California Cardrooms Score Legal Win as Court Strikes Down Tribal Lawsuit

Chavdar Vasilev is a journalist covering the casino and sports betting market sectors for e66. He joined e66 in May 2025 and reports on industry-shaping stories across the US and beyond, including legislative debates, market... California’s cardrooms scored another legal win in their long-running tug-of-war with Native American tribes as a Sacramento Superior Court judge ruled that the tribes’ lawsuit under Senate Bill 549 is preempted by federal law. In a tentative ruling issued October 10, Judge Lauri A. Damrell sided with dozens of cardroom operators—including Commerce Casino, Hawaiian Gardens, and Hollywood Park. She concluded that the tribes’ suit is “preempted by the Federal Indian Gaming Regulatory Act (IGRA)” and that “severance cannot resolve IGRA preemption.” Although the ruling was tentative, Judge Damrell stated during the hearing that she would adopt her decision as the court’s order, pending possible appeals. That means it would take immediate effect unless modified or overturned. She noted that higher courts may ultimately decide the matter. Judge Damrell stated that she “may be wrong” but welcomed “guidance from the Court of Appeal.” The tribes had sued under SB 549, a 2024 law known as the Tribal Nations Access to Justice Act. The Act allowed federally recognized tribes to sue California cardrooms and third-party proposition player services (TPPPS) for allegedly offering “banked” games in violation of tribal exclusivity rights. Law firm Munger, Tolles & Olson (MTO), representing the cardrooms, called the ruling a landmark victory. “We are gratified by the court’s decision today in support of the cardroom industry’s position and in resolving this highly complex and important dispute,” said John L. Schwab, partner at MTO. The firm said the ruling reaffirms that federal law—not state-enacted statutes like SB 549—governs gaming tribal rights, particularly the scope of tribal-state compacts under IGRA. The California Gaming Association, the trade association for California’s cardroom industry, also released a statement: “Cardrooms for many decades have proudly operated lawful games with full transparency and stringent oversight … Our member cardrooms will continue to support good jobs, vital public services, and local economies across California.” The October 10 decision marks the second significant ruling by Judge Damrell in favor of cardrooms in recent months. In August, in another tentative ruling, the same court concluded that tribal plaintiffs—including the Agua Caliente e66 of Cahuilla Indians and Rincon e66 of Luiseño Indians—could not sue under SB 549 because the law conflicted with IGRA for defining and enforcing tribal gaming rights. The October decision builds directly on the earlier ruling. It formally adopts the same reasoning while adding procedural weight. The court reaffirmed that disputes over gaming must be resolved through federal compact processes, not through new state laws. Judge Damrell reiterated that the tribes’ claims under SB 549 “fall squarely within IGRA’s preemptive scope.” In her ruling, she wrote:“Notwithstanding the Legislature’s attempt to resolve this issue, this Court is bound by federal preemption and lacks jurisdiction to resolve this dispute.” She added that the law “grants a cause of action exclusively to gaming Tribes, allows those Tribes to vindicate tribal gaming rights, and mirrors remedial provisions previously found in tribal-state compacts,” making it effectively an end-run around IGRA’s compacting process. SB 549 was designed to give tribes legal standing to challenge California’s cardrooms. The tribes claimed cardrooms violated their exclusivity to gaming in the state. The law allowed tribes to seek declaratory and injunctive relief against cardrooms “to determine whether a controlled game operated by a licensed gambling establishment … constitutes a banking card game that violates state law, including tribal gaming rights.” Tribes argued that SB 549 provided them with “access to justice,” as existing state laws did not permit them to challenge cardrooms directly. Their filings claimed: “Under tribal-state compacts, California Indian tribes have bargained with the State (and pay) for a gaming system that facilitates their exclusive right to offer such banked games.” However, Judge Damrell countered that IGRA already defines the process for resolving disputes between sovereigns—namely, tribes and states—through compact negotiation and federal oversight. “California Tribes are not like persons or businesses in California—they are separate sovereigns with a unique legal status. IGRA exists, in part, because of that unique status and provides the process for negotiating and enforcing their gaming-related rights.” She found that SB 549 “interferes with the compacting process set forth by Congress” and therefore cannot preempt them. The conflict traces back to California Penal Code § 330, which has prohibited “banking” games since the 1800s. In 2000, California gave exclusivity over casino games to the tribes through Proposition 1A. At the same time, the state gave cardrooms a compromise by allowing them to use TPPPs. TPPPs are independent companies that “bank” games such as blackjack or baccarat on behalf of players, rather than the house. Over time, various laws have expanded the offerings of cardrooms to include games such as blackjack and baccarat. The tribes have long argued that cardrooms are illegally offering casino games. The California Nations Indian Gaming Association (CNIGA) has repeatedly claimed that cardrooms’ use of TPPPs “violates both the letter and spirit of California’s gaming laws.” In 2016, the tribes sued cardrooms, but the US District Court dismissed their case. The court ruled that they lacked the necessary standing (sovereignty) to bring the lawsuit. Meanwhile, in 2022, the cardrooms sued back, challenging a ballot measure initiated by the tribe to legalize sports betting. SB 549 aimed to give the tribes the sovereignty that they lacked, according to the court. However, the court’s latest ruling leaves the status quo intact. Even as the courts have sided with cardrooms, state Attorney General Rob Bonta is pursuing changes to cardroom rules. They center around removing TPPPs and essentially restricting blackjack-style games. Bonta proposes that only players sitting at the table can act as TPPPs, not outside vendors. Also, they must rotate every 40 minutes. He also proposes changes to the rules of blackjack-style games, including eliminating traditional “bust” and “push” rules that mirror those found in casinos. The proposed changes have met backlash from the industry, businesses, and local politicians. In one meeting, Hawaiian Gardens Mayor Dandy De Paula told regulators that tax revenue from cardrooms generates over 78% of her city’s general fund. Additionally, a report commissioned by Bonta’s office showed that the changes will result in the loss of up to 3,600 jobs. It will also reduce tax revenue by up to 50% for some municipalities over the next decade. As of mid-October 2025, the AG’s proposal remains pending. Chavdar Vasilev is a journalist covering the casino and sports betting market sectors for e66. He joined e66 in May 2025 and reports on industry-shaping stories across the US and beyond, including...