Larry Flynt is best known for being the founder of Hustler but Flynt also has interests in the gambling industry owning two cardrooms in California. Flynt is looking to diversify his portfolio and invest in out of state and foreign casinos but is unable to do so as of now as current gambling laws in California prevent residents who own cardroom licenses from investing in casinos out of state.
Gambling laws in California not only prevent residents who own gambling licenses from investing in out of state and foreign casinos but also prevents out of state residents who own gambling enterprises outside of California from obtaining gambling licenses in California.
Flynt is interested in expanding his gaming portfolio and investing in casinos in Las Vegas, Colorado and Mississippi. As a result, Flynt has decided to sue the state of California on the basis of discrimination and has teamed up with two other cardrooms. Haig Kelegian Sr, Haig Kelegian Jr and Larry Flynt have filed a lawsuit against the California Gambling Control Commission, the California Department of Justice and Kamala Harris who is the Attorney General in California. Haig Kelegian Jr owns three cardrooms in California and has been punished by the state of California in the past for violating gambling laws.
The plaintiffs have submitted a 25 page report alleging that Section 19858 which prevents them from investing in out of state and foreign casinos was earlier inserted in order to prevent organized crime holdings from manipulating the casino industry. Flynn pointed out a Little Hoover Commission report, which was a nonpartisan study funded by the state in 2002, which clearly stated that Section 19858 was no longer necessary to protect the public from criminal activities.
One of the statements, in the 25 page complaint says “In spite of the recognition that Section 19858 is discriminatory and has long outlived its ostensible policy rational, the provision remains in effect and to impose a criminal law barrier to otherwise lawful interstate investment.”
California Governor Jerry Brown, also is in favor of having the state’s gambling laws amended, had earlier called on state legislators to once again review the current gambling laws. Brown stated that it was essential for all gambling shareholders to receive the same opportunities and benefits and if any outdated laws were preventing that from happening, then they must be reviewed and amended accordingly.
The plaintiffs are not suing the state for any punitive or special damages but only want the courts to prevent the state from enforcing Section 19858 which is also known as the Gambling Registration Act.