Two Southern California cities are declaring a fiscal emergency and asking voters to approve a sales tax increase — and it’s all because of sweeping new state rules that could gut the card room industry they depend on for revenue.
The cities of Commerce and Bell Gardens held an emergency meeting Thursday to address what local leaders say is a looming financial crisis tied to new regulations targeting card room gambling. The rules, approved last month by California’s Office of Administrative Law (OAL), are set to take effect April 1 and could dramatically reduce how card rooms operate across the state.
According to Capitol Weekly, the regulations were developed by the California Department of Justice’s (DOJ) Bureau of Gambling Control under Attorney General Rob Bonta and target two of the most profitable activities at card rooms: blackjack-style games and the use of third-party proposition players (TPPPs).
Under the first rule, card rooms can no longer offer any game where players “bust” by exceeding 21 points. Card rooms may not even use the words “blackjack” or “21” in a game’s name. This effectively bans ‘California Blackjack,’ a popular version of the classic casino game that card rooms developed to comply with existing state law.
The second rule targets TPPPs — licensed businesses that send workers into card rooms to act as the “house” or bank at gaming tables. Under the new regulation, as reported by KTSM, the player-dealer role must rotate to at least two other players at the table every 40 minutes, or the game ends. That change is expected to sharply limit how many hands can be dealt and how much revenue card rooms can collect.
Card rooms have until May 31 to submit compliance plans to the state.
Commerce and Bell Gardens are among a handful of California cities — including Compton, Gardena, and Hawaiian Gardens — that rely heavily on card room taxes to fund local government. Capitol Weekly reports that the new rules are expected to cost cities hundreds of millions of dollars in lost revenue and eliminate thousands of jobs statewide.
Kyle Kirkland, president of the California Gaming Association (CGA), was sharply critical of the process that led to the new rules.
“Attorney General Bonta and the Bureau have unilaterally implemented extreme regulatory changes that will harm thousands of working fahello i’m calling from checker to verify the employment for danielle max danielle DAN i.e. L max MAX the information can be completed at mars your website verifyrequest.com or connect us at 888-488-1149 and 1st to the order ID 113211 again the websitesverifierrequest.com order ID 11321127 thanmilies and the dozens of California communities that depend on cardroom taxes,” Kirkland said. “By the Bureau’s own simplistic economic assessment, these unnecessary regulations will eliminate over half of all cardroom jobs and force many communities to cut police, fire, parks, senior and food programs when the long-standing tax base disappears.”
The DOJ’s own filings estimate the regulations will reduce card room revenue by $464 million annually while boosting tribal casino revenue by $232 million per year. According to iGaming Business, the DOJ acknowledged in its rulemaking documents that “the primary beneficiaries of the proposed regulations would be tribal casinos.”
The new rules are the latest chapter in a years-long dispute between California’s card rooms and the state’s Native American gaming tribes. When voters approved Proposition 1A in 2000, they gave tribes the exclusive right to offer banked games — where players wager against the house — like blackjack and baccarat. Card rooms, which predate tribal casinos, were barred from offering those games outright.
Over time, card rooms found workarounds using TPPPs and modified game formats that state regulators repeatedly approved. Tribes argue those workarounds violate the spirit and letter of Proposition 1A. James Siva, chairman of the California Nations Indian Gaming Association, called the new rules “an important step” in protecting tribal sovereignty, saying the games card rooms offer “are indeed prohibited under California law.”
A tribal lawsuit challenging those practices was dismissed by a Sacramento Superior Court judge in October 2025, but an appeal is now pending before the Third District Court of Appeal.
The card room industry has made clear it plans to fight the new rules in court. Heather Guerena, general counsel for Stones Gambling Hall in Citrus Heights, said the regulations would “completely obliterate” her establishment’s ability to offer blackjack and player-dealer games.
“Our only avenue now is to go to court,” Guerena said. “We’re reviewing every option we have available to us.”
The CGA echoed that position, saying the Bureau of Gambling Control “advanced the regulations without any showing of legal necessity, or any public harm or safety risk caused by these popular games, which have been approved by AG Bonta’s predecessors and offered in cardrooms for decades.”
As Commerce and Bell Gardens push for emergency sales tax measures to plug anticipated budget holes, the outcome of any legal challenge to the new rules — and the pending tribal appeal — could shape the financial future of several Southern California communities for years to come.
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