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California cardrooms have operated for decades under a distinct legal framework that prohibits “banked” casino games such as traditional blackjack outside of tribal lands, while allowing cardrooms to offer player banked games under California Penal Code § 330. To comply with these restrictions, cardrooms developed alternative game structures and relied on third party proposition player services, or TPPPs, to rotate the player dealer role, allowing games that resembled blackjack without the cardroom acting as the bank.

For years, California Indian tribes, who hold exclusive rights to operate banked casino games under tribal state compacts, have argued that these cardroom games unlawfully encroach on tribal exclusivity. This disagreement has fueled ongoing litigation, regulatory pressure, and political debate between cardrooms, tribes, cities, and state regulators.

Regulation Change

On February 6, 2026, California Attorney General Rob Bonta announced that the Office of Administrative Law approved two long pending California Department of Justice regulations governing cardroom operations. The regulations were finalized without substantive revision and will take effect on April 1, 2026. This marks a significant shift in how cardrooms may lawfully operate their most popular games.

What Cardrooms Were Permitted to Operate

Prior to the approval of these regulations, cardrooms were permitted to offer:

  • Blackjack style, player banked games, provided the cardroom itself did not act as the bank.
  • Games supported by TPPPs, which could continuously serve as the player dealer so long as formal rotation rules were technically satisfied.

These structures formed the core revenue model for many cardrooms.

What Cardrooms Can No Longer Operate as of April 1, 2026

Beginning April 1, 2026, the new regulations prohibit or severely restrict:

  • Blackjack and blackjack style games, defined by their mechanics rather than their name.
    • Under the new rules, games may no longer use a target point of 21, include a “bust” feature, award automatic wins for natural blackjacks, or include the terms “21” or “blackjack” in the game title. Wins and losses must instead be determined by which hand is closer to a non 21 target point, fundamentally altering the structure of traditional blackjack style play.
  • The longstanding use of TPPP as continuous banks is no longer permitted.
    • The regulations impose strict player dealer rotation requirements that significantly limit the role of TPPPs. The player dealer position must be offered to seated players before every hand, the role must rotate to at least two non TPPP players every 40 minutes or the game must end, and only one TPPP may be present per table. TPPPs may accept and settle wagers only when they are actively serving as the player dealer. These requirements effectively prevent TPPPs from serving as the primary or ongoing bank for cardroom games.

Cardrooms must eliminate or materially redesign affected games and submit compliance plans to the California Department of Justice by May 31, 2026.

Key Takeaway

The approval of the California Department of Justice cardroom regulations represents a regulatory victory for tribal gaming interests and a turning point for California’s cardroom industry. While litigation and political responses may continue, cardrooms must now prepare for immediate operational changes beginning April 1, 2026.

If you have any questions about the issues discussed in this alert, please contact the authors or the Womble Bond Dickinson attorney with whom you normally work.
 

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