Larry Flynt loses bid to overturn California casino ownership law

TAGs: California, haig kelegian, larry flynt

larry-flynt-california-casino-ownership-lawPorn mogul Larry Flynt has lost his legal quest to overturn California’s rules prohibiting out-of-state casino ownership.

Last December, Flynt sued the state of California based on his belief that its laws prohibiting state residents who hold cardroom licenses from also investing in out-of-state entities that operate casino-style gambling were unconstitutional.

Flynt, who operates two cardrooms in Gardena, the Hustler Casino and Larry Flynt’s Lucky Lady Casino, was joined in his lawsuit by father-and-son team Haig Kelegian Sr. and Jr., who collectively hold stakes in numerous state cardrooms, including the Bicycle Club and the Commerce Casino.

Flynt had claimed the state’s law had blocked his desire to invest in out-of-state casino opportunities in 2014 and 2015. Flynt also claimed he could be forced to divest his stakes in other out-of-state businesses if they added gambling options.

In June 2014, Kelegian Jr. was fined $200k by California regulators for transferring ownership of an out-of-state gambling venue to his wife. Despite the one-off nature of the fine, the Kelegians claim the fine had lasting impact and impaired their ability to invest in other gaming properties.

On Friday, revealed that US District Judge John Mendez rejected the Flynt and Kelegian suit because (a) their quest for due process had missed the two-year statute of limitations, and (b) they’d failed to demonstrate continuing harm from the prohibition, which would have extended their ability to claim damages beyond the two-year period.

Mendez notes that in order to plead a continuing harm, “the alleged wrongdoing and resultant injury must truly be ongoing or reoccurring; a mere continuing impact from past violations does not suffice.”

What’s more, while the court had previously granted the defendants’ request to dismiss the Flynt/Kalegian claims without prejudice, the court was now dismissing the amended motion with prejudice, barring the plaintiffs from filing another amended complaint. Regardless, Flynt and the Kelegians are expected to appeal the ruling.

California’s rule was apparently crafted in a day when the mob still controlled Las Vegas casinos, and thus the law was meant to keep these nefarious elements out of California’s gambling market, which has been completely free of criminality ever since. Ahem. And ahem. And, oh never mind


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