For nearly 30 years, new cardrooms in California were banned. Now, thanks to a deadlocked vote in the state’s legislature, the moratorium has come to an end.
The state’s Bureau of Gambling Control (BGC) is accepting applications for new cardrooms, a move that will no doubt provide a significant boost to a niche economy that’s been around for more than 150 years.
The state currently has 72 card rooms, with many of them located in Los Angeles, the Central Coast, the Bay Area, and the Central Valley.
How the cardroom moratorium ended
This past year, lawmakers voted on a bill that would extend the cardroom moratorium past 2023. The vote ended in a deadlock: 3-3. As a result, the moratorium ended.
Lawmakers’ inability to vote decisively meant that, for the first time in more than two decades, California cardrooms could open. The California Gambling Control Commission wrote in a September 2022 memo:
“Historically, the Legislature extended this moratorium on the expansion of gambling. However, a bill to extend the moratorium did not pass by the end of the 2022 legislative session. As a result, the existing moratorium, as currently constituted by Business and Professions Code sections 19962 and 19963, expires on January 1, 2023.”
Why the moratorium started
Back in 1995, one of lawmakers’ main concerns about cardrooms was enforcement. Proponents of the business pointed to the economic benefits. Opponents of cardrooms said the economic benefits were so great, local governments had very little incentive to enforce cardroom laws.
For example, the state’s attorney general and an assemblyman wrote the following passage in a 1996 issue of the California Redevelopment Association journal:
“The overwhelming evidence has pointed to the incredible lack of local enforcement. Local officials either cannot afford the oversight that is necessary to ensure cleanly run card rooms or are attempted to ‘look the other way’ as card rooms become cash cows for the city’s coffers.”
What this means for California cardrooms
Simply put, the Gambling Control Commission (GCC) and BGCl can now work together to process California cardroom applications and award licenses.
For new cardrooms, this means that entrepreneurs and business owners can apply to open a new cardroom. The application process is a thorough one. And it includes an in-depth background investigation that focuses on the applicant’s suitability in several areas:
- General character
- Financial history
- Criminal history
In addition to passing a background check, the applicant’s cardroom must mesh with state and local rules and ordinances related to cardrooms. For example, just because the moratorium is lifted does not mean a cardroom can open in a city that bans cardrooms.
Growth of cardroom industry could positively impact the economy
California’s cardrooms have contributed hundreds of millions of dollars to state and local economies through tax revenue. According to the California Gaming Association, a cardroom advocacy group, the state’s cardrooms:
- Employ more than 32,000 people
- Have paid out more than $1.6 billion in wages
- Paid nearly $500 million in state and local taxes
- Created more than $5.5 billion in economic output
Adding just one cardroom to a local community can provide a significant economic impact.
For example, Bell Gardens has one cardroom: the Parkwest Bicycle Casino. In the nearly 40 years the cardroom has been open, it’s generated more than $300 million in total economic impact and provided 1,861 jobs.