New regulations, which were approved in February by the California Department of Justice (DOJ) under Democratic Attorney General Rob Bonta, focus on restricting blackjack-style games and certain player-dealer arrangements that are common in California card rooms.
However, officials in two southern California cities—Commerce and Bell Gardens—are proposing a sales tax increase after both cities declared a fiscal emergency over the new rules, which are set to come into effect on April 1. The two cities say the rules could significantly reduce revenue from card rooms, which are a major source of funding for local government services, according to ABC News.
What Do the New California Card Room Regulations Change?
Under the updated rules, card rooms across California will face new limits on games that closely resemble traditional blackjack or allow players to compete against the house, along with additional restrictions on third‑party proposition players—companies that supply individuals to act as the dealer or banker at tables.
The state DOJ said that these practices blur legal distinctions between card rooms and tribal casinos. Card rooms are supposed to host player‑vs‑player games, while tribal casinos are allowed to run casino‑style games where players bet against the house. The DOJ argues that certain card room practices—such as blackjack‑style games and the use of third‑party proposition players to act as the “house”—have made card rooms operate in ways that look too similar to tribal casinos. In the state’s view, that weakens or muddies the legal boundary between the two types of gambling venues.
However, ABC News reported that Commerce City Manager Ernie Hernandez said that the new regulations will affect jobs and revenue within the entire card industry, statewide, saying: “The Attorney General’s own fiscal analysis says it projects up to a 50 percent loss of jobs and revenue for the card room industry.”
Why Commerce and Bell Gardens Are Declaring a Fiscal Emergency
Both Commerce and Bell Gardens rely heavily on card room tax revenue to fund essential public services.
Bell Gardens City Manager Michael O’Kelly said that card rooms “generate over $17 million in card room taxes annually for our city, which is more than 40 percent of our entire general fund,” according to ABC News. Losing that revenue would impact “the services that our residents depend on every single day,” such as police, parks, crossing guards, and community services.
Commerce officials said similar revenue losses would force cuts to public safety and municipal operations.
City managers from both cities argued that the regulations were implemented without adequate consideration of the financial consequences for local governments.
Proposed Sales Tax Measures Headed to the Ballot
According to reporting from the Los Angeles Times, in response, both cities are planning to place sales tax increase measures on the June ballot, proposing a 0.25 percentage point hike. City leaders say the proposed increases are intended to offset a portion of the revenue losses expected if card rooms are forced to scale back operations or close certain games, once the card room rules take effect.
Broader Debate Over California Gaming Rules
Supporters of the new regulations, including tribal gaming organizations, argue the rules are necessary to address what they describe as unauthorized casino-style gaming in card rooms. They say enforcement is needed to protect the integrity of California’s gaming framework.
City leaders, however, maintain that the changes threaten jobs and essential services in communities that have depended on card rooms for decades.
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