The first attempt to legalize Gambling in California was in 1984.
Since then, the state has experienced several events aimed at amplifying its gambling operations. From the early days of horse racing to the present-day reality of generating more than $8 billion in annual revenue, gambling in California has come a long way.
In this article, we take a brief trip down history lane as we provide a timeline of some notable events in California’s gambling history.
1933 – Proposition 5, Pari Mutuel Wagering on Horse Racing
Horse racing is one of the earliest forms of gambling in California. It became legal in June 1933, following the passing of Proposition 5 by California voters.
This constitutional amendment led to the addition of section 25a to Article IV of the Constitution of the State of California. It legalized parimutuel betting on horse racing events. As a result, the California Horse Racing Board was established in the same year to regulate related activities.
Parimutuel is a form of betting in which those backing the first three places share the wagers of the remaining stakes (losers) after deducting the organizer’s commission. Soon after, many bettors began taking lessons on how to bet on horse racing, as everyone wanted to get in on the action.
After legalization in June, Fairplex Park opened in Southern California as the first racetrack to offer parimutuel betting. Famous racetracks like Santa Anita and Del Mar soon opened in the state in the same decade.
Source: en.as.com
1984 – The California State Lottery
On November 6, 1984, Proposition 37, a combined initiated constitutional amendment and California State Statute, faced the tribunal of opinions. A majority (58%) of Californians voted in support, leading to the establishment of the California State Lottery Commission and a statewide lottery.
As a result, Californians could participate in draw games, scratch cards, Multi-state mega millions, and Powerball games. This vote also led to the constitutional prohibition of gambling casinos.
As a part of the lottery’s obligation, the Lottery Act mandated that it allocate a portion of its funds for education.
1987 – Carbazon Decision
February 25, 1987, marked the beginning of tribal gaming in The Golden State.
Following two US Supreme Court decisions in 1831 and 1832, the US tribes were declared “independent political communities” with “original natural rights” preceding European colonization. So, due to the proliferation of state lotteries earlier legalized in 1984, the Indian tribes operated several bingo games whose gaming rewards exceeded federal law limits.
In response, the State of California threatened to close the operations, and the tribes retaliated with a lawsuit. The court’s ruling, known as the Carbazon Decision, held that neither the state nor Riverside County had the legal standing to regulate the gaming activities (bingo and card games) of the Cabazon band of Mission Indians and the Morongo Band of Cahuilla Mission Indians.
Before this ruling, there weren’t any laws outrightly legalizing tribal gaming in California. This decision set off tribal gaming in the state.
Source: marinij.com
1988 – The Indian Regulatory Gaming Act (IGRA)
The Cabazon Decision set off a chain of events leading to the Indian Regulatory Gaming Act in 1988. In addition to legitimizing tribal gaming, this act implemented measures to regulate tribal government gaming by the Federal Government.
The IGRA classified gaming into three major classes, namely:
- Class I: Traditional Indian Social Gaming
- Class II: Card games, bingo, and similar legal games
- Class III: Every other form of gaming
To enforce the dictates of this act and all Indian gaming activities, congress established the National Indian Gaming Commission (NIGC). This commission further emphasized the Federal Government’s complete jurisdiction over Indian tribes. However, in the case of class III gaming, congress granted the states limited jurisdiction for regulating tribal government gaming.
1995 – Moratorium on New Card Rooms
Approximately a thousand card rooms were in California during the gold rush of the mid-1800s.
These gaming establishments offer various card games, including new versions of games like baccarat and blackjack. Players can only play card games strictly against each other and never against the house. This specification differentiated card rooms from conventional casinos because they do not offer video poker or slot games, as those games involve playing against the house instead of with other players. Card rooms provide players with cards, chips, dealers, and playing tables to facilitate the game.
Locales widely accepted this idea in the 80s. However, lawmakers felt the upside was so good that card room administrators had little or no incentive to enforce regulatory requirements. As a result, they enforced a moratorium on new card rooms in 1995.
This enforcement prohibited the establishment of new card rooms. However, existing ones could continue their operations under strict regulations of the local government. Furthermore, new entities could assume ownership of existing card rooms after agreeing with previous owners and following regulatory procedures.
Source: playusa.com
1998 – Proposition 5 and the Gambling Control Act
Remember the limited jurisdiction that Congress granted the states in 1988? The tribes were not too happy about it at the time.
So, on November 3, 1998, Californians decided on limited gaming on Indian lands at the polls.
A whopping 63% of Californians supported Proposition 5, thus allowing Indian tribes to form gaming compacts with the state. Tribes that decided to enter this compact with the state were permitted to organize class III gaming activities at their gaming establishments.
Examples of these gaming activities include the following:
- Parimutuel horse race wagering (which existed earlier)
- All card games previously played in the gaming establishments
- All lottery games
- Games of chance requiring electronic gambling devices (such as slot machines)
In the same year, the Gambling Control Act was enacted to give a comprehensive overview of all gambling regulations before that time.
2000 – Proposition 1A and Tribal Gaming Expansion
After Californians approved Proposition 5 and the legislature enacted the Gambling Control Act in 1998, the Governor negotiated compacts with 57 tribes in September 1999, and the legislature approved them all. However, in 1999, a legal technicality overturned Proposition 5, which was passed in 1998. So, the gaming compacts could not be implemented.
To remedy this situation, the California State Ballot presented the Gambling on Tribal Lands Legislative Constitutional Amendment, known as Proposition 1A, at the polls. In response, 64% of voters re-established the legality of California Indian Gaming on Tribal Lands.
This resulted in an expansion of tribal gaming in Los Angeles and elsewhere in California in the following years.
Source: reformcalifornia.org
April 2007 – Approval of Revised Compacts With the Indian Tribes
After the approval of Proposition 1A in the year 2000, gambling in California experienced a series of developmental events geared toward its advancement. The most notable breakthrough came in April 2007 when the state senate approved the revised compacts with the Indian tribes. This approval led to the expansion of tribal gaming in the state, with a notable addition of 22,500 slot machines amidst the five major tribes.
Conclusion
Notable events happen in the California Gambling scene daily. This continuous development points to the massive potential of the gambling market in California.
However, this wouldn’t happen without major legal milestones like the Carbazon decision in 1987 and the approval of Proposition 1A in 2000: these events and many more mark Gambling’s illustrious history in California.
And with the moratorium lifted in early 2023 after 28 years, California will keep breaking new ground in its gambling history.
