New California Rules On Player-Banked Games to Impact Business

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Monday, July 18th, 2016 | Written by Charles Washington

Card rooms are legal in California, provided that they first obtain the necessary license from the Bureau of Gambling Control, and like the state’s tribal casinos they are also subject to a number of regulations that are designed to protect players’ interests. However, the laws governing California’s card rooms have been overhauled recently, and many in the industry are now concerned that the rules scheduled to come into effect by the end of September will hinder the card rooms’ ability to make money, as well as interfere with overall experience of players.

On the other side of the coin, California’s tribal casinos believe that the new guidelines do not go anywhere near far enough, with Tuari Bigknife, AG for the Viejas tribe in San Diego, stating that the tribes would push for more stringent rules. Explaining that cardrooms will still technically be able to play more than 50 hands per hour of table games such as blackjack or baccarat before the deal was moved, Tuari Bigknife said:

“We’re disappointed with the actions the bureau has taken. We don’t think what has been put out complies with the law.”

Changes Announced

The decision by the Bureau of Gambling Control to change the regulations shouldn’t come as a complete shock, as for years tribal casinos have protested so-called “player banked” games. This type of game was set up as a way for card rooms to offer games that are otherwise banned under California law, like blackjack. With a player banked game, players take turns acting as a dealer, and the house takes away a percentage of the winnings. Tribal casinos say that this is skirting the law, and wants to see this type of gaming end in order to reduce competition for their games.

In response to the criticisms leveled by tribal casinos against player banked games, the Bureau of Gambling Control announced that they would do a full inquiry into the matter back in February 2016. On June 30, 2016, Kamala Harris, the Attorney General of California, subsequently issued a statement outlining the new regulations that have been adopted based on that inquiry. Card rooms will have to adopt the new rules by September 30, 2016 in order to comply fully with the law.

Details of the Changes

Here are some of the new requirements that the California Bureau of Gambling Control is imposing on card rooms:

1. The player-dealer position must be offered to all players seated at the table at least once every two hands. This must be done audibly and in the presence of a security camera. This change may be inconvenient, as it will slow down card play, but it is not expected to have a huge impact on card room operations.

2. No player may hold the dealer-player position for longer than 60 minutes. A new dealer-player will need to be selected every hour. The 60-minute time frame will begin as soon as the dealer-player position is taken up by a new player.

3. If a game fails to meet the requirements of play, it must end and a new game cannot begin for at least 2 minutes. When the game ends, cards and tiles may not be distributed and no wagers can be placed. The dealer tray must be kept covered during the 2-minute period to signify that the game has ended.

4. At the start of a new game, the cards and tiles must be shuffled.

When you combine the requirements outlined in points two, three and four, it’s clear that there will be dead times during game play. These dead periods will mean that casinos are not actively making money from the games and that players will have to occupy themselves. Many in the industry are predicting that this will mean shorter stays at card rooms.

CGA Reacts

California cardrooms employ more than 23,000 people, and each year generate a combined $2 billion in economic activity across the Golden State, resulting in hundreds of millions being channeled towards state coffers in the form of taxes. Following news of the dramatic legal changes to their operations, it didn’t take long for the California Gaming Association (CGA) to release a full statement on the issue, with an extract reading:

“..we are very concerned about the substantial adverse economic impact these changes will have on our industry’s ongoing operation. We are most concerned about the effect on the 23,000 jobs cardrooms support throughout the state and the dozens of California communities that rely on the cardroom industry for valuable jobs and tax revenue, which may suffer as a result of these new policies.”