California’s Bureau of Gambling Control, alleges that Sahara Dunes Casino, doing business as Lake Elsinore Hotel and Casino on a lonely stretch of Interstate 15 between Los Angeles and San Diego has been operating illegally since 1999 on a provisional license—avoiding disclosure laws. It wants to shut the casino’s doors.
Although some press outlets have made much of the fact that the casino is owned by a Utah Mormon splinter group that practices polygamy with women as young as 15, that aspect doesn’t seem to figure much in the state’s problems with the casino.
The owners are Joseph and Ted Kingston, who control the Kingston Group, aka Davis County Cooperative Society. The Kingston Group owns financial and farming operations in Utah and Idaho, but also the casino in California. Of these, only the casino requires that it undergo an extensive background check, something that it has apparently managed to avoid for twenty years.
This group, the Salt Lake Tribune reported recently has attracted the attention of federal regulators, who allege it is involved in a large tax fraud scheme.
However, the California Bureau’s issue with the family is that it has violated gaming registration requirements and failed to submit 16 applications, and failed to comply with requests for information. The law requires the Kingston family and Sahara Dunes Management, to obtain a California gaming license. The state has taken them to court, which asserts: “Failure to do so renders the casino unqualified for licensure and makes (the casino’s) provisional license subject to cancellation.”
The process for obtaining a license includes extensive background checks by the California Department of Justice to determine suitability to operate a casino.
According to the Bureau, “Suitability is determined by a number of factors including, but not limited to, the applicant’s honesty, integrity, general character, reputation, habits, and financial and criminal history.”
The case has now reached an administrative law judge, who could force the Kingstons to either sell or shut the doors of the Elsinore operation.
Some say an even bigger story is that Golden State gaming regulators have taken 20 years to clamp down on the Kingstons.
Kurt Eggert, a law professor at Chapman University of Law in Orange, who specializes in gaming law, told the Salt Lake Tribune, “Another story is about how long California regulators have recognized there is a problem with the ownership of a major casino,” Eggert wrote, “and how long the casino seems to have delayed the resolution of the problem by being nonresponsive to urgent requests for important information.”
The bureau has one charge: that Joseph O. Kingston did not provide the necessary paperwork to apply for a license. However, in 2008 the Bureau recommended that the license be denied for the “use of inappropriate accounting methods,” not notifying regulators of ownership changes, and the “continued employment of a key employee with a felony conviction.”
The state’s record of enforcing or not enforcing regulations against casinos is complicated by the fact that two agencies regulate gambling: the Bureau of Gambling Control and the California Gambling Control Commission. Reporting on it is complicated by the fact that both agencies routinely resist public records requests from the press.
