Sen. Newman’s Bill Would Severely Impact Cardrooms, City Budgets, and Tens of Thousands of Employees

State Senator Josh Newman (D-Fullerton).

A protest is scheduled tomorrow at 11:00 a.m. Newman’s Fullerton office at 203 N Harbor Blvd., Fullerton, CA 92832.

By Brian Hews

Last year, California voters rejected Proposition 26, a ballot measure that would have allowed tribal casinos to run roulette and dice games while dictating the kinds of games the California cardrooms could offer.

The proposition would have likely driven the state’s cardrooms, such as The Gardens Casino in Hawaiian Gardens and The Commerce Casino in Commerce, out of business.

California cardrooms provide a significant source of tax revenue for city and county general funds; vital tax revenue to the cities for education, public safety, public health, infrastructure, and homelessness.

If Prop. 26 had passed, some cities would been forced to implement draconian cuts or get pushed into bankruptcy. In Hawaiian Gardens, the Gardens Casino provides 78% of the city’s revenue; in Commerce, the Commerce Casino provides 50% of the city’s revenue.

But California voters are smart and rejected Prop. 26 by a two-to-one margin; but evidently State Senator Josh Newman (D-Fullerton) is not one of the smart ones.

Despite the severe economic consequences, Newman is sponsoring and pushing a bill similar to Prop. 26, Senate Bill 549, the Tribal Declaratory Relief Act of 2023, a hurried gut and amend bill that would give sovereign tribal governments a new Private Attorney General Act (PAGA.)

SB 549 began as a measure dealing with education, but in June Newman substituted verbiage – lifted almost word for word from Prop. 26 – giving tribes a three-month window in 2024 to take legal action against the cardrooms related to poker games.

Newman is on a mission to drive cardrooms out of business even though California voters and the courts rejected Prop. 26.

PAGA would allow wealthy gaming tribes to sue the state and cardrooms seeking to stop thousands of approved card games from being played at cardrooms throughout the state.

In a time of deficits, SB 549 would cut $500 million in tax revenue statewide; California and local communities would lose $5.6 billion in economic output generated by cardrooms and 32,000 good-paying jobs that generate $1.6 billion in wages annually. 

According to the California Cardroom Alliance, the economic harm will happen quickly, before the litigation is resolved. Filing the lawsuits under PAGA will disrupt banking services while litigation is pending contending that the games are not legal, impacting cities, 30,000 cardroom employees and the large and small business owners who sell goods or provide services to cardrooms.

On top of the economic impacts, the bill raises serious legal questions about the separation of powers and the role of the courts concerning determinations made by the Attorney General. 

The cardrooms in California legally operate games approved by the Attorney General; many variations of traditional poker and California games are played. Each game is different, and each one is approved separately.

SB 549 would allow any or all these games to be challenged in court; every game would have to be adjudicated, meaning the judge would have to analyze the rules and implementation of the game, which could take years and clog the courts

Keith Sharp, President of the California Cardroom Alliance, told Los Cerritos Community News, “SB 549 is a thinly veiled attempt to close down cardrooms by the same few wealthy tribes who have failed in their repeated attempts to shut us down for years. Cardrooms have been lawfully operating under federal, state, and local laws for decades and are highly regulated by the California Gambling Control Commission and the Attorney General’s Department of Justice. Furthermore, SB 549 was already overwhelmingly rejected by voters as it contains language and intent similar to last year’s Prop 26. More than one thousand cardroom employees live in Senator Newman’s District. We are asking him to support his constituents and drop his bill that will negatively impact their jobs and communities.”