California tribal lawsuit should shake up state’s gaming regulators By John L. Smith, CDC Gaming Reports January 7, 2019 at 8:00 pm It’s only January, but 2019 just got very interesting – dangerously so for the gambling gold mines of California. After watching what they believe has been a steady erosion of their exclusive casino gaming compact with the California government, three Indian tribes sued the state this week in federal court. The tribes have effectively called out the state’s Gambling Control Commission and Bureau of Gambling Control for failing to follow either the letter or the spirit of Proposition 1A, which in 2000 enabled the state to enter into exclusive casino compacts with Indian tribes. That also drew a bright line separating the tribal casino games from those offered by California’s licensed card rooms. To say that bright line has been blurred in recent years is an understatement. The litigation itself is no great surprise. Tribal officials have been made it clear they would act if California gaming regulators failed to keep a closer watch on the card clubs. And now they have. The lawsuit, filed in the Eastern District of California, lays out damning allegations that threaten to embarrass the state’s system of gaming control. Although many tribes have an interest in this fight, it’s being waged by the Yoch Dehe Wintun Nation, the Viejas Band of Kumeyaay Indians, and the Sycuan Band of the Kumeyaay Nation. Located east of El Cajon in unincorporated San Diego County, the Sycuan Mission Indians provide a great example of the power, profit and possibilities of tribal gaming. Other tribal casinos have evolved into modern, Vegas-style venues with many millions in infrastructure and investment made in relatively few years. Tribal gaming has been a big winner on the reservation and, in turn, in the state. A 2016 California Tribal Government Gaming Impact Study produced by the California Nations Indian Gaming Association (CNIGA) found that the casinos generated $7.8 billion in economic impact in the state, added $5 billion to the California economy, employed 63,000 workers (a majority are not tribal members) and generated more than $400 million in annual tax revenues at the local and state levels. The tribes have been successful in large part because they’ve enjoyed exclusivity when it comes to Las Vegas-style casino play on games such as blackjack. It’s not breaking news these days that many California card rooms located in urban areas have been allowing blackjack and banking their own games in violation of state law. There’s a good possibility California regulators will look very bad before this mess is over. As the litigating tribes argue in their recent new release, “Californians have long opposed the spread of gaming in urban areas, and it was no mistake that the grant of gaming exclusivity to Indian tribes rested on the promise that Las Vegas-style gaming would be restricted to their remote Indian lands.” Whether that opinion is a little over-inflated in 2019 is debatable. The fact is, the tribes have the compacts, the financial wherewithal, and the political clout to fight a protracted legal battle with the state. The tribes have been complaining about the card rooms’ actions for seven years. Frankly, they’ve exercised a lot more patience than the “Las Vegas-style” casino corporations would have if they believed a competitor had crossed the line. In a statement, Yocha Dehe Tribal Chairman Anthony Roberts argued, “State law, the Constitution and our compacts are all very clear about our exclusive right to operate house-banked, casino-style card games. We did not want to file this suit. But cardrooms continue to play and brazenly advertise these games, even though it’s patently illegal for them to do so. We are asking the State to simply do its job and enforce the gaming laws and rules California’s voters and State Legislature have put in place.” While the cardrooms also generate handsome tax revenues and employ thousands of workers, it’s hard to with the tribe’s success story in business and in improving the lives of its members. If tribal and CNIGA’s leadership is truly wise, it will remind friends and strangers of that compelling success story as it embarks on what could be a long battle in federal court. Contact John L. Smith at email@example.com. On Twitter: @jlnevadasmith.