The California Nations Indian Gaming Association (CNIGA) has criticised language legalizing player-banked games at the state’s cardrooms in the sports betting bill put forward by Assemblymember Adam Gray and Senator James Dodd.
SCA 6 began as a short proposal to put the legalization of sports betting to California’s citizens first filed in June 2019, before being fleshed out into a full regulatory framework last week.
The bill, for which a companion proposal (ACA 16) has been filed in the Assembly by Gray, appears heavily weighted in tribal gaming operators’ favor by limiting legal betting to tribal casinos and racetracks, blocking cardrooms from the vertical.
Both entities would be able to offer online betting, which would be subject to a 15% gross revenue tax, and retail, which will be taxed at 10%. Online operators would also be expected to pay an initial $5m license fee, plus an annual renewal fee of $1m.
While cardrooms are effectively shut out of legal betting by SCA 6 and ACA 16, the bills also aim to amend the California constitution to recognize the authority of card rooms’ right to offer player-dealer games. This sees a player employed by the venue to collect losses and rake, and pay out winnings. The role is ‘offered’ to the other players every 60 minutes.
It effectively means patrons are playing a peer-to-peer game, albeit one that feels like a traditional table game. Player-banked games have long been a point of contention for tribal operators, which feel their sovereign right to offer games such as blackjack and baccarat are being infringed upon.
CNIGA chair James Silva described this provision as allowing for “a massive expansion of games” offered by the cardrooms, that “fundamentally changes the legal structure of California’s peer-to-peer gaming industry”.
“While we appreciate Senator Dodd’s attempt to address sports wagering, we are vehemently opposed to including an expansion of gaming to a segment of the gaming industry that has proved, for decades, to be unwilling to follow the rules and regulations that guarantee a fair and safe gambling environment, and that comply with federal laws designed to stop money laundering,” Silva explained.
He called on Dodd to remove the player-banked game components “until [the cardroom] industry exhibits consistent behavior that proves that they are both willing and able to operate within the confines of the laws and regulations that currently exist”.
Silva acknowledged California is looking to raise additional revenue to mitigate the economic impact of the novel coronavirus (Covid-19) pandemic. However, he added, the measures set out in SCA 6 would only be implemented long after Covid-19’s effects had subsided.
“Tribal governmental budgets have also seen extraordinary losses due to the closure of our casinos that provide the majority of governmental revenue amid the COVID-19 pandemic,” he said. “However, we must not ignore one disaster in order to remedy another. We must move carefully and thoughtfully.
“As valued partners with the state of California, our tribal governments would welcome the opportunity to provide input on a significant proposed change in the gambling policy of California, and look forward to more open and meaningful discussions.”
The California Gaming Association, the cardroom industry body, has been contacted for comment on Gray and Dodd’s proposal.
SCA 6 has been allocated to the Senate Committee on Governmental Organisation, while ACA 16 is yet to be assigned to a committee. Should the measure be passed by both chambers of the California legislature, a question on sports betting would then be added to the November 2020 ballot alongside the presidential election, requiring a two-thirds majority to become law.