Two More Tribes Enter Suit Over California Card Rooms’ Banked Games

By Heidi McNeil Staudenmaier and Caitlin Vanderkarr

“Defendants [California card rooms] operate, participate in, and facilitate illegal gambling,” according to a complaint filed on April 1, 2025, by the Rincon Band of Luiseno Indians (the Rincon Band) and the Santa Ynez Band of Chumash Mission Indians of The Santa Ynez Reservation, California, a/lc/a Santa Ynez Band of Chumash Indians (the SYC) (the April Complaint).¹ On the last day of the three (3) month period authorized for such filing under the Tribal Nations Access to Justice Act (the TNAJA), the Rincon Band and the SYC filed their complaint “to stop the … Defendants’ exploitative abuses.”²

A similar complaint had been filed in January by seven (7) California tribes against substantially the same Defendants under the TNAJA to resolve a dispute over banked games in card rooms (the Initial Complaint), Agua Caliente Band of Cahuilla Indians v. Parkwest Bicycle Casino, LLC, wherein those seven (7) tribes requested injunctive and declaratory relief from the Court.³ A subsequent complaint was later filed by these same seven (7) tribes on February 18, 2025 (the Amended Complaint), to update Defendants’ legal entity names and the names of specific games offered; those same Defendants are listed in the April Complaint.⁴

The April Complaint provides a summary of the legal history and background, and claims that the Defendants “openly and extensively” commit “flagrant violation[s] of the law” through the use of third-party proposition player (TPP) banking arrangements with Card Rooms.⁵ Similar to the Initial Complaint and First Amended Complaint, the April Complaint alleges: (1) TPPs operated as a bank, rather than a player wagering on card games within Card Room, (2) TPPs paid the Card Rooms for this privilege, and (3) those actions “are indistinguishable from banked games in Nevada or New Jersey casinos” that are “prohibited by the California Constitution.”⁶

The April Complaint noted that “several card rooms [have been] prominently advertising ‘Vegas-style’ gaming” and “have not been bashful” in their advertising.⁷ The Rincon Band and the SYC in the April Complaint requested the Court issue an injunction preventing the Defendants “from offering and profiting from” the games and declare those games illegal.⁸ Finally, the April Complaint requested consolidation of the April Complaint and the related action encompassing the Initial Complaint and First Amended Complaint.⁹

The Rincon Band and the SYC emphasized the ties between “organized gaming on tribal lands” and the purpose of using gaming revenues for “tribal sovereignty and self-reliance,” including “desperately needed health care and social services for tribal people.”¹⁰ These tribes assert that they are merely asking the Court to apply the same edict to Card Rooms and TPPs at present as it applied to tribes in Hotel Employees & Restaurant Employees International Union v. Davis¹¹ : that banked games in violation of California Penal Code Section 330’s prohibition, wherein all players bet against one fund and the fund banker receives all wins and pays out its losses to players, are illegal and must cease.¹²

The April Complaint emphasized that the “California tribes were required to successfully persuade a constitutional Amendment Initiative to be excepted from the Constitutional prohibition” and Section 330, therefore the Defendants should be required to “successfully pursue their own Constitutional Amendment Initiative” to obtain those same rights, “which they have not done.”¹³ The Rincon Band and the SYC argue that the Constitutional Amendment and related compacts demonstrated the will of the voters that tribes be provided a “‘constitutionally-protected monopoly’” in “an economic environment free of competition,” and assert that allowing any party other than a tribe to conduct any banked game would “become another broken promise to California Indian tribes.”¹⁴

The April Complaint further asserts that “none of [the licensed card rooms] stay within the limits of their lawful opportunities” because the “card room industry’s concerted and explicit efforts” are intended to encroach on tribally-exclusive banked games in order to “generat[e] greater collections revenue” for the card rooms.¹⁵ These tribes contend that TPP banking of Card Room Defendants’ games and the attendant player banking rules are an “artifice[]” to “superficially disguise banked games’ true nature” to circumvent the law¹⁶ and that the “purported rotation of the player-dealer position and bank” is not “materially distinguishable” from illegal banked games and thus should not be treated separately under California law.¹⁷ Even if the Defendants’ games were compliant with California statute or rule, the California Constitution would nonetheless prohibit them and prevent the Defendants from offering such games, according to the Rincon Band and the SYC’s April Complaint.¹⁸

The Rincon Band and the SYC contend that Defendants’ “illegal gaming” has resulted in the loss of “hundreds of millions of dollars” each year for tribes, as well as “thousands of employment opportunities”, to the tune of “at least $18 million per year”.¹⁹ Additionally, these tribes assert in the April Complaint that tribes have lost “business… market share, and goodwill in the marketplace,” which, in conjunction with the financial and employment losses, “directly results in the underfunding of essential tribal governmental services” impacting each tribe’s programs for government, welfare, housing, education, healthcare, and law enforcement, among others.²⁰

The April Complaint requests that the Court: (a) “retain continuing jurisdiction” for enforcement purposes, (b) enjoin “Defendants’ offering of blackjack, baccarat, pai gow poker, and analogous games”, (c) declare that such games violate (i) Penal Code Section 330 and (ii) California Constitution, Article IV, Section 10, when offered by Defendants, and (d) declare that “contractual relationships between the Card Room Defendants and TPP Defendants” violate Section 19984 of the California Business and Professions Code.

Due to the filing of the April Complaint subsequent to the filing of the Initial Complaint and the Amended Complaint, the Honorable Lauri A. Damrell issued a Minute Order on April 4, 2025, that: (a) extended the Defendants’ response deadline to May 2, 2025, so Defendants could address the allegations across the complaints from all nine (9) tribal Plaintiffs, (b) consolidated the case management conference with the Hearing on Demurrer/Motion to Strike and set the date for both to August 8, 2025, at 9:00 am, and (c) confirmed that all Plaintiffs’ opposition briefs are due June 13, 2025, and Defendants’ reply briefs to all of the aforementioned complaints are due July 16, 2025.²¹ Due to the complaints’ underlying similar contentions, the Court instituted strict page limits and a requirement to avoid “duplicative arguments raised in any other brief,” as well as requiring all parties to agree not to request to move the deadlines listed in the Minute Order.²²

The Court’s decision is likely to impact the financial viability assessments of tribes and commercial operators alike within California’s gaming landscape. The decision may create a framework for subsequent actions in other states and provide persuasive precedent for future litigation. Legal examinations of the relationship between the Federal Indian Gaming Regulatory Act, state constitutions, state gaming regulations, and state statutes will indubitably remain central themes in the ever-evolving gaming landscape in the years to come.