California Gambling Law and Larry Flynt

With over 90 licensed card rooms and a complex set of existing gambling laws, passing new gambling legislation is proving to be more difficult than ever in California.

California’s Judge John Mendez handed out a stiff loss to 75-year-old millionaire Larry Flynt in the U.S. District Court for the Eastern District of the state.

Flynt is most notably known as the president of Larry Flynt Publications, which publishes the Hustler magazine. The Hustler Casino and Larry Flynt’s Lucky Lady Casino, both of which are located in California, are also owned by the business mogul.

The legal challenge was over a long-standing California state law that forbids any licensed casino owner within the state from operating, owning, or investing in any other casinos out of the state of California. Similarly, out-of state residents with existing gambling affiliations outside of California can’t obtain a California cardroom license.

A California-funded survey performed in 2002 actually recommended amending California gambling laws to allow out-of-state companies that are publically traded to do business with California’s poker industry.

Haig Kelegian Sr., a popular figure in California gaming with a track record of turning around or founding five of California’s most popular casinos, and his son, Haig Kelegian Jr., were also involved in Flynt’s legal plea to abolish the existing California gambling law.

In 2010, Haig Kelegian Jr. transferred ownership of card room located in Seattle, Washington to his wife, and the California Bureau of Gambling Control reacted by slapping him with a 210,000 penalty fine. The trio made complaints during the hearing that this fine had long-lasting impacts on their business operations, including prohibiting the Kelegians from teaming up with Flynt on financially profitable business opportunities in Nevada, Mississippi, and Colorado.

They argued that the 1984 California Gambling Registration Act was obsolete and detrimentally restrictive to business owners who wanted to operate in multiple states. A main point was that the original purpose of the law was to keep organized crime from taking residence in California casinos; Flynt argued that law was too broad and needed to be revised similarly to Nevada’s updated regulations on the issue.

Presiding Judge Mendez found that any amendment would be futile to the legalities, the trio had failed to prove continued harm to their businesses, and that the lawsuit had fallen short of the two-year statue of limitation – thereby ruling against their lawsuit in its entirety.

However, Flynt’s legal presence may not be over just yet. He is still currently calling for sitting president Donald Trump to be impeached, even offering a $10 million dollar prize for any information that gets the impeachment job accomplished.

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