On September 27th, 2019, California Governor Gavin Newsom signed a bill imposing a moratorium on new cardrooms in the state. The bill, AB 5, was introduced by Assemblymember Lorena Gonzalez and passed both the Assembly and Senate with overwhelming support.

Cardrooms, also known as “California casinos,” are establishments that offer games such as poker and blackjack. Unlike traditional casinos, cardrooms do not have slot machines or other electronic gaming devices. Instead, players compete against each other and the house takes a percentage of each pot as a fee.

The issue with cardrooms in California is that they operate in a legal gray area. While they are technically legal under state law, they have been the subject of ongoing legal battles with Native American tribes who argue that cardrooms violate their exclusive rights to offer certain types of gambling. These disputes have led to tensions between cardroom operators and tribal leaders, as well as between the state and federal government.

AB 5 aims to address these issues by imposing a moratorium on new cardrooms until 2023. During this time, the state will conduct a study to determine the impact of cardrooms on public safety, local communities, and the state’s economy. The study will also examine the legality of certain cardroom practices, such as “player-banked” games where players take turns acting as the dealer.

Proponents of the bill argue that it will provide much-needed clarity and regulation for the cardroom industry. They point out that cardrooms generate significant revenue for the state and provide jobs for thousands of Californians. However, they also acknowledge that there are concerns about the potential for criminal activity and other negative impacts associated with gambling.

Opponents of the bill argue that it unfairly targets cardroom operators and could lead to job losses and economic harm. They also argue that the moratorium is unnecessary given that cardrooms have been operating in California for decades without major incidents.

Regardless of one’s position on the issue, it is clear that the cardroom industry in California is facing significant challenges. The moratorium imposed by AB 5 will give the state time to study the issue and determine the best course of action moving forward. In the meantime, existing cardrooms will continue to operate as usual, but new operators will have to wait until 2023 to enter the market.