Published On: Thu, Nov 2nd, 2017

Larry Flynt Loses Gambling Law Battle

Share This

The Hustler Casino in South Florida

Pornography king, Larry Flynt, has lost the battle to expand his gambling business last week after a federal judge dismissed his appeal against a California organized crime law that prohibits out-of-state casino ownership.


According to the U.S. District Judge John Mendez, Flynt’s due process claims existed outside a 2-year statute of limitations.


Flynt, who currently operates the Luck Lady Casino and the Hustler Casino in Southern California, appealed against the law claiming that it prevented him from investing in various other gambling options.


California’s Gambling Registration Act was established with the purpose of keeping out organized crime groups from running or getting involved in gambling operations within the state. To do this, the act limited the financial resources available to cardroom operators. The act also prohibits California gaming license holders from investing in out-of-state gambling opportunities and even prevents out-of-state gambling operators from holding cardroom licenses in California.


Flynt argues law’s current validity


Flynt and Bicycle Casino owners, Haig Kelegian Sr. and Jr. argued against the law, stating that it failed to be relevant. The duo also cited the example of Nevada, which has updated its gambling laws allowing publicly traded corporations to operate casinos while also keeping out organized crime groups.


The argument is said to have been motivated by Kelegian Jr.’s recent fining. Kelegian Jr. was ordered to pay around $210,000 in fines after transferring his ownership of an out-of-state casino to his spouse. The Kelegians spoke against the incident saying that it had prevented them from investing in casinos outside California.


Flynt also argued that, because of the act, he could end up losing his minority holdings in out-of-state adult businesses as well if gambling services were added to them. Flynt and the Kelegians did not seek punitive damages and primarily appealed the court to consider the law as being unconstitutional.


However, Mendez rejected the complaint, citing that there was no alleged continued harm. The judge went on to dismiss the motion with prejudice adding that any further amendment to the law would be futile.


Heavily regulated


Gambling in California is heavily regulated and only certain forms of it such as non-banked card games and poker are allowed. Banked-card games and slot machines are limited to tribal operators while residents can bet on horse races.


Various operators have sought to amend California’s gambling laws with little to no success. However, in a 2002 state-funded survey, it was found that most Californians were okay with allowing publicly traded companies to own and operate cardrooms.

About the Author