California Statute on Casinos Causes Larry Flynt to Sue State

by Jim Hall

Larry FlyntA California statute involving out-of-state casino business has caused porn and casino mogul Larry Flynt to sue the state.

Larry Flynt’s name is synonymous with two things; porn and casino gaming. For decades, Flynt has provided entertainment of both varieties with casino venues as well as magazines and merchandise. Flynt has been in the media as of late due to casino gaming after taking on the former Normandie Casino and renaming it Larry Flynt’s Lucky Lady Casino. The casino operator has faces battles after the purchase and now seems to be setting up to sue the state based on a statute that does not allow him to invest in a casino business outside of California.

Filing a Civil Suit

It was the middle of last week when Larry Flynt decided to file a civil lawsuit against the state of California based on the gambling rules, saying they are unconstitutional. Flynt is the owner of two card rooms in Gardena, California, the formerly mentioned Lucky Lady and the Hustler Casino. According to the California Business and Professions Code 19858, state residents are prohibited from investing in entities out of state if they already hold a cardroom license.

Flynt is essentially locked out from becoming involved in casino style gambling facilities in areas other than California. In the lawsuit, backstory is provided as to why the prohibition exists. Apparently a report was conducted in 2001 where the ownership limitations were reviewed by an independent state oversight agency. The restriction was created to try and keep organized crime from taking place in the state.

No Longer Valid

In the suit, the former chairman of the California Gambling Control Commission is quoted as stating that the restriction is not valid any longer as publicly traded casino companies are effectively regulated in other states. The report actually stated that for the law to be kept on the books would be illogical. The info of the suit also points out a ballot approval from 2000 when an initiative was agreed upon to permit casinos on tribal lands with no ownership restrictions.

Since this time, out of state entities have been able to take part in casino gambling on tribal lands. However, Flynt is not able to become involved in casinos located in other jurisdictions. In the suit, it states that the statute, Section 19858, is in violation of the United States Constitution Commerce Clause by being discriminatory against gaming licenses holders in California. It also claims that the statute is in violation of the Due Process Clause as it prevents the plaintiffs from being able to engage in a profession of their choosing.

Others Involved

Larry Flynt is not the only individual involved in the lawsuit. Other plaintiffs named in the suit include Haig Kelegian Sr. and Haig Kelegian Jr. These two men have a stake in Oceans 11, Bicycle Club, Crystal Casino, Commerce Casino and the Club One Casino. Each of the plaintiffs named in the case claim to have suffered from harm as they are being prevented from investing in casino opportunities located out of state. Each plaintiff is seeking injunctive relief from the unconstitutional statutes along with the cost of court and attorney’s fees.

It will be interesting to see what happens in this case. Flynt has a reputation as feeling that the deck is stacked against him and constantly fighting legal battles involving casino gaming in court. Will he find that the court agrees and he will be able to pursue other interests involving gambling outside the state? Or will he be limited to staying within California when it comes to pursuits of the casino variety?