The billionaire founder of Hustler magazine, Larry Flynt, filed a lawsuit against California in his attempt to acquire several casinos out of state. As with other Flynt businesses, including pornography, it also got into trouble with the card game rooms.
But Flynt was unwilling to give up his fight with the state and pursued his goal of acquiring the casinos. Even though California has prevented it for several years when this lawsuit began. Although he had a setback early in the legal process, he recently managed to get a small victory.
Now California will have to defend itself. Since 1986, the state has implemented one that expressly prohibits owners of casinos in the state from acquiring other casinos outside of state lines.
Flynt is the owner of the Hustler Casino and Lady Luck Casino in Gardena, which are operated together with Haig Kelegian Sr. and Haig Kelegian Jr. Previously when the wife of the youngest of the Kelegians acquired a casino in Seattle, Washington, the state of California issued a fine against her family for violating the casino property law.
Flynt, as well as the Kelegians and his team of attorneys, consider California’s gambling laws to be outdated and at variance with federal laws on interstate commerce, which are constitutional.
They allege that perhaps in the past the law was necessary to prevent the mafia from taking over the casinos in the US But now this argument is no longer consistent.
Federal District Judge John Méndez, hearing the case, agrees with the plaintiffs’ judgment. California has already tried to have Flynt’s lawsuit dismissed and its gambling properties to stop working.
But, the judge will not do so on the grounds that:
“If a state statute ‘directly regulates or discriminates against interstate commerce, or … its effect is to favor economic interests within the state over interests outside the state,’ it is’ shot down … No further questions.”
And he added:
“However, if a state statute ‘fairly regulates’ and ‘only has indirect effects on interstate commerce,’ the courts proceed to ask whether those indirect effects ‘impose a significant burden on interstate commerce.’
Flynt has continued to work on the process and in the opinion of the court judges the continued loss of business forces the litigation to remain active. The state apparently did not think that Flynt would stay in the fight for that long. And if he continues to add arguments to his fight, he may win the battle.