(AsiaGameHub) –   Two cities in Los Angeles County are seeking voter approval after California altered regulations concerning blackjack at cardrooms. Commerce and Bell Gardens will present residents with a proposal in June for a quarter-cent sales tax increase, as local officials express concerns about potential negative impacts on city budgets and public services.

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Key Takeaways

• Commerce and Bell Gardens are scheduled for a June vote on a local sales tax increase.
• Both municipalities state the measure is intended to compensate for financial shortfalls linked to the blackjack rule changes.
• City leaders have declared fiscal emergencies and voiced criticism of Attorney General Rob Bonta.

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Revenue Pressure Prompts Tax Votes in Two Cities

While the proposed tax increase appears modest, city officials assert that the underlying budget issue is significant. At a press conference on March 26, representatives from both cities indicated that California’s new blackjack regulations have created a substantial deficit in local finances.

Bell Gardens Mayor Miguel De La Rosa stated: “They gave cities like ours the ability to responsibly build our budgets. Now, that foundation is being pulled out from underneath us.”

Bell Gardens city manager Michael B. O’Kelly emphasized the city’s limited capacity to delay action. “If we don’t act now, we risk the ability to protect the community,” he said. “We are acting because we must, not because we want to.”

Commerce city manager Ernie Hernandez cautioned that the consequences would affect daily operations, predicting that the rule change would lead to service delays and reductions. “The threat to our city is here,” he added.

Commerce Mayor Kevin Lainez estimated that the tax increase could generate at least $4.5 million, though this would only partially address a projected loss ranging from $8 million to $19 million. In Bell Gardens, O’Kelly indicated the city anticipates a 40% revenue reduction and expects the tax measure to recoup approximately one-third of that loss.

Blackjack Rule Change Disrupts Long-Standing Cardroom Model

The new regulations, effective this month, eliminate the method cardrooms previously used to offer blackjack and other house-banked table games. California law designates these games exclusively for tribal casinos. Cardrooms had maintained these offerings through Third-Party Proposition Player Services (TPPPS), where external providers acted as the bank.

This arrangement had faced opposition for years. Tribal operators contended that it infringed upon their exclusive rights to house-banked gaming, and state regulators have now implemented changes that cardrooms argue jeopardize their business model. Cardrooms have until May to outline their compliance plans.

The impact extends beyond gaming floors, with operators warning that the ban endangers the broader cardroom economy. This industry encompasses over 70 cardrooms and nearly 20,000 employees statewide. The California Gambling Association has suggested that up to half of these jobs could be eliminated.

Within Los Angeles County alone, County Supervisor Hilda Solis noted that cardrooms contribute to over $2 billion in economic activity and support approximately 9,000 jobs annually.

Officials from Commerce and Bell Gardens also reported that Rob Bonta declined to meet with them or address their concerns. They used the press conference to call for the state to halt the ban. Bonta’s office did not immediately respond to an inquiry from Gaming America regarding this claim.

Lainez and De La Rosa urged voters to support the June measures, with Lainez highlighting that the burden disproportionately affects communities like theirs. “This is a terrible situation. We are a vulnerable community. We are a community of color, and if you look at the cardroom cities all across the state, they are also communities of color.”

Frequently Asked Questions

Why are Commerce and Bell Gardens holding tax votes?

Both cities are seeking a quarter-cent sales tax increase to offset revenue losses associated with California’s blackjack ban.

What has changed under California’s rules?

The state has closed the cardroom model that permitted blackjack and other house-banked games through external proposition player services.

When must cardrooms respond?

Cardrooms have until May to submit their plans for complying with the new regulations.

What are Commerce’s projected losses?

Commerce anticipates losses between $8 million and $19 million, with the proposed tax increase expected to generate at least $4.5 million.

What are Bell Gardens’ projected losses?

Bell Gardens forecasts a 40% revenue decrease and states that the tax measure would recover approximately one-third of that amount.

What is the scale of the broader cardroom industry in California?

According to industry data, the sector comprises over 70 cardrooms and nearly 20,000 workers.

What did local officials say about the wider impact?

They stated that the budget impact could affect public services and disproportionately harm vulnerable communities of color.