San Jose Delays Regulatory Rollback For Local Card Rooms

San Jose Spotlight

December 17, 2025

For the second time in as many weeks, San Jose officials have postponed voting on a proposal to loosen regulations on the city’s two casinos.

Backers said the package of five rule changes marks the final step in a reform push launched in June intended to lighten the administrative burden placed on the city’s two licensed card houses, Casino M8trix and Bay 101 Casino. They said the new rules will help create a fairer regulatory environment for the casinos — which contribute tens of millions of dollars in taxes each year to the city — without sacrificing public safety.

The City Council already passed a separate set of reform measures in August that reduced the annual fees the casinos are required to pay to the city. Councilmembers have said these revisions to the city’s gaming control laws are a necessary response to the fallout from a 2021 decision by state regulators that blocked a voter-backed effort to expand local card rooms.

“When businesses make new investments in the City of San Jose, which has a chronic job to housing imbalance, it is essential we act fairly and strike a balance between being pro-business and securing money to fund critical city services,” a June memo laying out the reform agenda authored by Councilmembers Bien Doan, Pamela Campos and George Casey reads.

The latest reform proposals were to be heard Tuesday but are now deferred to Feb. 3.

It’s unclear what’s behind the delay. The city manager’s office referred a request for comment to the San Jose Police Department, which is one of the lead agencies in the effort to review the city’s gaming rules. An SJPD spokesperson said only that the department did not request the deferral.

Representatives of Bay 101 and Casino M8trix, as well as the California Gaming Association, also did not respond to requests for comment.

The proposed rule changes would loosen several local gambling regulations. If enacted as written, the changes would increase the amount of time casinos have to report illegal activity on their property; double the maximum number of betting squares allowed on casino tables from 10 to 20; and remove a limit on the number of tournaments the casinos can hold each year.

They would also allow card rooms to offer complimentary or discounted food and non-alcoholic beverages to patrons. And they would repeal a time limit intended to prevent patrons from spending more than 20 continuous hours inside a casino.

A memo outlining the five reform measures includes a justification for each proposed change. For example, the memo argues the city’s current efforts to enforce the 20-hour time limit are unnecessary because few players ever cross that threshold.

“In total, City staff believe these ordinance amendments accomplish the objectives of streamlining regulations while preserving oversight in support of an evolving gaming industry,” the memo signed by Police Chief Paul Joseph reads.

The deferred proposals are intended to complement a pair of rule changes approved in August. At the time, the council voted to reduce annual fees for each card room from $1 million to $857,000 and also to cut two civilian positions in SJPD’s Division of Gaming Control. Backers say the changes, which are revenue-neutral for the city, simply eliminate local measures that duplicate state enforcement efforts. San Jose business leaders have been urging councilmembers to offer regulatory relief to the city’s gaming industry for years. They say it’s a necessary rebalance after the card rooms suffered a major setback at the hands of state regulators.

In 2020, San Jose voters overwhelmingly passed Measure H, a law that both imposed higher taxes on the card houses and also allowed them to expand the number of card tables they operate. But in 2021, the California Gambling Control Commission denied the city’s request for more tables, finding that the city’s card rooms had already reached the maximum limit imposed by state law.

“The City’s cardrooms are stuck paying more taxes without the tables approved by the voters and the corresponding revenue increase,” the councilmembers’ June memo reads.

In that same memo, councilmembers stopped short of endorsing an outright freeze on Measure H’s tax hike, which has brought in an estimated $15 million in additional revenue each year.

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