California’s casino industry is entering one of the most turbulent periods in its modern history, as rising living costs, declining consumer spending, and escalating legal conflicts converge to reshape a multibillion-dollar sector.

Recent casino closures across the state are no longer isolated incidents but warning signals of deeper structural stress affecting tribal casinos, card rooms, local governments, and tens of thousands of workers.

In late January 2025, a backcountry casino in Northern California shut down permanently after operating for less than a year.

The Mechcoa Casino, which opened in February 2024, featured a newly built 42000 square foot gaming floor, 480 slot machines, a restaurant, and a bar.

Despite its modern facilities and initial optimism, the casino closed its doors on January 31, 2025.

Sixty-four employees lost their jobs immediately, and hundreds of gaming machines were left unused in an empty building.

Industry regulators described such closures as uncommon, particularly for new facilities.

The shutdown highlighted a troubling reality for casino operators across California.

Consumers are no longer spending on gambling at levels seen in previous years, largely due to the escalating cost of basic necessities.

Fuel prices in California have surged far above the national average, reaching approximately 4.29 per gallon.

For many residents, a round trip to a casino now costs between 60 and 80 dollars in gasoline alone.

Hotel rates that once hovered below 100 dollars per night have climbed to 149 dollars or more.

Buffet meals that previously cost 25 dollars now exceed 50 dollars, while drinks and parking fees add even more to the total expense.

Before placing a single bet, visitors can easily spend over 300 dollars.

As a result, casual gamblers are cutting back.

Trips that were once monthly or weekly have become occasional or entirely abandoned.

The decline in discretionary spending is hitting casinos directly, particularly those located far from major population centers.

Two additional regional casinos are scheduled to close in early February.

San Manuel Casino in San Bernardino County is set to shut down temporarily, followed by the closure of Pechanga Casino near Temecula.

Tribal leaders have acknowledged that customer traffic has dropped sharply, not due to waning interest in gaming, but because everyday costs have made casino trips feel financially unjustifiable.

While tribal casinos struggle with attendance in certain regions, they remain financially dominant statewide.

California currently has 63 tribes operating 87 casinos, generating approximately 12.1 billion dollars annually.

These facilities include large resort-style destinations such as Pechanga, San Manuel, Morongo, Yamava, Graton, Thunder Valley, and Cache Creek.

Despite localized closures, the tribal casino sector as a whole continues to expand aggressively.

In contrast, California’s card rooms face a far more precarious future.

Seventy-two card rooms operate throughout the state, employing roughly 23000 workers and contributing more than 2 billion dollars annually to the economy.

Prominent establishments include Commerce Casino in Los Angeles, Hollywood Park Casino in Inglewood, Gardens Casino in Hawaiian Gardens, and Bay 101 and Casino M8trix in San Jose.

For decades, tribal casinos and card rooms coexisted under a carefully balanced legal framework.

Tribal casinos were granted exclusive rights to offer banked games such as blackjack and baccarat, where players wager directly against the house.

Card rooms, by contrast, were limited to player-versus-player games like poker, earning revenue through fees rather than direct betting.

That balance is now under intense legal scrutiny.

In January 2025, nine influential tribes filed a lawsuit against nearly 100 card rooms, alleging that they were illegally offering banked games through the use of third-party proposition player services.

These services involve licensed contractors acting as the bank at gaming tables, allowing card rooms to claim compliance with state law.

Tribal representatives argue that this arrangement violates the spirit of gaming exclusivity agreements, asserting that the use of third-party bankers is functionally indistinguishable from house-banked games.

Card room operators counter that the system has been repeatedly upheld by courts and complies with existing regulations.

Indeed, four California courts have previously ruled in favor of card rooms on this issue.

In October 2025, a federal judge dismissed the latest lawsuit, stating that federal law governs such disputes and that state courts lack jurisdiction.

However, tribal leaders quickly announced plans to appeal, ensuring that the legal battle will continue.

Even if card rooms prevail in court, they face mounting pressure from expanding tribal competition.

In November 2025, the Hard Rock Casino Tejon opened in Kern County following a 600 million dollar development.

The facility features a 150000 square foot gaming floor, more than 2000 slot machines, and 50 table games.

Over 1000 jobs were created, and the casino paid out more than 10 million dollars in jackpots during its first ten days of operation.

Further north, Graton Resort and Casino has begun a 1 billion dollar expansion project that will add 2000 slot machines, a 3500 seat entertainment venue, and 220 hotel rooms.

Once completed, Graton will become the second largest casino in California.

Additional projects are underway statewide, including Sky River Casino in Elk Grove and Chicken Ranch Casino Resort, which opened in November 2024.

The rapid expansion of tribal casinos intensifies competition for a shrinking pool of gambling dollars.

For card rooms already struggling with declining customer visits, the influx of new mega-resorts poses a serious existential threat.

The consequences of potential card room closures extend far beyond the gaming industry.

Several California cities rely heavily on card room tax revenue to fund essential public services.

Hawaiian Gardens, a city of approximately 15000 residents, derives between 60 and 78 percent of its general fund from Gardens Casino.

Without that revenue, the city would struggle to maintain police services, infrastructure, and basic operations.

Commerce, home to Commerce Casino, receives roughly half of its municipal budget from the card room.

San Jose collects approximately 30 million dollars annually from Bay 101 and Casino M8trix, funding schools, parks, and public services.

Inglewood receives more than 5 million dollars each year from Hollywood Park Casino.

Recognizing the stakes, card rooms have significantly increased political lobbying.

In 2023, Gardens Casino spent 9.1 million dollars on lobbying efforts, making it the second highest spender in California, surpassed only by Chevron.

The scale of this investment reflects the urgency felt by card room operators fighting for survival.

State economic analyses underscore the severity of the situation.

Proposed regulatory changes could reduce card room revenue by an estimated 396 to 464 million dollars annually.

This would result in the loss of 311 to 364 jobs each year, totaling more than 3600 lost positions over a decade.

These figures represent conservative estimates and do not account for broader economic ripple effects.

Despite the ongoing conflict, California remains without legal sports betting.

In 2022, voters overwhelmingly rejected two ballot measures that sought to legalize the practice.

The campaigns supporting and opposing the measures collectively spent between 450 and 600 million dollars, making it the most expensive ballot initiative battle in United States history.

Both measures failed by large margins.

Public sentiment, however, appears to be shifting.

A November 2025 poll indicated that 60 percent of Californians now support legal sports betting, a significant increase from three years earlier.

Observers expect another ballot initiative to emerge in 2026 or 2028, potentially reigniting competition between tribes, card rooms, and commercial operators.

The closure of Mechcoa Casino after just 11 months stands as a stark symbol of the challenges facing California gambling.

A brand new facility with hundreds of slot machines could not withstand the combined pressures of high costs and reduced consumer spending.

While tribal casinos as a sector continue to thrive, smaller operations and card rooms face an uncertain future.

Ultimately, California’s casino industry is not collapsing, but it is undergoing a profound transformation.

Economic pressures are reshaping consumer behavior, legal battles are redefining market boundaries, and aggressive expansion is intensifying competition.

As the industry evolves, not all operators will survive, and the consequences will be felt not only by casino owners but by workers, cities, and communities across the state.

The coming years will determine whether California can balance economic growth, legal fairness, and public interest in one of its most complex and controversial industries.