A San Francisco Superior Court judge has ruled that California gambling regulators overstepped their legal authority when they attempted to impose statewide restrictions on cardroom games, delivering a major victory for the state’s cardroom industry and the cities that depend on it for revenue.
Judge Richard Darwin issued the decision Tuesday, concluding that the Bureau of Gambling Control, which operates within Attorney General Rob Bonta’s Department of Justice, lacked the power to enact broad prohibitions on games across California through regulation. The ruling invalidates the challenged regulations and prevents them from taking effect unless a higher court overturns the decision.
The regulations targeted blackjack-style games and contests involving third-party proposition players, commonly known as player-dealers. California cardrooms have offered versions of these games for decades, while tribal casinos have argued that such offerings conflict with state law because tribes hold exclusive rights to banked card games.
Court Finds Limits on Bureau’s Authority
Darwin’s ruling centered on the scope of authority granted to the Bureau of Gambling Control. During legal proceedings, attorneys representing the California Gaming Association argued that the bureau’s responsibility is to enforce existing gaming laws rather than create new statewide policy through regulations.
The judge questioned the structure that would allow both the Bureau of Gambling Control and the separate California Gambling Control Commission to exercise similar authority over categorical game bans. According to GV Wire, he described the arrangement as a “strange structure.”
The bureau had argued that its authority to approve games also gave it the power to prohibit them. Attorneys for the agency pointed to its history of issuing regulations since 1999. Darwin interrupted that argument, saying “not like this.”
Attorney Jeremy Kreisberg, representing the gaming association, argued that state law specifically places limits on the commission’s authority regarding game prohibitions while placing no comparable restrictions on the bureau. According to the argument presented in court, that distinction suggested the Legislature never intended the bureau to wield such sweeping powers.
Darwin also indicated that further legal proceedings are likely, noting the possibility of an appeal. The parties are expected to meet to address procedural matters following the ruling. A written order is anticipated after a hearing scheduled for next week.
Industry and Cities Warned of Economic Fallout
Cardroom operators and local governments had strongly opposed the proposed regulations, warning that the measures could severely damage the industry and the communities tied to it.
According to information presented during the dispute, California’s licensed cardrooms support thousands of jobs and provide hundreds of millions of dollars to local governments each year. Industry representatives argued that eliminating key games would slash revenues, force business reductions, and threaten employment throughout the state.
The Attorney General’s own analysis found that the proposed restrictions would remove more than half of statewide cardroom revenue. The analysis also estimated that roughly one-quarter of that revenue would shift to tribal casinos.
Another economic assessment prepared for the Department of Justice projected an impact of approximately $600 million during the first decade after implementation.
Several cities joined opposition efforts because of concerns about losing tax revenue used to support public services. In Fresno, for example, Club One contributes about $1 million annually to the city’s general fund. Across California, industry representatives estimated that restrictions affecting the state’s 86 licensed cardrooms could cost roughly $396 million per year.
Cardroom operators also highlighted potential employment losses. Opponents of the regulations argued that more than 30,000 jobs could be placed at risk if the measures took effect.
Heather Guerena, vice president and general counsel for Stones Gambling Hall in Citrus Heights, said games involving third-party proposition players generate about 70% of the casino’s revenue. She said eliminating those games would require the business to reduce its workforce by between one-third and one-half.
“It was a relief for us to have the judge interpret the law correctly and find that the department did not have the authority to issue these regulations,” Guerena said.
Reactions and Prospects for an Appeal
The California Gaming Association welcomed the decision and characterized it as a significant check on regulatory authority.
Kyle Kirkland, president of the California Gaming Association and president of Club One Casino in Fresno, said, “For more than a year, we have said this case is about far more than gaming — it is about whether the attorney general and his regulators can bypass the Legislature and unilaterally rewrite decades of established law. Today, the court delivered a clear answer: they cannot.”
He also said, “The Court’s ruling is a lifeline for communities across California. If these regulations had been allowed to stand, the consequences would have been devastating for working families, local businesses, and the cities that rely on cardroom revenues to fund police, parks, libraries, youth programs, and other essential services.”
Kirkland further criticized the purpose of the regulations, stating, “These regulations were never about protecting the public. They were designed to advance the interests of a handful of powerful gaming tribes at the expense of local communities, working families, and established cardroom businesses.”
The Bureau of Gambling Control expressed disagreement with the outcome. A spokesperson said, “We are disappointed in today’s ruling but are reviewing our options and will respond appropriately.”
The legal fight follows years of disagreement between cardrooms and tribal gaming interests over blackjack-style games and player-dealer arrangements. Attorney General Bonta announced the proposed restrictions in February, arguing that blackjack offerings violated a 19th-century prohibition involving a game known as “21.”
The Office of Administrative Law had approved the regulations, which were scheduled to take effect on April 1. However, Darwin issued a preliminary injunction in May that blocked enforcement while the litigation continued.
Tuesday’s ruling leaves the disputed games in operation for now and shifts attention to a likely appeal that could determine the future of cardroom gaming regulations across California.