Indian tribes that run casinos in California fail to eliminate competitors

Indian tribes that run casinos in California have spent millions of dollars in court, the legislature, and trying to influence elections over the years in an attempt to keep their sole rivals out of California's casino industry. A judge has blocked their most recent attempt.

Tribes argued last year that they had the sole right to provide Las Vegas-style gambling in the state, and they convinced Governor Gavin Newsom and the California Legislature to grant them permission to sue card rooms, which are gambling establishments.

Before Newsom approved Senate Bill 549, the tribes had no legal standing to challenge the private companies since the tribes are sovereign nations. However, this year, the tribes had one chance to settle their disagreement in Sacramento County Superior Court to claim exclusive rights to offer gaming.

A Superior Court judge dismissed the tribes' case, stating that the federal gambling statute took precedence over the legislation that Newsom signed. The judge wrote, “The court is mindful that previous efforts to resolve this longstanding dispute – whether through regulatory action, legislation, ballot initiatives, or litigation – have been unavailing. The court recognizes the genuine desire, shared by many stakeholders, including the California Legislature, to reach the merits and achieve a final resolution. The court does not take lightly the importance of the issues at stake and, were it within its authority to provide a definitive resolution, it would endeavor to do so.”

The card room sector in California praised the decision. California Gaming Association President Kyle Kirkland said that the association is encouraged by the decision, and that the member cardrooms will continue to support good jobs, essential public services, and local economies throughout California.

Tribes said they want to appeal the court's ruling because they vehemently disagree with it. The California Nations Indian Gaming Association said that the ruling is especially troubling because it was a state law enacted just last year that explicitly gave tribes standing in state court.

City taxes versus tribal revenues

According to the tribes' lawsuit, dozens of gambling halls located throughout California were unlawfully providing card games like pai gow poker and blackjack, which allegedly reduced the tribes' gambling profits.

Tribes claim that voters in California granted them the sole right to hold table games years ago, and they rely heavily on this revenue stream to help their historically marginalized communities.

The bill prohibits tribes from getting any compensation or legal fees related to the litigation. Rather, their only option was to ask the court to rule on whether card rooms could keep providing the contested games. Because card room taxes account for almost half of some cities' budgets, the stakes are high outside of casinos. A tribal victory in court would have put funding for municipal services like police and firefighting at risk.

Last year, a San Jose City Council member informed lawmakers that the city's $30 million annual revenue from card rooms could pay for 133 firefighters or 150 police officers. According to him, if the tribes win in court, money could be at risk.

According to the card room industry, the games are legal and have all received approval from the attorney general's office over the years. Due to the alleged unfair commercial tactics, the tribes have already attempted to sue card rooms. However, the courts in California have decided that the tribes lack standing.

A costly political battle

During the two-year session that ended last year, the debate over SB 549 was one of the most expensive political conflicts. The gaming bill was opposed by a small group of lawmakers who had card rooms in their districts, while a bipartisan coalition of lawmakers, many of whom had large tribal casinos in their districts, supported it.

It came after a failed 2022 sports betting effort with a similar clause that would have allowed the tribes to sue, which the tribes had paid millions of dollars to fund.

When SB 549 was introduced, card rooms launched a significant lobbying campaign in response to what they perceived as an existential danger. The second-highest lobbying expenditure disclosed to state regulators in 2023 was $9.1 million, which was spent by Hawaiian Gardens Casino alone.

The card room industry then retaliated against four members who were instrumental in the bill's approval, spending over $3 million in the run-up to the November election.

Source:

“Judge shuts down California tribes’ latest bid to crush their casino rivals” , Ryan Sabalow, calmatters.org, October 10, 2025.