SACRAMENTO, Calif. – California regulators have agreed to a $43.3 million settlement to resolve a class‑action lawsuit alleging the state charged cardrooms and related businesses fees that exceeded what state law allows.
The settlement, announced this week, covers individuals and companies that operated cardrooms or provided proposition‑player services between 2005 and 2020. Those services — in which third‑party companies act as the “bank” in certain card games — are unique to California’s gambling structure. State officials did not admit wrongdoing.
Class members will receive payments based on the regulatory fees they paid during the 15‑year period. The settlement amount does not include attorneys’ fees or administrative costs. Claims must be filed within 60 days of the settlement notice.
Industry Says Case Highlights Regulatory Strain
The lawsuit has renewed debate over how California regulates its non‑tribal gambling sector. Cardrooms operate under a different legal framework than tribal casinos and often face tighter margins. Industry groups say excessive fees and regulatory pressure can threaten jobs, local tax revenue and the viability of smaller venues.
The settlement comes as the cardroom industry faces separate legal challenges. A recent court ruling temporarily blocked new regulations that operators say could undermine the core of their business model. The judge signaled regulators may have exceeded their authority, strengthening the industry’s position in ongoing negotiations with the state.
For years, cardroom operators have argued that their games comply with California law, even as tribal governments and regulators have questioned whether certain offerings violate constitutional limits on house‑banked games.
Future Fee Structure Still Uncertain
While the settlement resolves one dispute, operators say major questions remain about how fees will be assessed going forward and whether additional reforms are needed to prevent similar conflicts. The broader issue of how California balances the interests of tribal casinos, cardrooms and state regulators continues to loom over the market.
The settlement also arrives as lawmakers consider other gambling‑related measures, including proposals that could reshape the economics of racinos and cardrooms statewide.
