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Larry Flynt Scored A Minor Victory In CA Battle For Casino Ownership

Article by : Helen Jan 28, 2021

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Updated: Apr 6, 2023

Tenacity and an iron-strong will to victory – these are the best qualities that have always been leading Larry Flynt to success. Porn king and Hustler magazine founder got into the gambling industry when he started opening his own card rooms in California. However, just like at the beginning of his pornography empire, Flynt faced some roadblocks on his way at this point. Before launching his magazine, he knew how risky it was, but he didn’t even think of giving up his idea and went toward his goals. Now, when Flynt has entered into a difficult battle against California, history repeats itself. Flynt was disappointed when he realized that the state would try to shut him down, so he decided to fight back. Despite losing the first round, when Flynt sued the state for blocking his desire to invest in out-of-state entities, he came back with aces in the hole and eventually scored a minor victory.

According to the California Gambling Registration Act, California residents who hold California gaming licenses for card rooms and casinos are prohibited from purchasing gambling venues located across the state borders. Together with co-plaintiffs Haig Kelegian Sr. and Haig Kelegian Jr., Flynt operates Lady Luck Casino and Hustler Casino in Gardena, which automatically means they fall under the prohibition. When the local authorities found out that Junior’s wife acquired a Seattle gambling property, they knocked on the door and imposed a $210,000 fine on his family. To renew his licenses at California cardrooms, Haig Kelegian Jr. was forced to relinquish his out-of-state investments.

At some point in the past, prohibition used to be well-intentioned. Its initial purpose was to stop the mafia from taking full control over the US’s gambling market. Now, according to Flynt, the laws are outdated and even break constitutional provisions. The point is that the state’s gambling laws are not consistent with the federal interstate commerce laws that are, in turn, enshrined in the U.S. Constitution.

U.S. District Judge John Mendez is on Flynt’s side. The state was trying to dismiss Flynt’s lawsuit, explaining that he failed to demonstrate continuing harm from the prohibition, but the court let it run. If the state rules are directly regulating and overlapping the interstate rules, or their effect puts the domestic interests over the interstate interests, the court will immediately abolish them. Otherwise, the court will need to receive convincing evidence of significant harm from the state statute.

That all three licensees continue to be precluded from exploring other investment opportunities is not a consequence of the commission’s decision, as the dissent would have us conclude, but rather a result of the continued existence of the statutes themselves and the realistic threat of future enforcement.

Flynt has repeatedly been proving that his case is worth hearing, with the judges agreeing that the state statute has caused continued business losses, which is enough for keeping the challenge active. When California decided to shut Flynt down, it wasn’t ready for such strong pushback from the multimillionaire. The case is also being closely watched by other casino operators who have been only dreaming of changing the California gambling laws.