Tribal casinos lose ground in fight over cardroom banked games
Alan Riquelmy
SACRAMENTO, Calif. (CN) — Indian casinos pushed back Friday on a California judge’s tentative ruling that dismissed their challenge to non-tribal cardrooms offering games like blackjack.
Arguments over Sacramento County Superior Court Judge Lauri Damrell’s tentative ruling focused on her finding that the federal Indian Gaming Regulatory Act preempts the case, leading to its dismissal.
Tribal casinos say the ruling is flawed because the act regulates gaming on tribal lands, while their complaint targets non-tribal cardrooms offering banked games like blackjack and baccarat, which tribes claim are their exclusive right.
The cardrooms counter that tribes want both the ability to negotiate compacts under the federal act and to sue under state law, while cardrooms cannot sue tribal casinos over games on reservations because of their sovereignty status.
“They can’t have it both ways,” said attorney Ben Horwich, representing the cardrooms. “That is why [the regulatory act] exists.”
The Indian casinos sued under Senate Bill 549, called the Tribal Nations Access to Justice Act. It enables California tribes to file a complaint in Superior Court against cardrooms to determine if a banked game does, in fact, violate the law.
A banked game is one where the “house” serves as the bank. Cardrooms use third-party proposition players, who serve as a bank, an act Indian casinos say is illegal. It’s an issue that’s existed for years, with no clear legal resolution.
Arguing for the Indian casinos, attorney Adam Lauridsen said the judge’s ruling would break new legal ground. The federal regulatory act focuses on Indian casinos on tribal land.
“[The act] has not stretched that far and should not stretch that far,” Lauridsen added.
Additionally, through Senate Bill 549, the Legislature recognized a tribe’s ability to seek relief through the courts, he said. Preempting the lawsuit under the federal act is an aggressive assertion of federal authority, Lauridsen said. Instead, the judge can adjudicate the suit under the state law.
“We don’t think any of this should be preempted because it’s non-tribal gaming off Indian land,” he added.
The state law gives tribal casinos standing to sue, which isn’t enough to trigger the federal regulatory act, Lauridsen said. If the act does preempt their suit, they have no other path to seek justice.
For the cardrooms, Horwich argued that the tribes are in court for one reason — competitors hurting their business. Congress created a process through the act, but the tribes want another roll of the dice in state court.
“This is the state voluntarily giving them a right,” the judge said, referencing Senate Bill 549 and pushing back on Horwich’s argument.
Horwich argued a process already exists through the gaming compacts Indian casinos negotiate with the governor and get approved by the Legislature. Senate Bill 549 blows past that process and, borrowing Lauridsen’s turn of phrase, is what truly breaks new ground.
“The remedy they’re seeking is putting a perceived competitor out of business,” Horwich said.
Damrell, in her tentative ruling, found that Senate Bill 549 and the lawsuits it enables fall within the federal regulatory act’s preemptive scope. The Indian casinos’ standing hinges on the federal act and its regulation of Indian gaming.
That act is extremely comprehensive, leaving states no role unless it’s through a tribal compact.
“As the cardroom defendants point out, SB 549 provides tribes with a breach of contract remedy that could have been negotiated in the tribal-state compacting process, but was not,” the judge ruled. “Plaintiffs largely ignore the compacting process and the specific remedies that have previously been negotiated, regardless of whether they were ultimately included in a compact.
Damrell said if she opts to change her tentative ruling, she’ll issue a new one before an Oct. 10 hearing in the case.