The Viejas Band of Kumeyaay Indians inked a gaming compact in 1999 which included the following exclusivity provision (emphasis added):
“The State and the Tribe recognize that the exclusive rights that the Tribe will enjoy under this Tribal-State Compact between the State of California and the Viejas Band of Kumeyaay Indians create a unique opportunity for the Tribe to operate a Gaming Facility in an economic environment free of competition from the operation of slot machines and banked card games on non-Indian lands in California and that this unique economic environment is of great value to the Tribe.”
This language is boilerplate for California tribal gaming compacts, and up until the last few years, non-tribal cardrooms and casinos honored the exclusivity agreement. The state’s non-tribal gambling establishments were free to offer traditional poker, video poker, and other casino games, but house-banked table games like blackjack, baccarat, and Pai Gow Poker were the exclusive domain of the tribes.
However, over the last few years, many non-tribal cardrooms and casinos began exploiting a loophole in the law by spreading “player banked” table games. Rather than bank the game in traditional fashion, the house simply collects a rake – similar to the system used in cash poker games – while players take turns banking.
In January, the Viejas Band of Kumeyaay Indians joined forces with the Yocha Dehe Wintun Nation and the Sycuan Band of the Kumeyaay Nation to sue then Governor Jerry Brown and the state of California. The card game lawsuit sought prompt enforcement of the exclusivity agreement, with the tribes offering the following argument:
“Californians have long opposed the spread of gaming in urban areas, and it was no mistake that the grant of gaming exclusivity to Indian tribes rested on the promise that Las Vegas-style gaming would be restricted to their remote Indian lands.”
A federal judge disagreed, however, roundly rejecting the tribes’ assertion that its gaming compacts can be used to enforce house banked card game exclusivity.
The tribes’ loss in court could be good news for sports betting enthusiasts. The state Legislature is currently considering a bill to regulate that industry, while several tribes have already quashed the idea by pointing to similar gaming exclusivity rights.
In a press release issued after the judge’s ruling was handed down, California Gaming Association (CGA) president Kyle Kirkland praised the court for siding with non-tribal cardroom:
“We are pleased that the Court dismissed this lawsuit by these California tribes against the State of California over alleged violations of their tribal gaming compacts”.
The Federal Court ruled that the compacts do not give the tribes exclusivity over gaming in California.
This litigation was an attempt to eliminate competition from local cardrooms, threatening thousands of California families and dozens of communities statewide.
For their part, the tribes issued a statement explaining that, while the court ruled in favor of the state, it didn’t necessarily reject the concept of exclusivity:
“The ruling was simply a procedural finding by the court that it lacked the power to require the State to enforce the law under the tribes’ compacts.
The court reasoned the State had not promised to protect the tribes’ right to gaming exclusivity – despite compact language acknowledging ‘the exclusive right’ each tribe enjoyed under its Compact ‘to operate a gaming facility in an economic environment free of competition from the operation of slot machines and banked card games on non-Indian lands.’
“Nonetheless, the court found the compacts are not the vehicle under which the tribes can force the State to enforce the law, and protect their exclusive right to offer house-banked card games”.
Continuing the card game lawsuit will likely involve the appeals process. In their statement, the tribes made sure to point out that they “respectfully disagree with the court ruling and are considering an appeal to the Ninth Circuit Court of Appeals.”