Gaming in California

By September 13, 2017Cardrooms, Casinos, Gaming
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“Even as I approach the gambling hall, as soon as I hear,
two rooms away, the jingle of money poured out
on the table, I almost go into convulsions.”

The Gambler by Fyodor Dostoevsky

People are often skeptical of the claim that California generates more gaming revenue than Nevada, but then nod with understanding when they hear the components—California Lottery (aka the numbers racket) $3 billion, tribal casinos $8 billion, cardrooms $1+ billion and another $250 million from horseracing—over $12 billion total. In comparison, Nevada casinos generated $10.8 billion of gaming revenue in 2016. Admittedly, Nevada casinos generate another $14.4 billion in non-gaming revenue, $25.2 billion total while in California, gaming related revenues make up 80+% of the revenue for tribal casino and cardrooms.

The oldest poker room in California (and the world) is the California Grand Casino in Pacheco which has been in continuous operation since 1854, two years after Wells Fargo was founded. The Grand started as the Woodford Hotel and Saloon toward the end of the Gold Rush and at one point served as a Pony Express stop. The oldest tribal casino in California is the Morongo Resort and Casino, whose history dates to 1980 and operation was affirmed in the historic California vs. Cabazon Supreme Court ruling in 1986. Nevada’s oldest active casino, the Railroad Pass Casino (Nevada State Gaming License #4) in Henderson, Nevada, is 87 years old.

As of August 2017, there are 90 state-licensed cardrooms in California, of which 77 are currently in operation.2 Those 77 cardrooms have 1,924 active tables in operation, including both poker and variants of popular table games such as blackjack, pai gow and baccarat.3 There are 62 active tribal casinos in California4 and while no definitive data exists for the tables they have in operation, we estimate they offer over 2,000 table games to the gaming public. In total, there are approximately 4,000 poker and other table games in operation in California.

By comparison, Nevada has 271 commercial casinos and 4 tribal casinos, collectively offering 5,643 table games and another 770 poker tables.5 Approximately 4,300 of the table games offered in Nevada are comparable to those available in California.6 In total, Nevada gaming establishments offer about 5,000 table games similar to those available in California.

In 1985, 81% of all Nevada table games were blackjack games.7 Today, less than half of table games in Nevada are blackjack games (2,768 tables as of June 30, 2017) and those tables account for 30% of gaming revenue. In recent years, baccarat and mini-baccarat have increased, now accounting for 29% of revenue from about 500 tables.8 Other novelty games such as Fortune Pai Gow, Three Card Poker, Let It Ride, and Ultimate Texas Hold’em have eroded blackjack’s once dominant position in the pit. Variants of popular table games found in Nevada casinos exist in both California card rooms and tribal casinos, but there is not any publicly available data to determine the relative size of those games.

Finally, California is the largest source of Nevada’s out of state gaming patrons. Overall, when one thinks about states with gaming activity, California is overlooked because of the lack of traditional casinos. Yet the gaming activity in the state exceeds that seen in more traditional gaming jurisdictions and will likely continue with the expansion of tribal gaming and increased investment in both tribal gaming facilities and cardrooms.

1Nevada Gaming Abstract 2016, Nevada Gaming Control Board.
2California Gambling Control Commission.
3California Gambling Control Commission.
4California Gambling Control Commission.
5Nevada Gaming Control Board Quarterly Report for the Quarter ended June 30, 2017.
6Includes poker, blackjack, baccarat and other popular table games.  Some table games such as craps and roulette are not allowed in California.
7UNLV Center for Gaming Research.
8Nevada Gaming Control Board Quarterly Report for the Quarter ended June 30, 2017.

About the author

Kyle Kirkland is the current president of the California Gaming Association, the 501(c)(6) non-profit trade association that represents California cardrooms.  Mr. Kirkland is President and General Manager of Club One Casino, a 51-table cardroom in Fresno and holds the same positions for two smaller cardrooms.  Mr. Kirkland’s background includes work in the consulting, finance, music and gaming industries, and he has served on the boards of several public companies.  Mr. Kirkland holds an A.B. degree from Harvard College magna cum laude in Economics and an MBA degree from the Graduate School of Business at Stanford University.  He can be contacted at kyle@calgaming.org.