Governor Gavin Newsom has enacted a significant piece of legislation that grants California’s casino-owning tribes a potent new tool against their competitors in the gambling industry. According to ABC10, by signing Senate Bill 549, tribes can now seek judicial resolution for their long-held grievances against the state’s card rooms, which they accuse of illegally hosting games like blackjack and pai gow poker.

Economic and social implications of the new legislation:

This development caps off one of the most fiercely contested and costly political battles of the legislative session, with potential ramifications for both the local economies and public services across the state. Many California cities, which derive substantial revenue from taxes on cardrooms, could face financial peril if the tribes prevail in their legal challenges. Some municipalities rely on these revenues for up to half of their budget, funding critical services such as police and firefighting.

The heart of the dispute lies in the interpretation of the rights granted to tribes by California voters, who, tribes assert, have vested them with exclusive authority over the contested table games. Historically, due to their sovereign status, the tribes had lacked the legal standing necessary to directly challenge the approximately 80 privately owned card rooms scattered throughout the state.

As the legislative wrangling intensified, both sides opened their coffers, pouring millions into lobbying efforts and campaign contributions to influence lawmakers. As CalMatters reports, the Hawaiian Gardens Casino in Los Angeles County alone reported spending $9.1 million on lobbying activities last year, a figure surpassed only by the spending of Chevron Corp. Moreover, the gambling sectors collectively contributed at least $4.3 million to the state legislators since January 2023, according to the Digital Democracy database, with the tribes outspending their counterparts by a significant margin.

In the lead-up to a crucial vote in July, tribes donated $92,000 to members of an Assembly committee overseeing gambling regulations, underscoring their financial commitment to securing legislative outcomes favorable to their interests. Over the years, tribes have also significantly supported Governor Newsom’s political endeavors, contributing at least $7.1 million since his 2017 gubernatorial campaign, compared to the $252,400 contributed by card rooms.

Governor Newsom’s commitment to tribal rights:

On a broader scale, Governor Newsom has consistently advocated for the rights and welfare of native communities. His administration has made gestures of reconciliation and support, such as returning lands and removing impediments to tribal progress like the Klamath River dams. Commemorating the 57th annual California Native American Day, Newsom also signed additional tribal-supported bills aimed at integrating Native American perspectives into educational curricula and facilitating traditional land-management practices through controlled burns.

However, the new gambling legislation has met with resistance from several quarters. Municipalities like San Jose and smaller cities such as Hawaiian Gardens and Commerce fear the economic repercussions of losing card room revenues. These cities, heavily reliant on the financial contributions of card rooms, contend that reduced gaming opportunities could necessitate cuts in essential public services.

Despite the controversy, supporters of the bill argue it represents a step towards rectifying historical injustices suffered by tribal communities and aligning state policies with tribal sovereignty and economic interests.