As discussed in our prior alert, California cardrooms were facing significant operational changes following the approval of new regulations by the California Department of Justice and Bureau of Gambling Control. Those regulations, approved on February 6, 2026, were set to take effect beginning April 1, 2026, and would have altered the operation of blackjack-style games and the use of third-party proposition player services (“TPPPs”).
In particular, the rules would have effectively prohibited traditional blackjack-style mechanics (including use of “21,” bust features, and natural blackjack payouts), while imposing stricter player-dealer rotation requirements that would significantly limit the role of TPPPs.
Court Ruling Creates Uncertainty
On May 21, 2026, a San Francisco Superior Court judge issued a preliminary injunction blocking enforcement of these regulations while a legal challenge proceeds. The injunction was granted in connection with litigation brought by the California Gaming Association and related stakeholders. In doing so, the court found that the Bureau of Gambling Control likely exceeded its authority in adopting the regulations and that there was “clear and convincing evidence” that enforcement could result in irreparable harm to cardrooms and the communities that rely on their tax revenue.
As a result of the court’s ruling, cardrooms may continue operating under the existing regulatory framework, including player-banked game structures and the continued use of TPPPs consistent with prior practices. The injunction effectively pauses the significant operational changes outlined in our prior alert and preserves the status quo for the time being. However, the relief is temporary, and the underlying litigation remains ongoing.
Looking ahead, regulatory uncertainty remains high. If the regulations are ultimately upheld, they could still require substantial changes to cardroom operations, including the elimination or restructuring of blackjack-style offerings and changes to the use of TPPPs. Conversely, if the regulations are invalidated, the outcome may limit the California Department of Justice’s ability to impose similar changes through administrative rulemaking in the future.
We will continue to monitor developments in the litigation and provide updates as appropriate.
