Several of California’s most high-profile cardrooms have come under increased scrutiny and enforcement in recent months by federal authorities.
The Golden State has 88 cardrooms. These are commercial casinos and unrelated to tribal casinos.
In 2017 several of the state’s most well-known casinos have felt the heavy hand of the law leaning on them. Most of the cases have related to money-laundering, specifically accusations that the casinos were doing little to combat it. Some involved illegal sports betting.
Two weeks ago, Artichoke Joe’s Casino in San Bruno was raided by federal agents. It has been assessed a fine of $8 million by the U.S. Federal Crimes Enforcement Network (FinCEN) and its license is being questioned.
In August, the 500 Club Casino in Clovis was investigated for alleged not having sufficient funds to cover all the chips that were in circulation for its 18 poker tables and for allegedly no cooperating with the California Gambling Control Commission. The state is pushing to revoke the club’s license. The club was shut down for a week and is operating under an interim license.
Also in August the Lucky Lady Card Room, the last remaining card room operating in San Diego, was subject to an undercover sting of nearly a decade for operating an alleged illegal sports betting operation. This resulted in 14 indictments in 2016, including some RICO indictments and including some associates of owner Stanley Penn. Earlier this year two more persons connected with the Lucky Lady pleaded guilty to racketeering charges. The casino is also operating under an interim license while the California Attorney General’s office pursues a case that the owner is unqualified to continue operating.
By far the biggest casino to make the headlines in 2017 was the Bicycle Casino in Los Angeles, the third largest card room in the state, and which has a checkered past of multiple investigations.
This year the casino and its 185 tables was raided by the California Bureau of Gambling Control, the IRS Criminal Investigations Unit and ICE Homeland Security Investigations Unit. Agents seized thousands of financial records that enabled them to begin a money laundering investigation.
When the “Bike” opened in 1991 an investigation determined that $12 million in money-laundered funds contributed to the $22 million construction. The club has a different owner now.
All these recent scandals may have had some effect on the legislature’s continued inability, or reluctance, after ten years of trying, to legalize online poker. The argument goes that if the state’s card rooms are hotbeds of corruption, what is to stop online poker sites from becoming the same.
