A federal judge has slapped down California’s attempt to dismiss a lawsuit by Hustler publisher and casino owner Larry Flynt, who is challenging the old law that was adopted to prevent mobsters from owning casinos in the Golden State.
The judge indicated that the law, which is aimed at organized crime, in additional to being “archaic,” might also be unconstitutional since it seeks to regulate interstate commerce.
The porn publisher owns two casinos in Southern California, the Hustler Casino and Larry Flynt’s Lucky Lady Casino, and seeks to buy casino interests in other states, which is where California’s old law comes into effect. The law prevents state residents from owning or investing in casinos in other states.
Flynt argues that the law was intended to hobble mob figures, who are no longer a major factor in Nevada casinos. He adds that the law prevents him from profiting from the national boom in gaming. He also notes that the state has issued exemptions to the rule in the past.
U.S. District Judge John Mendez’s 12-page ruling said the 1986 law should be examined as to its unconstitutionality. He wrote, “Defendants again fail to illustrate how these allegations are insufficient as a matter of law.” He added, “This could, theoretically, prohibit a licensee from forming a business partnership, unrelated to gambling, with a person who has interests in a casino.”
The 2016 lawsuit followed a fine by the state on one of Flynt’s investors that forced him to divest himself of interest in an out-of-state casino. Initially Mendez ruled that the lawsuit had been filed past the statute of limitations, however the 9th Circuit Court of Appeals ordered him to rehear the case.
