California’s ‘blackjack ban’ in card houses could jeopardize ‘thousands of working families’ and cost millions, experts warn

The new regulations go into effect in April

California’s card rooms may be folding in the wake of a new regulation banning blackjack from their tables.

California's Office of Administrative Law is moving forward with rules that will end blackjack at card rooms beginning in April.

Gambling is largely illegal in California. Per state law, only Native American tribal groups can operate Class III casino games, like slot machines and "banked" table game like blackjack, baccarat, and some forms of poker.

Card room operators relied on a loophole in the state's gaming agreement with Tribal casinos to play games like blackjack without a "house" dealer. The passage of the new law in April will make it impossible for card rooms to run blackjack games or to effectively employ contracted "third-party player-dealers.”

Some industry leaders are warning that the new regulations will not only hobble the popular card rooms, but also take a serious bite out of city coffers as the tax revenue from the gaming halls dries up.

Beginning in April, California card rooms will no longer be able to offer blackjack or third-party dedicated ‘player-dealers,’ which some critics say will destroy the card room industry (Getty Images)

What are card rooms?

In simplest terms, card rooms are establishments where players play card games against each other, rather than against the operators of the facility — often colloquially called "the house."

Card rooms have existed in the state since at least the gold rush, and became popular replacements for proper casinos when gambling in "banked" games — games where the house has a stake in the outcome — was banned in 1872.

Typically a dealer is the representative of the house in a casino game. In some games — like blackjack — rather than competing against each other, the players all compete against the dealer.

Card rooms continued to operate and saw a spike in popularity during the 1980s after a struggling California card room operator created Pai Gow poker, but their existence was formally challenged in 1999 after the state agreed to give Tribal casinos the exclusive rights to operate banked gambling in the state.

Tribal casinos vs private card rooms

Tribal casinos operate beyond the regulatory arm of California's gaming commission, as they exist on sovereign tribal land, not state-controlled land. Operators of tribal casinos have argued for decades that California's card rooms were actually violating the state's gambling laws through a loophole.

Card rooms do not and cannot, by law, have dealers who play games on behalf of the house. The duty of playing as the dealer falls to players.

The regulatory language left enough room for a new gambling-adjacent industry to grow, and agencies known as 'Third-Party Providers of Proposition Player Services" (TPPPS) sprouted. These agencies employ players who go into card rooms specifically to act as the "banker" or the "player-dealer."

"Under California law, cardrooms offer all players the opportunity to be the 'player-dealer' and wager on the dealer’s position or hand – playing against the other players, collecting losing wagers and paying winning wagers to the extent of the player-dealer wager," the California Cardroom Alliance says on its website.

Until now, the California Bureau of Gambling Control has accepted the player-dealer agencies and attorneys representing card rooms have insisted the practice is "completely legal."

The Pechanga Resort & Casino in Temecula, California is the largest Native American tribal casino in the state. New gaming regulations in California will end a decades-long battle between tribal casinos and card rooms by prohibiting games like blackjack from being played in private card rooms across the state (Google Maps)

Rick Trachok, a gaming law expert and former UC Berkeley School of Law lecturer, spoke to the Los Angeles Times' Iris Kwok and described the use of 'player-dealers' as a a “transparent attempt to get around the constitution,” which expressly prohibits Nevada-style casinos.

The California Gaming Association, which represents the card rooms, has argued that the massive overhaul to its industry is being forced through the state attorney general's office without there being any evidence that previous practices caused harm.

“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, which have been approved by AG [Robert] Bonta’s predecessors and offered in cardrooms for decades,” the association said in a statement. “More still, the Bureau failed to provide proper notice of the regulatory changes or meaningfully engage with the public as required by law.”

New game, new rules

Up until 2024, tribal casinos could not legally sue the card rooms because they are sovereign governments, not entities controlled or regulated by the state. Last fall, Governor Gavin Newsom signed Senate Bill 549 into law, granting power to casino-owning tribes to sue their business competitors.

The changes coming in April have specific language banning specifically targeting blackjack, including a prohibition on card room games that incorporate almost all of blackjack's rules.

The new regulations will also make it impossible for third-party contracted "player-dealers" to become defacto permanent dealers during games. Player-dealers will have to be seated at the gaming tables at all time, and after every hand all the players must be offered the chance to take over as the player-dealer. Further, the role of player-dealer must rotate to "at least two players other than the TPPP every 40 minutes or the game shall end," per the new law.

Only one TPPP will be allowed at a table, tables must post notices informing players that “any player can assume the player-dealer position when it is offered. The player that assumes the player-dealer position cannot win or lose more than the amount they wager.”

California gaming regulations, which will be enforced beginning in April 2026, will put restrictions on third-party contracted ‘player-dealers’ in card rooms across the state. Currently, third-party contracted player-dealers have served as semi-permanent dealers in card rooms, which avoids violating laws prohibiting ‘banked’ gambling at non-tribal gaming establishments in California (Getty/iStock)

An industry goes bust

The card room industry — and the cities that bring in tax revenue from the venues' popularity — are balking at what they see as the destruction of an entire sector by the state's regulators.

“The proposed regulations destroy the financial viability of the California cardroom industry, jeopardize thousands of working families and harm dozens of California communities,” California Gaming Association President Kyle Kirkland wrote in a letter to Attorney General Rob Bonta earlier this month.

There are more than 70 card rooms operating in California, and they employ approximately 20,000 people, according to the association. It is predicting the new regulations will seriously reduce the industry's economic impact and slice the number of people it employs by half, the LA Times reports.

The association commissioned a study in 2019 that claims the industry generates approximately $500 million in tax revenue each year, with $398.8 million going to state taxes and $100.9 million going to local gaming taxes.

LA County Supervisor Hilda Solis sent a letter to the state's oversight committee arguing against the regulations, noting that the card rooms support more than 9,000 jobs in the county and generate more than $2 billion in total economic activity.

Victor Rocha, the chair of the Indian Gaming Association and a member of the Pechanga Band of Indians, issued a statement to the LA Times celebrating the new regulations.

“Justice delayed can sometimes still be justice too,” he said.