In a not-unfamiliar role for him, Hustler founder and casino mogul Larry Flynt is challenging the law—in this case an 1986 California law that prevents him from investing in casinos located out of state, in Mississippi and Colorado.
Flynt owns two cardrooms in the Golden State, is suing California in federal court, claiming denial of due process and discrimination because the California Business and Professions Code Section 19858 aka the Gambling Registration Act, prevents people like him from gaming activities in other states. The original purpose of the law was to keep organized crime out of cardrooms.
The lawsuit names Attorney General Kamala Harris, the California Department of Justice and the California Gambling Control Commission.
Besides preventing those who hold California gaming licenses from investing in casinos out of state, it also prevents out of state gaming operators from obtaining cardroom licenses.
Flynt claims the law is anachronistic because casinos are thoroughly regulated and no longer a haven for mafia activities, as they were many years ago. He points to a report issued 15 years ago by the Little Hoover Commission that declared, “The issue before the commission was whether the ownership prohibitions are still necessary to protect the public against criminal activity. The answer is clearly no.”
California Governor Jerry Brown clearly disagrees with that assessment. Two months ago, he vetoed a law that would have given exemptions to the law to the owners of the Hollywood Park Casino, which invests in the SLS Hotel and Casino in Las Vegas.
But Brown has urged looking at the state’s gaming laws to see if they “are based on outdated policies or assumptions.”
Joining Flynt in his lawsuit are Haig Kelegian Sr. and Haig Kelegian Jr., both cardroom operators.
