact, that regulation bars cardrooms from offering any blackjack-style game where the target points equal 21. Under the new rules, cardroom games can’t include the words “21” or “blackjack” in their names.

The other new regulation, regarding TPPPs, calls for the role of the house or bank to be offered to every player at a quasi-banked table game before every hand and stipulates that “[t]he player-dealer position shall rotate to at least two players other than the TPPPs every 40 minutes or the game shall end.”

TPPP workers wear badges to distinguish themselves from cardroom employees and park themselves at banked games within the cardrooms. Every hand, the dealer, a cardroom employee, offers players the opportunity to serve as the house.  Most cardroom players don’t have the funds to cover that kind of action and decline. But the TPPP workers are funded by their employers and stationed at the banked games specifically for that task.

The TPPP workers volunteer to cover the action over and over again and the cardrooms are allowed to offer banked games they otherwise couldn’t.

Under state law, TPPPs are supposed to be financially independent from the cardrooms in which they operate to avoid the cardrooms having a stake in wagering. Some cardroom owners, however, also have stakes in TPPPs.

Tribal arguments

That’s within the law, so long as the TPPP operates in a different cardroom, not the one with a common owner. But it’s a point of contention for the tribes, which sought to intervene in the cardrooms’ challenge of the regulations. That request was denied, but the tribes were allowed to file an amicus brief.  

In their brief, filed May 11, the tribes argued against the preliminary injunction, writing, “California Attorney General Rob Bonta, building on the efforts of the prior two California Attorneys General, recognized the illegality of Petitioners’ banked games and recently issued regulations to curb some of Petitioners’ most flagrant violations of California law.”

It said the tribes “have long suffered substantial harm due to California cardrooms’ encroachment on their exclusive right to operate banked games. As tribal governments lack a tax base to fund programs and help their people, revenues from lawful banked games in tribal casinos contribute significantly to the education, social services, and healthcare of tribal citizens and their families, as well as benefiting neighboring communities — all of whom will continue to suffer if the Regulation is enjoined and Petitioners’ violation of the law continues unabated.”

Parties to the case have until Tuesday to submit proposed or competing orders on the granted motion for preliminary injunction. The next hearing on the case is scheduled for June 30.