City Officials Are Wary of California’s Blackjack Prohibition

California recently approved significant cardroom changes, opting to ban blackjack and its local derivatives. However, city officials in areas with strong cardroom presence are now fearing financial trouble since they will be deprived of a major source of tax revenue.

Smaller cities, such as Hawaiian Gardens, are in particular danger and risk a major economic stutter.

California Cracks Down on Blackjack in Sweeping Reforms

California’s cardrooms have for years offered player-banked card games. Unlike traditional casinos, where players gamble against the house, player-banked games have a strong peer-to-peer element to them. As a result, they have been able to avoid regulatory scrutiny for years, despite the fact that the state doesn’t permit commercial gambling.

Tribal operators, however, have always seen cardrooms as a thorn in their side, asserting that such offerings undermine their exclusivity. As a result, they have long campaigned against the sector, which they deem to be unlawful.

Recently, Attorney General Rob Bonta and the Bureau of Gambling Control submitted a proposal for major regulatory changes, which was eventually approved by the Office of Administrative Law. Under these new rules, games of twenty-one of all kinds will be prohibited – even the player-banked variations played at California’s cardrooms.

The regulations are set to come into effect from April 1, with cardrooms given until May 31 to present their compliance plans.

However, industry proponents and economic experts believe that this ban could have significant adverse effects on the local economy.

Cities That Depend on Cardroom Revenue Will Be Crippled

As one of the areas with significant cardroom presence, Los Angeles County could be one of the worst victims of the ban, with the Los Angeles County Business Federation estimating that the ban could cause the county to lose more than 5,000 jobs.

Gambling news outlet GamblingInsider spoke with officials of Hawaiian Gardens, the smallest municipality in LA County, to better understand the potential impact of the blackjack ban. The outlet understood that the city could lose as much as 70% of its general fund tax revenue.

Despite its small stature, Hawaiian Gardens hosts The Gardens Casino, which is one of California’s top cardrooms and employs some 1,300 people, generating $13 million in tax revenue a year. This comprises roughly two-thirds of the country’s annual tax revenue, officials said.

Victor Farfan, a member of the Hawaiian Gardens council, confirmed his team’s fears about the ban, which could significantly stutter the local economy. He added that the cardroom taxes support major city services, such as the police, and that shutting down blackjack could also cause significant community harm.

Farfan concluded that this topic is a “matter of economic survival” for Hawaiian Gardens. However, he was certain that his municipality would not be the only affected one. He accused lawmakers of refusing to heed the voice of the public during the rulemaking process, despite the significant concerns raised.

Labor unions have likewise opposed the recent crackdown on cardrooms, with some believing that it is tied to tribal lobbying. Kyle Kirkland, the president of the California Gaming Association, previously vowed to pursue legal remedies.