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California Tribes Sue Cardrooms Over House-Banked Games

Posted on by John Lathram

Rincon Band of Luiseño IndiansThe first shot was fired in a likely long legal battle between California tribes and the state’s cardrooms over the latter’s hosting of house-banked games.

A lawsuit was filed in San Diego County Superior Court by the Rincon Band of Luiseño Indians and the Santa Ynez Band of Chumash Indians, naming a dozen casino corporations as defendants, as well as dozens more unnamed defendants who are accused of being third-party proposition players. Among the defendants are some of California’s most popular and well-known card clubs such as the Bicycle Casino, Commerce Casino, and Hawaiian Gardens Casino.

The tribes have been crying foul for years over the cardrooms’ actions of offering games such as Blackjack and Pai Gow Poker, which are typically house-banked games. The tribes cite California gaming laws such as the Gambling Control Act that give them exclusive rights to such games within the state.

Repeated attempts by several tribes to obtain relief by complaining to the California Department of Justice and the Gambling Control Commission over the years have apparently gone unheeded, forcing the hand of the tribes and prompting the filing of the lawsuit.

Loophole Found

The allegations center around the cardrooms’ somewhat sneaky way of offering the games by allowing players to assume the role of the “house.” Each player is able to act as the dealer on a rotating basis, with the cardroom profiting simply by taking a percentage of the bets made or collecting a fee from the player acting as the bank.

California cardrooms, by law, are not permitted to have a stake in the games that they host. They can, however, extract a fee or a “rake” from every hand, which is exactly the model used in poker games.

But the situation gets even stickier because some players elect not to act as the house or bank when it’s their turn to do so. Despite the advantage or edge in the rules for the dealer in games such as blackjack, some players choose not to be the bank to avoid the risk involved or simply because they are more familiar with and enjoy being the player.

Do the Tribes Have a Case?

That has led to the cardrooms using third party proposition players who assume the role of the house. The TPPPs are not employed by the cardrooms, but instead are contracted to take on the role.

In effect, the TPPPs are acting as the bank because the cardrooms can’t because that would be against the law. If it all sounds a little bit shady to you, that’s because it is. However, the use of TPPPs has been condoned by the California State Legislature, which passed laws over a decade ago requiring that third party proposition players be licensed.

Whether the tribes will win the lawsuit is still very much up in the air because millions of dollars in revenue are generated for California through games like Blackjack. You know, games that are not house-banked. Wink wink.

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