Kyle Kirkland is a card room owner in California, and also serves as the president of the California Gaming Association, a group that represents card rooms in the state. He appears to spend a great deal of time spinning the notion that the latest federal raid or fine on a California card room is actually a nothing-burger—this in spite of the fact raids and fines by federal authorities on California card rooms are a very common something-burger thing.
Moreover, the trend in California after a fed raid and/or fine on a card room is for the state to follow along with its own fine. This means not a lot of time passes between when Kyle Kirkland has to go make another effort to spin another curious story about why a card room was raided or fined, and why there’s nothing to see here.
What Kyle Kirkland should be doing is organizing for a statue of former California regulator Robert Lytle to be placed in front of every card room in the state, because it was the action of this so-called regulator that allowed the card rooms in California to flourish.
Robert Lytle was the head gambling regulator for the state of California who, 10 days before he stepped down from his state job, wrote a letter to two industry representatives reinterpreting state gaming law. And this reinterpretation fundamentally changed how the card room industry worked. Oh, also, after Lytle stepped down from his state position, he went to work for the industry that benefited from his reinterpretation of the law. How important was this reinterpretation? Well, the industry went from essentially being all about poker games to one in which a single card room was able to pay a single marketing person an annual salary of more than $1 million to introduce table game customers to the facility. It also welcomed a period where the California card rooms were continually raided by federal authorities up and down the state.
Robert Lytle helped make the card room industry in California, and his eventual reality became that he needed to admit he was corrupt. Given that he was a sworn law enforcement officer, he was like a cop who, upon leaving state service, went dirty to line his pockets. That’s the level of sleaze Robert Lytle ascribed to. So it is only fitting that his statue should be in front of every card room in the state.
Unfortunately, Lytle could only look at these statues from a distance, because he entered into an agreement with the state under which he can never again be associated with a California card room. Being sleazy isn’t easy, and poor Robert got caught so cleanly, his defense was to admit he was dirty, write some very big checks to the state, and agree to stay away from the industry forever.
Robert Lytle was well-known within the state’s gambling hierarchy. He worked with former Governor Jerry Brown when Brown was attorney general. He was also there with Tina Littleton, Jacob Appelsmith, James Parker, Rick Lopes, and several others who have become interesting figures in shaping the reputation of the California card room industry and its regulation.
As if in a challenge to outdo Lytle’s sleaze, the California legislature has done essentially little about the card rooms, other than spend their contributions. A portion of them have most certainly been generated through inappropriate transactions, for they side-stepped procedures designed to stop the financing of terrorist activities, public corruption, organized crime and money laundering.
This is not to suggest that California politicians have done absolutely nothing. A convicted felon held the paper on a card room, and the relationship between the card room and the felon was being looked at by the regulatory authorities. The card room made a nice series of contributions to a legislator, and it appears that this legislator had a role in working with others to initiate a legislative-driven audit of the regulatory authorities. This is an important message the legislature appears to have wanted to get out there—that being, if you’re a felon and providing financial backing to a card room, and that card room is making financial contributions to a legislator, it just might buy an investigation into the regulatory agency that is looking at the behavior of the felon.
In March of 2011, two California card rooms were raided by 160 agents led by the federal government. This started a series of raids and fines instigated by the federal government that easily qualifies the California card room segment—which is comprised of fewer than 80 operators—as the sleaziest legal gaming sector in the United States. Yes, the events of 2011 started out a decade of corruption by the California card rooms, and so the political leadership of the state can take great pride that it responded to this in the ethical and responsible way, launching an investigation of the regulators of the state who are now actually trying to clean up the sleaze.
It appears the Bureau of Gambling Control, the agency Robert Lytle essentially tainted with his corrupt behavior, is trying to set the record straight and get the law back where it belongs. The agency will face stiff resistance from the card rooms and more importantly, by their paid lackeys in the legislature.
The respected publication Gambling Compliance has reported that 75 percent of the card rooms in California are in Democratic districts; possibly this explains why the legislature is apparently indifferent to the fact this segment is so often the target of federal raids and federal and state fines. After all, these folks do contribute to a great many Democratic politicians, and do vote for them, and while the money may be dirty, it does spend.
As the card room battle heats up in the state, look to the legislature to deny the law and talk often and long about the jobs created by the card rooms. It apparently does not matter to them that the industry is constantly the target of federal raids and the like, for after all, it’s about the political contributions and votes—err, I mean the jobs.
I entered the gambling industry more than 45 years ago as a college student. I financed my college education by dealing cards at night in a casino. I have spent more than 30 years in casino operations, including being the CEO of a large Las Vegas casino resort. I spent two years working on a Ph.D. dissertation on the history of Nevada’s gaming regulatory agencies. I have been a gambling commissioner in California, and executive director of a gambling commission in a foreign country. I have been a consultant to both Detroit and Kansas to assist these jurisdictions to introduce casinos. I have taught casino management and regulation across the U.S. and in China and Switzerland. I have consulted on gaming around the world and have published over 100 articles the topic. I have also filed gaming applications in more than 120 jurisdictions around the world, never had an application rejected, and never withdrew an application with prejudice.
From that experience, I can honestly state that I have never witnessed such a total joke as the gaming regulatory effort in California, and I assign this to a history of a few bad regulators from the past and the most inept legislature in gaming matters on the planet.
It seems Adam Gray and Bill Dodd want to be recognized as the legislative leaders in gaming, and I can only conclude they’re either totally corrupt, inept, or intellectually lost.
Gray has sat on his hands while a cascade of money laundering incidents and fines have occurred in the card room segment. My guess is he did nothing because working to slow down the money laundering violations may curtail the ability of the card rooms to contribute to his and his colleagues’ campaigns.
Dodd, chairman of the Senate Government Organization Committee, which handles gaming matters in that body, seems clearly conflicted, in that his son is a lawyer for a group trying to build a card room in his father’s district, and the son has stated that card rooms are a better solution than tribal casinos for that district.
Both legislators seem to be more concerned about their own friends and family than working to establish a viable and crime-free environment for California gaming. One can Google “raids on California card rooms” and get almost 11 million responses, yet the California legislature seems oblivious to this reality. In their wisdom, they thought they should investigate the current regulators who are working to stop this nonsense.
The public had an opportunity to see the true colors of the California legislature with the recent sports betting hearing. Not one woman witness was involved in the hearing, leading one to believe that Dodd and Gray think women-folk should not be included in the sports betting discussion. Moreover, no one with problem gambling credentials was invited, yet another indication that this group could care less about any problems that the citizens of California might suffer. Neither women in gaming nor problem gamblers have a lobby that funnels contributions to the legislators, so they could apparently care less about these issues.
One thing I clearly understand is that a well-regulated gambling industry can be a powerful engine of economic development. This engine, however, cannot run amok. In order for gambling to be sustainable, it needs to be well-regulated. This reality is something legislators in the state of California apparently do not get, or have sacrificed any attachment to character and integrity so as to secure contributions, votes and to help family members.
I would suggest that tribal governments in the state have become so disillusioned with the Parliament of Whores that is the California legislature that they are taking future gambling issues to the people. The legislature will hate this, because allowing the people to decide stops them from lining their pockets, securing votes and taking care of family members.
Yes, it’s all about jobs, the legislators’ jobs. And yes, they behave like a Parliament of Whores.