Several days after temporarily halting California’s new, controversial cardroom regulations, Judge Richard Darwin snuffed them out, arguing that they exceed the Bureau of Gambling Control’s legal authority. This is great news for cardrooms, which were wary of the new rules.
The Bureau of Gambling Control Tried to Crack Down on Cardrooms
The rules in question were introduced by AG Rob Bonta and the Bureau of Gambling Control. The new regulations would have prevented cardrooms from offering some of their most popular games, dealing a significant blow to their business model.
For reference, California prohibits anyone but state tribes from offering banked gambling. However, cardrooms circumvent this by employing third-party player-dealers and offering games that fit the local regulatory framework.
These games have had their fair share of controversy and have often been criticized by the local tribal gaming sector.
AG Bonta’s regulations would have jeopardized the player-dealer model and would have banned blackjack derivatives, which are cardrooms’ most popular offering. In response, the California Gaming Association warned that these regulations would not only hurt the cardroom sector but would also ruin entire local economies.
The New Regulations Exceeded the Bureau’s Authority
The California Gaming Association initiated “legal remedies” in hopes of convincing authorities to change their mind. It argued that the AG and the Bureau of Gambling Control did not have the authority to rewrite California’s broader gaming policy, which is what the new regulations effectively do.
After initially halting the new regulations, Judge Darwin has now concluded that the Bureau of Gambling Control exceeded its legal authority by introducing the new regulations. He argued that the regulatory body lacked the authority to impose such statewide sanctions.
This ruling effectively stops the new regulations, providing cardrooms with some breathing space. In response to the ruling, Kyle Kirkland, president of the California Gaming Association, said:
This case is about whether the Attorney General and his regulators can bypass the Legislature and unilaterally rewrite decades of established law. The Court delivered a clear answer: they cannot.
Kyle Kirkland, president, CGA
Judge Darwin’s ruling means that future policy decisions of such scope must first pass the Legislature. However, the California Department of Justice could still try to appeal this decision.