Cardroom Moratorium Extension Fails in California Senate Committee Tie Vote

A California Senate committee deadlocked on a bill last week that would have extended the state’s moratorium by a year to grant new licenses for cardroom casinos and allow existing ones to expand.

California Senate Governmental Organization Committee Chair Bill Dodd speaks at the beginning of last Tuesday’s committee meeting in Sacramento. The panel voted 3-3 and failed to advance a bill to extend a moratorium on new licenses for cardroom casinos and allow expansions at existing sites. However, Dodd said he believes a new moratorium that would allow smaller cardrooms to expand is possible in the near future. (Image: Senate.Ca.Gov)

The 3-3 vote on Senate Bill 637, with nine members not voting, in last Tuesday’s Senate Governmental Organization Committee hearing meant that the bill did not get a chance to pass the Senate before last Wednesday’s session deadline to pass legislation. The tie vote occurred even though extending the moratorium had support from the tribal gaming community and segments of the cardroom casino industry, two groups that rarely agree on matters.

Without an extension, the moratorium, which has been in place since 1998, is set to end on Jan. 1.

In fact, those two sides are currently battling over Proposition 26, one of two gaming initiatives on the Nov. 8 ballot.

Prop 26 would legalize sports betting at tribal casinos and allow those casinos also to offer roulette and dice-based table games. However, cardroom casinos have raised nearly $42 million to oppose the measure because it would also allow tribes and other entities to use the state’s Private Attorney General Act to take entities to court over allegations of illegal gaming activities.

Cardroom casinos believe that portion of the measure targets them and could lead to their closure.

Cardrooms Divided on Moratorium

While the lines between cardrooms and most tribes are stark on Prop 26, Ed Manning, a lobbyist representing the California Cardroom Alliance (CCA), said there’s room for an agreement between the sides.

However, that’s not possible at this time.

We think when we get past Prop 26 in November, we can have a better discussion and hopefully a framework,” Manning said. “We (the CCA) support expansion, but not at the expense of the moratorium.”

Susan Jensen, executive director of the California Nations Indian Gaming Association (CNIGA), told the committee that the extension was a thoughtful step to give parties the time needed to discuss the future of the moratorium, which has been in effect since 1998.

“If the current moratorium is allowed to expire this year, the state will face the prospect of unlimited cardroom gaming expansion without properly examining the impact this expansion will have on local communities,” Jensen said.

Not all cardroom casino backers, though, supported extending the moratorium.

San Jose City Councilmember Raul Peralez told the committee that the Northern California city was unable to allow its cardrooms to expand because of the moratorium. The city sought that two years ago, and 73% of voters there supported it.

The expansion would have allowed the city to generate an additional $15 million annually for its general fund.

“We’re not happy to say that we have the most thinly staffed police department of any large city in the country,” Peralez said. “With these additional tables, we could boost our police staffing by an additional 80 officers as soon as next year, and I know many smaller cities across the state could have the opportunity to stabilize or recover from this pandemic as well.”

Dodd: ‘Long Moratorium’ Needed

Committee Chair Bill Dodd (D-Napa) vented some frustration before casting his no vote, noting that previous extensions of the moratorium have failed to lead to breakthroughs. He also lashed out at lobbyists on both sides, claiming the committee has been used as “a pawn” for years. The moratorium and short-term extensions have served as “a continuing employment act” for them.

He also said that ending the moratorium would not lead to a rampant expansion of new cardrooms, adding that it can take three to five years to get a new cardroom established and “nobody in their right mind” would initiate that process now, given where the legislature stands on the issue.

He also told both sides he’s willing to work in the coming months to iron out a deal he can quickly get to the governor early in the next session.

“We need a long moratorium, and I’m open to a long moratorium, as long as they give some reasonable ability for small cardrooms, mostly, to be able to grow,” Dodd said.

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