After a last-minute defeat in a Senate committee to get a state moratorium on the number of licenses and tables for cardrooms extended for another year, lawmakers, some tribes and cardroom owners agreed to negotiate in an attempt to make a deal before next year’s legislative session.
But the California Nations Indian Gaming Association (CNIGA) warned Friday (September 2) that the failure of the Senate Governmental Organization Committee to pass Senate Bill 637 opens the door to the expansion of commercial cardroom gaming in communities state-wide.
California’s legislative session came to an end on Wednesday (August 31) with SB 637 not being among the bills sent to Democratic Governor Gavin Newsom for his signature.
The bill, which was approved in the Assembly by a vote of 75-0 with five members not voting, was defeated on a party-line vote as Democrats on the committee supported chairman Senator Bill Dodd’s opposition to the measure.
The final vote was 3-3 with nine committee members not voting.
“It was dispiriting to see that only six of the committee’s 15 members were willing to record an actual vote, despite having 12 members present and able to vote,” James Siva, chairman of the CNIGA, said in a statement.
“While we greatly appreciate the three Republican voters in support,” Siva said, “the unwillingness of the committee to have a substantive debate about the potential impacts of the expiration was troublesome.”
Senator Rosilicie Ochoa Bogh, who sponsored SB 637, said continuing the moratorium would “preserve the stability of gaming in California.”
The moratorium that restricts expansion of existing cardrooms or the licensing of new facilities began in 1995. In 2018, Assembly Bill 1168 was approved to extend the moratorium by three years to January 1, 2023.
Ochoa Bogh said there had been “diligent and thoughtful efforts” by lawmakers to find a compromise on issues such as stable cardroom expansion but the “reality is that the current political environment has not allowed for a compromise to be reached.”
In opposing SB 637, Dodd expressed his frustration that Senate Bill 576, sponsored by Senator Bob Archuleta, a Democrat, had been approved in committee and by the full Senate last year before sitting in the Assembly Government Organization Committee without ever being voted on.
Archuleta’s bill would have extended the moratorium from January 1, 2023, to January 1, 2028. The bill also would authorize “a city, county or city and county, to amend its ordinance to increase the number of gambling tables that may be operated” in a cardroom by up to two each year, up to a maximum of ten additional tables.
Dodd blamed some supporters of SB 637 for the defeat of Archuleta’s proposal by making it very clear that they would never support table-game expansion for cardrooms and the bill never got a committee hearing.
He also expressed concern that both cardrooms and tribes were telling the committee that they needed the bill to pass in order to continue negotiations to agree on a new moratorium in California.
“How can negotiations continue if we have stakeholders that refuse to negotiate?” Dodd said.
Dodd doubted if another year would make any difference. He said he would support a long moratorium if it gave some ability to small cardrooms to be able to grow.
Despite the moratorium expiring on December 31, Dodd said he spoke with gaming regulators and there are not going to be any new cardrooms in California in the next year or three years.
“It takes three to five years to get a new cardroom passed,” Dodd said. “Nobody in their right mind would spend that type of money to get a new cardroom.”
According to state gaming law, there are currently two statutory moratoriums that restrict the growth of cardrooms in California.
One moratorium prohibits the state from issuing licensed for new gambling establishments and the other limits licensed cardrooms from expanding the number of tables and hours they operate.
Fred Castano, a spokesman with the California Gambling Control Commission (CGCC), said the role for the CGCC and the Bureau of Gambling Control, a division within the state attorney general’s office, was to just ensure that no-one violates the moratorium.
“We support the one-year moratorium,” said Ed Manning, a partner with JKP Public Affairs, which represents Hawaiian Gardens cardroom and the California Cardroom Alliance.
Manning said the group has been engaged in discussions to try to find a path for cardroom table-game expansion and the continuation of the moratorium for the better part of two years.
He attributed the inability to reach an agreement due to the political climate and the two sports-betting initiatives on the November ballot.
Proposition 26 would allow in-person sports betting at California’s 62 tribal casinos and four racetracks. Proposition 27 would allow online wagering, managed by commercial companies such as DraftKings and FanDuel.
“We think when we get past… November, we can have a better framework to support expansion but not at the expense of the moratorium,” Manning said.
Dodd expects the bill to be amended over the recess and then reintroduced next session. Both houses of the California legislature are now out of session until January 2, 2023.