California Card Rooms Prepare Reopening Safeguards, Tensions Mount Between Casinos and Governor

Posted on: May 18, 2020, 01:03h. 

Last updated on: May 18, 2020, 02:25h.

Ed Silverstein @casinoorgedsilv Read More

Expertise: Legal, Tribal Gaming.

California card room executives are eager to see the venues reopen soon after months of closures from the coronavirus pandemic, and are working on developing appropriate precautions.

All 66 operational card rooms in the state voluntarily closed in mid-March. Now, the gaming properties and the California Gaming Association (CGA) industry group are trying to get card rooms reopened “as quickly as possible without jeopardizing the health and safety of … guests and employees,” CGA President Kyle Kirkland recently told Casino.org.

He added that safety is a key consideration to any reopening plan. “The industry is discussing a variety of protocols, including capacity management, guest and employee health testing and disclosures, cleaning and sanitation procedures, cash and chip handling, and management and other operating concerns,” Kirkland explained.

There is no specific reopening date for the card rooms. It now appears Gov. Gavin Newsom’s reopening strategy would include card rooms in the third phase of the reopening process, and card rooms are developing appropriate precautions.

“The industry is [currently] working on reopening health and safety protocols for consideration by state and local regulatory officials when and if it is allowed to resume operations,” Kirkland said.

He points out that the gaming properties employ over 32,000 workers. Dozens of communities rely on gaming tax revenue from the card rooms to fund local emergency services, housing, and homeless assistance, Kirkland said.

Additionally, Newsom’s office deferred some deadlines for card rooms, “but has yet to address our request for financial and regulatory relief similar to that granted to other industries,” Kirkland said.

California Gaming Association Writes to Newsom

The CGA recently wrote to Newsom to request a “refund of overpayments by cardrooms into the state’s Gambling Control Fund,” Kirkland said. Before the pandemic, California’s state auditor’s office said the Gambling Control Fund was projected to end the fiscal year with a surplus of $97 million “due to excessive and possibly unlawful fees levied on the industry, an amount which comprises five times the combined annual budgets of the California Gambling Control Commission and the Bureau of Gambling Control,” Kirkland said.

“We are asking for these funds to be refunded back to help mitigate the costs that are needed to be able to eventually reopen. This refund would have no impact on the state’s budget or general fund — these are overpayments by cardrooms sitting unused in the Gambling Control Fund,” Kirkland said.

Also, most of the state’s card rooms are “small businesses that are highly dependent on ongoing operating revenue for survival,” Kirkland continued. “Even larger cardrooms have been severely and perhaps permanently harmed by the unprecedented extended revenue loss and ongoing expenses such as payroll and insurance costs, rent, and other ongoing fixed costs.”

In addition, the industry was initially left out of the federal CARES Act Payroll Protection Program and only recently became eligible to apply for federal relief funds, Kirkland said.

When reached for comments, Tiffany Conklin-Lichtig, principal of California Gaming Advisors and previously a member of the California Gambling Control Commission, said the “entire card room industry has suffered enormously as a result of the closures.

Card rooms are state licensed and regulated and will not be allowed to resume operating, regardless of what individual cities and counties decide, until Governor Newsom’s order is modified or lifted,” Conklin-Lichtig told Casino.org.

As far as tribal casinos located in California, they “are not required to follow Governor Newsom’s or county health official orders or protocol for reopening because tribes maintain sovereign decision-making authority on their lands. The more important question is whether these tribes will be adhering to guidance that tracks with what will be required of similarly situated businesses like restaurants, card rooms, and hotels.”

Newsom has asked that some tribal casinos reconsider their planned reopenings in coming days and weeks. The Cahuilla Band of Indians and Soboba Band of Luiseno Indians plan to reopen their gaming properties on May 27. The Pechanga Luiseno Indians want to resume gaming on or about June 1.

Two tribal casinos in the San Diego region reopened Monday, KNSD reported. The Viejas Casino & Resort and Jamul Casino reopened with safeguards in place.

Two other venues are likely to reopen later this week. Win-River Resort and Casino in Redding reopened this weekend.

When reopened, tribal casinos could require face masks be worn, workers and players to get temperature checks, distancing be kept between people, and limits in place on the number of guests allowed in the venues.

Closures at Tribal Casinos Hurt Local Communities

Overall, tribal casinos in California have faced a significant impact from the closings, according to Katherine Spilde, a professor at L. Robert Payne School of Hospitality & Tourism Management at San Diego State University.

“The closures have had a profoundly negative impact on over 30 years of continuous economic and social recovery across Indian Country,” Spilde, a former director of research at the National Indian Gaming Association, told Casino.org. “For many tribal governments, tribal gaming revenues are a critical component of their tribal budgets, and the closure of the entire tribal gaming industry represents an unprecedented economic shock.

Even with tribal gaming facilities closed, tribal governments must continue to offer health care, education, housing, law enforcement and other critical services,” Spilde explained. “Tribal leaders are essentially dealing with all the challenges of a state governor facing severe revenue shortfalls while also addressing the payroll and healthcare needs of employees, as many CEOs are doing.”

She said that tribal leaders and casino operators across the region “are putting safety first. Unlike traditional businesses, tribal gaming facilities are located where the owners, the tribal members, live.

“Inviting employees and guests into tribal communities to visit gaming properties is no small decision. Tribes are seeking training in contact tracing and other public health best practices to ensure that they are opening in ways that puts safety first. There is a deep culture of caring in Indian Country, and I have no doubt that is the driving framework behind each tribe’s decision about when and how to reopen.”