Since California Senate Bill 549 went into effect on January 1, 2025, several Native American tribes owning casinos filed lawsuits against California card rooms. They claimed these card rooms were illegally operating games like blackjack, arguing that they had been granted exclusive rights to host these games by California voters in order to support their tribal communities.

What gives?

Most of these card rooms provide essential revenue to small cities. If the court rules in favor of the tribes, several cities might find themselves lacking funds for their police force and road repairs.

Of course, the card rooms claim their operations are legal, and that the tribes’ lawsuit is a rotten attempt to eliminate nearby competition. 

Where did SB 549 come from?

SB 549 gives a three-month window for Native American tribes to file lawsuits, but it was controverscial even before it went into effect. Tribes lobbied for it and card rooms lobbied against it, with Hawaiian Gardens Casino alone spending upwards of $9 million in 2023. It was the second-highest among all state lobbying expenditures.

So it was a big blow to the card rooms when the bill was finally passed and signed into law by Governor Gavin Newsom. Afterwards, frustrated card rooms targeted individual lawmakers in the November elections, and successfully removed three key lawmakers, including the bill’s author, from office.

What does it mean?

These unique lawsuit underscore the fragile balance between tribal sovereignty and economic interests. With tribes using gambling revenues to support their communities, it’s hard to know where to draw the line between a regular casino and an essential source of tribal revenue. 

Furthermore, the precarious situation many California cities are finding themselves in points to broader issues around their financial stability and reliance on the card room industry. 

It is never a good sign when the passage of one bill or the decision of one lawsuit could upend a city’s funding.