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California’s gambling industry invested significantly in opposing three lawmakers who contributed to a gambling bill the industry fiercely resisted. The card room industry considers the $3 million well spent because three of the four lawmakers eventually lost their reelection bids.
Earlier this year, gambling service operators lost a legal battle as they tried to suppress and dismiss a bill that would allow tribal casinos to sue them. The industry did not succeed as Governor Gavin Newsom signed Senate Bill 549, a bill likely to precede lawsuits that claim California service operators are offering card games illegally.
The outcome of potential lawsuits and legal battles between California card rooms and tribal casinos will likely have little to no effect on customer access. Even if popular platforms run out of business, there will be others that allow users to play roulette online for fun, and also provide great bonuses for new, exciting games, in addition to various live casino offerings. Such lawsuits only show how technology can help ordinary users retain access to the games they like to play, with a special accent on budding crypto platforms. But let’s see what the future holds for the respective lawmakers.
Candidates With Tribal Campaign Ads Targeted Against Them
Only Oceanside Republican candidate Laurie Davis successfully won her reelection bid. However, Davis won over Democratic opponent Chris Duncan with only 3,870 votes. Although she has a card room in her district, a vote Davis cast contributed to the bill’s progress. In addition to Davies, Evan Low was also targeted for his role in advancing the bill. Like Davies, Low also had a card room in his district, a fact that may have aggravated card rooms into spending $500,000 on ads tackling him.
There also was Democratic lawmaker Brian Maienschein, who cast a vote that helped the bill progress. Additionally, Hawaiian Gardens lawyer Sharp said Maienschein declined a meeting with representatives before the vote and did not respond to messages.
Finally, there was Josh Newman, the lead of the gambling bill, who was opposed in ads and mailers that cost the card rooms at least $900,000. Newman lost to Steven Choi, a Republican opponent, by more than 6,000 votes. One of the ads run against Newman showed him as tolerant towards crime and accused him of sponsoring benefits for illegal immigrants.
Interestingly, Newman believes his nail in the coffin was the $1 million spent by the American Federation of State, County, and Municipal Employees, a major labor union. Newman however believes that the card rooms’ efforts did do some damage.
Potential Effects of Tribal Lawsuits
The ramifications of this bill stretch across multiple sectors because several cities in the state receive most of their generated revenue from card room taxes. This means that there could be less money to fund firefighters, police, and other services if tribal casinos win lawsuits against card rooms. San Jose has said that a considerable percentage of their budget comes from taxes and fees paid by card rooms. According to city Councilmember Sergio Jiminez, San Jose gets about $30 million annually from card rooms. This figure is enough to fund 133 firefighters and 150 police officers.
The argument from the tribes is that they got exclusive rights to host table games from state voters. However, they had no legal right to bring lawsuits against existing card rooms that violate these rights because the tribes are sovereign governments.
From January 1, 2025, tribes will be able to sue card rooms. While these card rooms say the games they operate are legal, they are concerned that the cost of lawsuits and legal representation could significantly affect their business. This is why they spent over $3 million on messages and attack ads against the four candidates while supporting opponents.
Federal and state election rules state that organizations not affiliated with a candidate can spend any amount they like to support or oppose candidates if their actions are not designed or in agreement with the candidate’s campaign team.
Tribes Have Outspent Card Rooms on Political Lobbying and Donations
When the bill was initially introduced last year, card rooms began a massive lobbying campaign. For instance, Hawaiian Gardens Casino spent $9.1 million last year on lobbying alone, the second largest amount after Chevron Corp.
Over time, tribes have spent much more than card rooms on lobbying efforts in state politics. Since 2014, Tribes have donated over $23.5 million to candidates, more than double the amount spent by oil companies on politicians in the same period. Since January 2023, these tribes have donated $6.3 million to candidates, 384% higher than card room donations of about $1.3 million in the same period.
Since Newsom began running for governor in 2017, California’s tribes have donated more than $7.1 million to his committees, compared to $252,400 Newsom received from card rooms in the same period. Over time, Newsom has made several calls and suggested actions in favor of tribes. For instance, the California governor has pushed for the return of more than 2,800 acres of ancestral land to the state’s Shasta Indian Nation. In addition, Newsom has apologized to tribes and native communities for “historical wrongs committed” against them.
