Card club owners fear gambling regulations could force them to fold on blackjack-type games
A single mother, Carolyn Uzeta worked her way up over 18 years from cocktail waitress at the Gardens Casino in Hawaiian Gardens to the card club’s manager of training and development.
“I saw gaming as something I could be good at,” Uzeta said as she dealt cards for blackjack poker, a variation on the traditional game of 21. “So, I practiced and I practiced and I practiced.”
But Uzeta and card club workers across the state may have to practice something different or even find new work if California gambling regulators follow through with new restrictions on some of the clubs’ most popular table games.
The state Bureau of Gambling Control is holding public workshops on new card club regulations but has provided no details on what changes might be under consideration or what sparked the need to consider new rules.
That has caused an uproar among operators of the state’s 66 card clubs, which employ 23,000 workers and generate an estimated $300 million in local, state and federal taxes annually. The operators say they fear that if the new regulations are too tough they could put an end to games that represent up to 70 percent of their business.
"I’m more than positive that they’re all worried,” Ron Sarabi, general manager of Gardens Casino, said of his fellow card club operators.
What makes card club managers most anxious is that they don’t know what changes state gaming regulators are considering, except that they are looking at adopting new rules for the third-party businesses that act as the “banks” in card games.
Bureau of Gambling Control Director Stephanie Shimazu said the agency is still merely gathering information. The hearings continue through March.
“We are in the very early stages,” Shimazu said after a November workshop at a hotel near Los Angeles International Airport. “We haven’t drafted anything.”
In traditional casinos in Las Vegas and on Indian lands, players at a card table try to win money from the casino, which is represented by the dealer. The dealer takes the bets and deals the cards, then rewards the winners and collects from the losers.
In California, state law prohibits card clubs from having any financial stake in the outcome of the card games that take place in their establishments. Only Indian casinos are allowed to do that in the state.
To abide by the law, many card clubs in the state invite into their casinos third-party businesses that employ people to act as “bankers” for each table. These businesses are called “third-party providers of proposition players” and they are licensed by the state.
Although the dealer still deals the cards at card clubs, the players bet against the third-party banker, who also sits at the table behind a rack of chips. The banker, not the casino, pays winners and collects from losers.
Card clubs generate revenue by collecting a fee from each player during each hand. The fee is based on the bet limit at each table.
The Bureau of Gambling Control has accepted the use of third-party bankers as long as the banking role is offered to other players at each table after two hands are dealt _ and then again two hands later on a continuing basis. (The offer is more elaborate theater than business opportunity; the players, who are mainly interested in gambling rather than banking, are unlikely to accept.)
Card club operators say they fear that the bureau may put an end to that agreement, and they suspect state regulators are acting under pressure from Indian tribes, which have long argued that only the tribes have the legal right to operate casino-type games in the state.
At the Gardens Casino, about 40 percent of its revenue comes from games involving a third-party banker, such as blackjack poker, pai gow poker, baccarat and Ultimate Texas Hold ‘Em. In other card clubs, up to 70 percent of operations involve games that rely on third-party bankers.
Card clubs also offer traditional poker, where the players bet against each other, and clubs charge a fee for overhead costs.
The turmoil comes as gambling businesses find themselves on a roll with the help of a robust national economy.
California leads the nation with 63 tribes that run gambling operations. Revenue from those operations in 2015 _ a record $7.9 billion _ represented the sixth straight year of growth, according a report by Alan Meister, an economist with Nathan Associates Inc.
Indian casinos and card clubs have been investing their profits on expansion, adding facilities including hotels, restaurants and spas.
In Bell Gardens, the Bicycle Casino opened a $50-million hotel in 2015 that included a fitness center, an outdoor pool deck, a spa and sauna, plus 9,000 square feet of meeting space for conventions and banquets.
Near Highland in San Bernardino County, the San Manuel Band of Mission Indians broke ground in July on a $550-million hotel adjacent to its San Manuel Casino. The hotel project follows an extensive casino overhaul.
Kyle Kirkland, president of the California Gaming Assn., which represents the state’s card clubs, said if new regulations eliminate the ability of the card clubs to operate banked games, that could kill off a huge source of revenue and put many card club employees out of work.