A big gamble for Washington: Help non-tribal cardrooms survive or let them die?

Last summer’s opening of the splashy new Emerald Queen Casino, which commands attention next to Interstate 5 in Tacoma, didn’t just finalize a $400 million gambling investment for the Puyallup Tribe.

It symbolized the growing existential threat to Washington’s non-tribal cardrooms, which are bound by state law and had to stay dark for long stretches during COVID-19.

It also should add urgency to questions facing elected leaders and gambling regulators:

Do they want licensed cardrooms in our state to survive? Or are they content to let sovereign tribes seize total control of a lucrative industry in which they enjoy huge competitive advantages, such as exclusive rights to operate slot machines, a new deal to launch sports wagering and freedom to stay open during a pandemic?

Cardrooms continue to shut down and put scores of hospitality employees out of work. The decline started long before coronavirus but intensified under Gov. Jay Inslee’s emergency public health orders.

Today only 41 licensed card rooms remain in business, a steady slide from the 64 establishments that were operating in 2010 and a high of 96 that hosted gambling in 2006. Bottom line: 57 percent of the industry has folded in the last 15 years.

Pierce County has just four cardrooms left, all in Lakewood. The general manager of two of those businesses, Chips Casino and Palace Casino, appeared before the Washington Gambling Commission Thursday and made a bold request:

Increase the wager limit for house-banked card games from $300 to $2,000.

In the world of poker, that’s known as a big opening bet, perhaps even a bluff. But we don’t blame local casino GM Ronald Johns for being aggressive in a game with such high stakes: the viability of his industry.

It’s understandable why cardrooms would want an update to state rules, originally written in 1997, and a boost to the wager limit, which hasn’t changed since 2009.

Especially since tribes routinely renegotiate their compacts with the state, expanding the games they can offer, the number of tables they can operate and the maximum wagers allowed.

“Currently cardrooms in Washington state are limited to 15 table games, allowing for up to nine spots per table, and a maximum wager of $300,” Johns said. “It’s my belief that when these limitations were set in place, the clock began ticking towards the end of the cardroom industry.”

In his 23 years in the industry, Johns said, he’s been able to earn a livable wage and take care of his family. He started as a security guard and worked his way up through jobs such as game table dealer, floor manager and shift supervisor.

Now he sees an opportunity to regain some lost ground by targeting an elite clientele: High rollers who’d sooner catch a flight to Las Vegas than support a local cardroom.

“These players have no interest in playing where they have such small limits on wagers,” Johns said. “I’m referring to individuals who make at or around seven figures, and their $2,000 bet is the equivalent of my $20 bet.”

Commissioners opposed raising the limit so high, with good reason. Gambling addiction is prevalent in our state; 3.9 percent of the population can be classified as at-risk, problem or pathological gamblers, according to a 2019 study. And Washington gambling law emphasizes that activities “are more for amusement rather than for profit, do not maliciously affect the public, and do not breach the peace.”

But commissioners acknowledged cardrooms need help. They satisfied Johns by agreeing to explore more modest changes.

Likewise, there are steps that state legislators can take to stop the industry from collapsing.

A bill this year sought to authorize sports wagering at licensed cardrooms and racetracks in Washington, along with a 10 percent tax on revenue. It followed a law passed in Olympia last year that opened the door for tribes to operate sports betting in their casinos. The US Supreme Court ruled in 2018 that federal law banning states from authorizing sports betting was unconstitutional.

Unfortunately for cardrooms, the bill giving them a piece of the sports action is dead this year, failing to advance past a Senate committee.

Bringing more balance to Washington’s gambling landscape makes sense at a time when the industry is trying to recover from pandemic losses, and so are its watchdogs. Legislators are weighing an extra $3.6 million appropriation in this year’s Gambling Commission budget, matching the agency’s revenue loss since March 2020. The budget covers everything from addiction programs to law enforcement, surveillance and prevention of casino-related organized crime.

There’s no question our state must fulfill its obligations to Washington’s 29 federally recognized tribes after generations of oppression and neglect. That includes negotiating gaming compacts in good faith.

But state leaders should do more to ensure the deck isn’t impossibly stacked against cardrooms, so they can keep the lights on and thousands of hospitality workers employed.

This story was originally published April 10, 2021 at 6:00 AM.