Card Rooms Lose Tribal Gambling Challenge

A state appeals court has found that California’s compacts with Indian tribes, allowing the tribes to offer certain types of gambling on Indian land, pass constitutional muster and don’t deny card rooms, which can be operated off Indian land, equal protection under the law.

The publisher of Hustler magazine, Larry Flynt, and two Los Angeles card rooms, Hustler Casino and Normandie Casino, sued the California Gaming Control Commission and the state attorney general in November 2001.

Flynt and the card rooms argued that letting certain tribes offer certain games, including so-called banked and percentage games and slot machines, but not letting card rooms offer the same games has created a monopoly and put the card rooms at a competitive disadvantage.

The suit involved what are known as Class III games: banked games, in which the house has a stake in a game’s outcome; percentage games, in which the house collects a share of the amount wagered; slot machines; and other high-stakes casino-type games.

The plaintiffs also said that existing laws deny the card rooms equal protection because the card rooms are prosecuted if they offer Class III games, while Indian tribes are not. Flynt and the card rooms asked the court to let them offer the Class III games.

The 1st District Court of Appeal agreed with a San Francisco County Superior Court judge who found that the state’s compacts with Indian tribes do not create an unconstitutional monopoly in violation of equal protection. The appeals court concluded that the compacts pass constitutional muster because they are related to “the fulfillment of Congress’ unique obligation toward Indians.”