California Gambling Laws 2023: A Comprehensive Guide 

Gambling has long been a topic of interest and controversy, and California is no exception. With its vibrant entertainment industry and diverse population, the state boasts a thriving gambling scene. However, it is crucial for both residents and visitors to understand the laws and regulations surrounding gambling activities in California.

California’s gambling laws encompass a wide range of activities, including land-based casinos, online gambling, lotteries, and charitable gaming. These laws play a significant role in shaping the gambling landscape within the state. In this article, we will delve into the various aspects of California’s gambling laws, shedding light on both the legalities and nuances of gambling in the Golden State.

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Examining the Current State of Gambling Laws in California

• 📜 California Gambling Laws (2023) – The latest laws in California support land-based gambling, lottery, and charitable gaming. Online gambling, however, remains illegal except for advanced-deposit horse race betting. 
• 🎰 Land-Based Casinos – There are 60+ tribal casinos and 60+ card rooms across the state, with some of the largest venues located in Temecula, Highland, Lincoln, Cabazon, Brooks, and Pala. 
• 🖥️ Online Gambling – Online gambling, excluding advanced-deposit horse race betting, is largely prohibited in California. Playing at offshore sites could constitute a violation of the California Penal Code. 
• 🏇 Horse Race Betting – Horse race betting is legal in California both in-person at racetracks and online through certain licensed sites. 
• 🏀 Sports Betting – Sports betting in California is restricted to on-site pari-mutuel horse race betting. Off-track betting is not allowed, and a bill to legalize sports betting was voted down by citizens in November 2022.
• 🎱 California Games & Poker – Card rooms in California offer modified versions of popular casino games like blackjack and pai-gow poker, and large poker rooms are operated in tribal casinos. However, there’s no legal way for residents to play poker online.
• 🎟️ Lottery & Bingo – Both are legal in California, with a minimum gambling age of 18. However, most casinos and cardrooms require players to be at least 21 due to alcohol licensing laws.
• 🚫 Prohibited Games – Some games are prohibited, such as games whose outcomes are decided by the spin of a wheel or roll of the dice (e.g., roulette and craps).
• ⚖️ Legal Cases – A significant case involves the Iipay Nation, which attempted to offer online gambling from its reservation but was taken to court by the State of California and the federal government.
• In California, daily fantasy sports (DFS) are legal, although there is no explicit law authorizing them. However, there is also no law prohibiting DFS in the state. This means that residents of California can participate in DFS contests and use DFS apps without legal restrictions.

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Current California Gambling Laws

The gambling landscape in California is a unique tapestry woven with various laws and regulations that dictate how gambling activities, whether land-based or online, should function. A comprehensive exploration of these laws must encompass the four primary areas of interest: land-based casinos, online gambling, lotteries, and charitable gaming. 

Type of Gambling	Description
Land-Based Casinos	Regulated by a set of laws that govern the operation of physical casinos within the state of California. This includes both cardrooms and tribal casinos.
Online Gambling	Governed by regulations that dictate how online gambling platforms can operate within California, which currently does not allow for state-sanctioned online casinos.
Lotteries	Governed by state laws that allow for the operation of state-run lotteries, which contribute to funding for public education.
Charitable Gaming	Includes games such as bingo and raffles, which are legally permitted when conducted by registered charities in accordance with state laws.

This table provides an overview of the main categories of gambling in California and a brief description of how each is regulated.

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Legal Age to Gamble in California

To participate in gambling activities in California, individuals must meet the minimum legal age requirements. The legal age varies depending on the type of gambling:

• Casino Gambling: The minimum age to gamble at tribal casinos and cardrooms in California is 21 years old.
• Lottery: Participants must be at least 18 years old to purchase lottery tickets or claim prizes.
• Charitable Gaming: The minimum age to participate in charitable gaming, such as bingo or raffles, is typically 18 years old.

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California’s Stance on Political Gambling

The political landscape of gambling in California is characterized by an ongoing tussle between tribal casinos and card rooms. This has significantly impacted online gambling legislation, with tribes primarily opposing the legalization of online poker and other forms of gambling due to the potential competition it would pose to their establishments. This political friction is a vital consideration in understanding the trajectory of gambling laws in California. 

Illegal Gambling in California

While California boasts a vibrant gambling scene, there are certain forms of gambling considered illegal within the state’s borders. Illegal gambling refers to any gambling activity not authorized by California’s gambling laws, which can encompass a wide range of activities such as operating unlicensed gambling establishments, participating in unauthorized online gambling, or engaging in betting games whose outcomes are determined by dice or a wheel.

The CGCC, local law enforcement, and the Bureau of Gambling Control are actively involved in cracking down on illegal gambling operations. It’s important to note that while individual players are rarely prosecuted, operating or facilitating illegal gambling is a serious offense and can carry hefty penalties, including fines and imprisonment.

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Popular Casino Games in California

In California, some of the most popular casino games include poker, blackjack, and what are colloquially referred to as “California Games”. 

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California Casinos and Their Impact

Tribal casinos have a significant impact on California’s economy and legislation. As of 2023, there are 72 tribal casinos spread across 30 counties. These establishments not only boost local economies through job creation and tourism but also contribute a sizeable portion of their revenues to state coffers, thus influencing legislation.

County	Prominent Tribal Casino
Riverside	Pechanga Resort Casino
San Bernardino	San Manuel Indian Bingo & Casino
Placer	Thunder Valley Casino Resort
Riverside	Morongo Casino, Resort & Spa
San Diego	Barona Resort & Casino

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California Gaming Regulations And Statutory Requirements

California, being the most populous state, offers a diverse landscape for gaming activities, from tribal casinos to other betting establishments. Ensuring integrity, the state has put into place stringent regulations and statutory requirements to oversee and license these operations, all while ensuring the welfare and interests of its citizens.

Regulatory Oversight

TRIBAL GAMING

Governing Structure: The California Gambling Control Commission, as of January 2023, confirms that California has established gaming compacts with 76 tribes. Additionally, Secretarial Procedures have been put in place with four other tribes. Out of these, 64 tribes are responsible for the operation of 67 casinos scattered across the state.

Compact Models: Although each compact with the tribes has its own distinctive features, three primary models can be identified:

• 1999 Compacts: Here, tribes faced a restriction of approximately 2,000 Class III gaming machines.
• 2004 Compacts: This allowed tribes the flexibility to manage an unlimited number of Class III gaming machines.
• 2012 Compacts: These compacts had varying permissions, with certain tribes even permitted to operate more than 2,000 Class III machines.

Regulation Mechanism: Tribal casinos in California are jointly regulated by the state and the respective tribes. The tribes maintain the integrity of their casinos through dedicated tribal commissions, ensuring adherence to both local rules and the state compacts. Additionally, the state’s gaming commission plays a pivotal role in the regulation process, including overseeing the inspection of gaming facilities and assessing the suitability of applicants. As a standard, these compacts generally span a duration of 20 years.

Licensing

TRIBAL GAMING

Source of Information: The information presented here is predominantly derived from the Fort Independence Indian Community of Paiute Indians.

Collaborative Process: Licensing is a cooperative endeavor where both the tribes and the state play crucial roles. While tribes are responsible for granting licenses, it’s the state’s duty to evaluate the appropriateness of the applicants.

Gaming Resource Supplier: This refers to any individual or entity anticipated to provide, either directly or indirectly, gaming resources of a value equal to or exceeding $25,000 to a gaming operation or facility within a year. However, there are exclusions for those providing equipment not specifically designed for gaming purposes and under certain conditions. Licensing fees related to tribal gaming are determined by tribal gaming agencies, and such fees aren’t explicitly specified in the tribal-state gaming compacts or tribal gaming laws.

Management Contractor: This is essentially a Gaming Resource Supplier with whom a tribe enters into an agreement for managing any gaming activities or facilities. As with the Gaming Resource Supplier, licensing fees are set by the tribal gaming agencies and are not explicitly outlined in the gaming compacts or ordinances.

Taxation & Tribal Revenue Sharing

Tribal Gaming Revenue Allocation

Tribal gaming establishments in California contribute to three primary funds:

• Revenue Sharing Trust Fund (RSTF)
  • A total of 31 tribal entities contribute to this fund.
  • The RSTF allocation system hinges on a sliding scale, determined largely by the quantity of slot machines a tribe operates.
  • For instance, compacts originating from 1999 imposed varying payments, while those from around 2004 primarily demanded a standard $2 million fee. More recent compacts have introduced alternate methods of determining RSTF contributions.
• Special Distribution Fund (SDF)
  • This fund sees contributions from 38 tribal groups.
  • The 1999 compacts implemented a payment structure linked to the number of slot machines run by a tribe. However, a significant number of agreements inked post-2004 and subsequently don’t necessitate SDF contributions, albeit with certain exceptions.
• General Fund
  • Only one tribe contributes directly to the state’s General Fund.
  • While the 1999 compacts did not mandate payments to this fund, those drafted around 2004 did. Yet, following legal rulings, such as the Rincon decision, newer compacts often exclude contributions to the General Fund.

Highlighting Specific Compacts

The 1999 Compacts outlined the following fee structure for the RSTF based on slot machine count:

• 1-350 slot machines: $0
• 351-750: $900 per machine
• 751-1,250: $1,950 per machine
• 1,251-2,000: $4,350 per machine

Meanwhile, payments into the SDF under these compacts were:

• 1-200 machines: 0% of net win
• 201-500: 7% of net win
• 501-1,000: 10% of net win
• 1,001 or more: 13% of net win

Case Study: Agua Caliente Band of Cahuilla Indians

This tribe has a distinct compact that necessitates payments to both the RSTF and the SDF. For instance, the payments to the RSTF vary from 6% to 11% of the net win, depending on the number of gaming devices. The SDF payment model they follow is slightly complex, based on an annual Budget Act which determines the costs under the compact.

Utility of the Collected Revenue

The state ensures the judicious use of the accumulated revenue:

• The RSTF is administered by a state gaming agency, which disperses the collected funds quarterly. Each non-gaming or limited-gaming tribal group receives $1.1 million annually from the RSTF.
• The SDF is allocated for various purposes:
  1. Gambling addiction treatment programs
  2. Support for state and local entities affected by tribal gaming
  3. Compensation for state’s regulatory expenses
  4. Emergency response services related to tribal gaming
  5. Other purposes that align with the Indian Gaming Regulatory Act (IGRA)

Additionally, the General Fund fuels vital state initiatives, spanning from K-12 education to environmental protection.

Mandates on Tribal Gaming Revenue Utilization

As per IGRA stipulations, tribes are obliged to channel their gaming revenues towards:

1. Tribal governance operations and programs
2. The general welfare of tribe members
3. Tribal economic enhancement
4. Charitable donations
5. Operations of local government bodies

Additional Notes

While reviewing multiple compacts, there wasn’t a clear indication of promotional credits influencing the net win. Additionally, federal legislation might compel tribal casinos to issue W-2G forms to winners and potentially withhold winnings under specific circumstances.

Responsible Gaming

TRIBAL GAMING

• Statutory Funding Initiative: Funds drawn from the tribal-specific Special Distribution Fund are earmarked primarily to support and provide resources to individuals grappling with gambling-related issues within California.
• Self-Exclusion Mechanism: Contemporary agreements necessitate tribal gaming sectors to integrate self-exclusion mechanisms. Joining these programs implicates a cessation of promotional communications, withdrawal of casino-related benefits, restriction from obtaining credit or utilizing check cashing amenities, and a comprehensive ban from accessing the gaming facilities.
• Prohibition on Complimentary Alcoholic Beverages: The provision of free alcoholic beverages by tribes in their establishments is strictly prohibited.
• Mandate on Ethical Advertising: Updated agreements dictate that all promotional content related to tribal gaming should encompass messages advocating responsible gaming. Moreover, these messages should also feature a toll-free helpline for those facing gambling dilemmas. It’s pivotal for the tribal gaming advertisements to remain transparent, devoid of any deceptive or misleading information.
• Visibility of Assistance Information: Recent accords require tribes to strategically position signs with a toll-free helpline for gambling assistance. Such signage should be easily noticeable, especially around ATMs.
• Underage Gambling Deterrence: The minimum age threshold to partake in tribal casino activities stands at 21 years.
• Operational Tenure: Tribal casinos have the liberty to remain operational even during public holidays.

Other Regulations

TRIBAL GAMING

• Evaluation Prerequisites: Any gaming apparatus must receive validation from a third-party assessment facility, which is not only endorsed by the tribal gaming authority but also acknowledged by the state’s gaming body.
• Anti-Money Laundering (AML) Standards: In line with U.S. federal directives, commercial and tribal gaming establishments, along with card clubs, are obliged to uphold specific regulations aimed at curtailing money laundering and associated financial malefactions.
• Shipping Protocols: The U.S. federal mandate dictates that all shipments containing gambling apparatus must be transparently labeled. This facilitates easy identification of both sender and recipient, as well as the package contents upon inspection.
• Political Contribution Limitations: As per federal guidelines, tribes are recognized as “entities”. Hence, their political contributions come under the purview of the Federal Election Commission.
• Facility Credits: While tribes hold the prerogative to extend credit facilities, it’s noteworthy that not every tribal gaming entity offers such services.
• Tobacco Consumption Norms: Tribal casinos are exempted from California’s stringent anti-smoking regulations, permitting them to provide designated smoking areas.
• Digital Transaction Modalities: While there’s no explicit ban on cashless wagering in California, the compacts allow tribes to independently decide on such systems. However, California stands firm on not endorsing cryptocurrencies, specifically Bitcoin, for gambling-related purchases, including raffle tickets.

Sports Betting

At present, the state of California has not legalized sports betting, keeping it outside the purview of permissible gambling activities.

Conclusion

Understanding California’s gambling laws is crucial for anyone interested in engaging in gambling activities within the state. From tribal casinos and cardrooms to online platforms and state-run lotteries, the landscape is intricate, with each aspect governed by specific legal parameters. Given the ongoing political debates and changing societal attitudes towards gambling, the future may hold significant changes to these laws. Hence, for both residents and visitors, being abreast of these laws is paramount for a safe and legal gambling experience in California.

Sources:

• International Association of Gaming Regulators
• US Department of Justice (January 24,2020)
• https://www.americangaming.org/state/california/

Frequently Asked Questions (FAQs)