(AsiaGameHub) –   Two small cities in southwest California are preparing their residents for a potential vote on a sales tax increase scheduled for the June ballot, prompted by new state gambling regulations and their anticipated impact on local budgets.

0.25% Tax Rise

Commerce and Bell Gardens have announced their intention to propose a quarter-cent sales tax hike in the coming months. This decision follows both cities being compelled to declare fiscal emergencies due to projected revenue shortfalls from their local cardrooms.

“The threat to our city is present,” stated Commerce city manager Ernie Hernandez . Bell Gardens city manager Michael B. O’Kelly echoed this sentiment, saying, “If we do not take action now, we risk our ability to protect the community. We are acting out of necessity, not desire.”

Both municipalities rely significantly on the revenue generated by the Commerce Casino, located just minutes from downtown Los Angeles, and the Bicycle Casino, widely known as “the Bike.” These popular gaming establishments are instrumental in funding essential public services such as police and fire departments, road maintenance, and community programs.

In Bell Gardens, city officials report that cardroom taxes contribute over $17 million annually, representing more than 40% of the general fund. Consequently, any reduction in this income could have a substantial and direct effect on everyday services.

The proposed tax increase could generate a minimum of $4.5 million for Commerce, which is a small portion of the anticipated $8-$18 million loss expected from the new regulations, according to city mayor Kevin Lainez.

No More California Games

The concern arises from new regulations set to take effect on April 1 , issued by the California Attorney General’s office. These rules specifically target so-called “California Games,” which are modified versions of traditional table games like blackjack and pai gow poker.

Cardrooms have historically utilized these formats to operate within state law, as house-banked games are generally restricted to tribal casinos. In these modified games, players take turns acting as the dealer instead of the house, with the cardroom collecting a fixed fee from each hand.

Under the new regulations that will be implemented next month, stricter oversight will be enforced. For instance, the player-dealer position will be required to rotate more frequently, or the game will be terminated. Additionally, the use of third-party providers currently serving as dealers will be limited.

Another significant alteration is that cardrooms will no longer be permitted to advertise games using terms such as “blackjack” or “21.” Furthermore, certain familiar elements of these games will be removed.

Operators anticipate that these changes will lead to slower gameplay and reduced revenue, while state projections indicate potential annual losses of tens of millions of dollars and the elimination of hundreds of jobs.

For Commerce and Bell Gardens, the implications are clear. A decline in cardroom revenue could result in residents bearing the increased financial burden through higher taxes. Ultimately, voters are likely to make the final decision.