Happy House of Origin Day! While we wait to see what does and doesn’t move on to the next legislative chamber…some tidbits from around the Capitol.
A win for the cardrooms: A San Francisco Superior Court judge granted a preliminary injunction Thursday temporarily pausing enforcement of new cardroom regulations.
Judge Richard Darwin ruled that the Bureau of Gambling Control’s new regulations likely exceed its authority. In March, a group of cardrooms and third-party proposition players (TPPP) sued to challenge the regulations, which would limit their ability to offer their most popular table games.
The state’s own economic assessment projected that the new regulations could result in the loss of hundreds of millions of dollars in revenue for the cities where cardrooms are located as well as hundreds of jobs in the cardroom/TPPP sector.
With Darwin’s ruling, Attorney General Rob Bonta cannot enforce the regulations, which went into effect on April 1, while the legal challenge proceeds.
“Today’s ruling validates what we have said all along: Attorney General Bonta and the Bureau of Gambling Control exceeded their authority by attempting to rewrite California gaming law,” said Kyle Kirkland, president of the California Gaming Association, in a prepared statement. “These regulations were driven by pressure from powerful tribal gaming interests that have long sought to eliminate lawful competition from California’s cardrooms.”
California’s gaming tribes have long claimed that the cardrooms’ popular table games violate a state law that gives them the sole right to offer so-called banked games in which players bet against the house. Gov. Gavin Newsom gave the tribes the authority to sue over the matter in 2024 when he signed SB 549 by former State Sen. Josh Newman.
A Sacramento Superior Court judge later dismissed that suit, but the tribes are appealing.
LAO not thrilled with Newsom budget fixes: The LAO released its response to Gov. Gavin Newsom’s proposed budget on Monday, and it was a less than stellar review. On the positive side, the LAO noted that personal income tax revenues are up nearly 50 percent over the last three years. But the LAO also notes that rather than strengthening the state’s fiscal future the governor’s budget relies “on roughly $20 billion in reserve withdrawals and suspended deposits, as well as $4 billion in borrowing (on top of tens of billions of dollars in existing borrowing), to achieve budget balance.” Worse, in spite of “the current revenue boom, the state now faces a structural budget imbalance—meaning ongoing revenues are insufficient to support ongoing expenditures.”
The LAO’s full review can be found here.
Less menopause funding in May Revise: In case you missed it, Newsom’s May Revision pared back the administration’s earlier menopause services proposal. The governor’s January budget envisioned a broader initiative, proposing $3.4 million in 2026-27 funding — including up to $3 million in the General Fund and $391,000 in ongoing funding to the Managed Care Fund. The proposal included perimenopause and menopause health coverage, enrollee access to care, provider education and a statewide public awareness campaign.
Instead, the revised budget proposes a one-time $3 million General Fund allocation to the California Department of Public Health for a statewide menopause awareness campaign to increase public understanding of perimenopause and menopause.
Also worth keeping an eye on: AB 1940 by Assemblymember Lisa Calderon, which would add menopause-related conditions to California’s workplace anti-discrimination protections under state law.
Foster family agencies seeking funding: Private foster agencies are seeking another $30 million from this budget cycle as they continue to try to manage the fallout of their primary insurer pulling out of the industry.
In August 2024, the Nonprofit Insurance Alliance, which insured 90 percent of the foster agencies in California at the time, announced it would not renew coverage of the organizations.
Private foster agencies, known as foster family agencies or FFAs in California, are private nonprofits that recruit and oversee foster families. FFAs occupy a critical niche in the state’s child welfare system, supporting roughly one in five California foster children, but they are teetering on the edge thanks to the loss of the insurance carrier.
Last year, the budget allocated $31.5 million to help FFAs help stabilize their operations in the wake of the alliance’s exit. But the nonprofits are still struggling.
“FFAs continue to face significant financial strain due to the ongoing liability insurance crisis,” the California Alliance of Child and Family Services and 11 organizations said in a recent letter to the chairs of the two budget committees and the two budget subcommittees focused on human services. “Since October 2024, 28 FFA site closures have been reported to the California Department of Social Services.”
The letter says that without additional bridge funding the state will see more FFA closures as liability insurance costs continue to rise.
The California Alliance of Child and Family Services partnered with the Department of Social Services in February and May 2025 to distribute survey FFAs about the impact of the insurance crisis and conducted a follow up in April of this year.
FFAs that responded last month reported serving an average of 125 children and youth in the child welfare system, with the largest providing serving more than 500. The agencies reported paying an average of $425,041 annually for liability insurance, with some facing bills more than $2 million.
More than a third of FFAs surveyed said they might have to close at least one of their sites without additional funding; 28% reported they may have to shut down entirely.
“Each closure represents a loss of placement options, disruptions in relationships, and fewer opportunities for youth to remain in stable, family-based settings,” the May 15 letter said.
Sen. María Elena Durazo (D-Los Angeles) and Assemblymember James Ramos (D-San Bernardino) are championing the FFAs’ request for more funding.
Orgs fight for mobile crisis mental health program: More than 50 organizations held a virtual press conference on Thursday calling on legislators to save the state’s Mobile Crisis Response system, which Newsom has proposed eliminating in the next state budget.
The program, currently a Medi-Cal benefit, is a network of behavioral health teams that are dispatched when someone is in the throws of a mental health crisis. The community-based teams are trained to de-escalate the situation safely.
“For families living with serious mental illness, mobile crisis response is not optional; it’s often the difference between getting help at home with a loved one in crisis and involvement with the police, emergency room visits, or 5150 holds,” said Jessica Wilson, CEO of the National Alliance on Mental Illness (NAMI) California. “This is exactly the crisis continuum California has been trying to build. Eliminating the statewide Mobile Crisis Response benefit would create a patchwork system where one family gets a trained crisis team and others are left to manage a crisis alone. That’s not fair to families. That’s not the statewide mental health system this Administration has been promising to build.”
Capitol Weekly reporters Brian Joseph and Leah O’Tarrow contributed to this story.
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