California Gov. signs into law bill reinstating moratorium on cardroom expansion

California Governor Gavin Newsom on Monday signed Assembly Bill 341 into law. The legislation reinstates a moratorium on cardroom expansion in the Golden State, meaning no new such establishments will be allowed for 20 years. However, existing cardrooms will be able to increase table games modestly over time.

The bipartisan legislation is supported by more than 40 California tribes and cardrooms. The new law reinstates provisions sponsored by the cardroom industry in the 1997 Gambling Control Act, which prohibited California from issuing new cardroom licenses. That moratorium was periodically extended by the state legislature for 25 years before it expired on January 1, 2023.

The new law, which is a rare example of California Indian tribes and cardrooms working together, is retroactive to January 1, thus squashing any plans to take advantage of the opening for cardroom expansion. Assemblymember James Ramos, the only Native American in the California legislature, sponsored the bill, which received near-unanimous support in the legislature.

In a statement, Ramos said: “I am happy to have brought the tribes and cardrooms together in a historic consensus that has resulted in the bipartisan AB 341 becoming law. I deeply appreciate Gov. Newsom’s support for AB 341, which will help ensure the vitality of the gaming industry by allowing for measured cardroom growth without overexpansion over the next 20 years.”

Assemblymember James Ramos

The measure allows licensed cardrooms operating fewer than 20 gambling tables to add up to 10 new tables over the next two decades. Eligible cardrooms could add up to two tables in the first after the law takes effect and up to two more tables every four years thereafter. The legislation’s goal is to ensure continued growth while avoiding over-expansion.

Assembly Bill 341 was approved by the California State Assembly through a 68-1 vote in March, and by the State Senate in a 32-0 vote earlier this month. Sponsors of the legislation included the Cahuilla Band of Indians, Commerce Casino & Hotel, Hawaiian Gardens Casino, Kings Card Club, Morongo Band of Mission Indians, Rincon Band of Luiseno Indians, San Manuel Band of Mission Indians, and the Santa Ynez Band of Chumash Indians.

“This new law will provide smaller cardrooms and their communities the opportunity to grow over time and create new jobs and local economic benefits without over-saturating the gaming market,” stated Keith Sharp, President of the California Cardroom Alliance.

“The overwhelming support for AB 341 by state legislators, tribes and cardrooms aligns with the will of California voters who have consistently stood with Indian tribes in support of gaming on federally recognized tribal lands while opposing over-expansion of gaming across the state,” added Morongo Tribal Chairman Charles Martin.

California’s cardroom industry dates back to the 1800s, when card clubs operated through local ordinances. In 1998, the state began overseeing the industry with the Gambling Control Act and through the creation of the California Gambling Control Commission and Bureau of Gambling Control. Additionally, the act also set the first 10-year moratorium on cardroom expansion.

Whenever the moratorium ended, the legislature expanded it. However, a movement soon developed of small card clubs asking to add more table games, which was opposed by California tribes, which alleged this would violate their exclusivity on house-banked games. 

Frustrated with the lack of progress on allowing small cardroom expansion, the Senate Governmental Organization Committee rejected a bill passed by the Assembly to extend the moratorium another year. Sen. Bill Dodd, chairman of the committee, told stakeholders that the moratorium would be back in place as long as they reached a compromise on expanding small cardrooms, which Ramos helped craft through a workgroup with tribal and cardroom interests.

The compromise Ramos and stakeholders from both sides reached was deemed reasonable by gaming interests in the state. The California Gaming Association (CGA), whose membership represents the majority of licensed cardrooms in California, has now issued a statement applauding Gov. Newsom’s signing of Assembly Bill 341.

"The California Gaming Association commends the leadership and support of the state legislative leaders [...] in signing into law Assembly Bill 341 that recognizes California cardrooms are critical to many local economies and communities across the state as it preserves the good-paying jobs cardrooms provide and the tax revenues relied on by many cities," said Kyle Kirkland, President of the California Gaming Association. 

"This legislation allows for an increase in tables for existing small cardrooms while reinstating a license moratorium that has helped provide stability in the industry for decades,” he added. James Siva, chairman of the California Nations Indian Gaming Association (CNIGA), also supported the decision, noting it was a rare case that both cardrooms and tribes agreed on gambling-related legislation.