Marty Derbyshire larry flynt

It looks like pornography king and free-speech figure Larry Flynt will have to limit his casino interests outside of California. The owners and operators of some of the largest card rooms in the state are being forced to do the same.

Flynt owns and operates the Hustler Casino and Larry Flynt’s Lucky Lady Casino in Gardena. Late last year, he partnered with former Bicycle Club and the Commerce Casino partner Haig Kelegian Sr. and his son Haig Kelegian Jr. in filing a lawsuit challenging California’s law preventing card room owners from also owning casinos in other states.

California gambling laws prohibit gaming license holders from owning more than a one-percent interest in out-of-state casinos. Conversely, the laws also prevent out-of-state residents who own gambling operations from obtaining a gaming license in California.

In June 2014, Kelegian Jr. was fined $210,000 for having more than a one-percent stake in an out-of-state casino and was forced to divest.

Card room operators claim lost business opportunities

Both Flynt and Kelegian Sr. say the the laws forced them to pass up lucrative out-of-state casino business opportunities in 2014 and 2015. Flynt also claimed the laws put his stakes in other out-of-state adult businesses in jeopardy.

All three men claimed the laws violate the U.S. Constitution’s dormant commerce and substantive due process clauses. They additionally cited the law, originally designed to keep organized crime out of gaming in the state, as outdated. In Nevada, for example, similar laws have been updated, and large corporations with gambling interests in several states are allowed own and operate Las Vegas casinos.

Flynt and the Kelegians were not seeking damages. The group only wanted to see the law overturned.

Statute of limitations passed

However, US District Judge John Mendez dismissed the suit.

Ruling it was filed after a two-year statute of limitations had already passed, the lawsuit failed to demonstrate the harm done to the plaintiffs by the state restrictions, according to Mendez.

In the end, Mendez dismissed the complaint with prejudice. This means the plaintiffs cannot simply amend the complaint and file it again. Lawyers for Flynt and the Kelegians have said they will be appealing the ruling.

California card rooms

California gaming laws allow only certain types of gambling operations, including:

  • Casinos run by Native American tribes with state gaming compacts
  • The state lottery
  • Parimutuel wagering at horse racing facilities
  • Licensed card rooms

Only player-banked games, like poker, are legal inside the state’s licensed card rooms.

Image credit: s_bukley / Shutterstock.com

Marty Derbyshire
Marty Derbyshire - Martin Derbyshire is a veteran of the world of poker and gambling, having worked as a reporter, producer, and editor in the industry for more than a decade. He has traveled the globe interviewing high-profile personalities and contributes to a number of publications, including USPoker.com, PlayCA.com, and PlayNJ.com.