The attorney general of California Xavier Becerra has ordered Magnolia House casino to close down its doors with immediate effect. Well, of cause this move seems to have sneaked behind the back of most people as it came unexpectedly.
Now, in answering the question of why reports have it that the Magnolia House Casino, a 10-table gaming venue, has been accused of being seriously underfunded. While there are other addition accusations, this is particularly what the order to shut down its operations stands on.
This order comes weeks after the state fined Hawaiian Gardens Casino $3 million after it was found guilty of giving false information to the gambling regulators and going against the Bank Secrecy Act. Recently, the state has been on a crackdown for casinos that fail to meet the state regulation. The Hawaiian Gardens joined a long list of other casinos that had been fined millions of dollars.
The Magnolia Casino House has demonstrated in several ways that it does not have adequate finances to run its operations. First, it was accused of not having a separate insured account that contains money worth the gaming chips being used during games.
During games such as blackjack and baccarat, the players play against proposition players, instead of the usual player vs. player as in poker. The casino had contracted the proposition players from a third party by buying the chips from them. However, Magnolia only paid part of the amount originally agreed.
It is claimed the money that should have been used to pay the third party, was used to meet operating costs the casino would no longer meet. It was this same financial mishap that brought about the death of a popular online poker game, Full Tilt Poker, in 2011. On 4th December, the Bureau of Gambling Control (BGC), requested the Magnolia to provide certain documents. However, instead of being straight forward, the casino provided false information.
The casino has also received 5 warnings and 2 notices to cure of BGC between June 20 and December 24. Again, these warnings were not adequately addressed. The final strike came when the casino’s majority owner, Thomas Sheridan, failed to mention his interest in Limited Liability Company during his interview for his casino license.
The gaming venue has 48 hours to submit all its financial records and 72 hours to finish paying for the chips it acquired. If the Magnolia is willing to give details to its source of money as well as hand in weekly financial records to the BGC, it might reopen soon.
Recently, the state has proposed new regulations governing casinos. It claims there are some games that are being offered in casinos that are reserved for the tribal gaming operators. On their end, the casinos say they have the right to continue offering the games. However, they may soon be left out in the cold if their supporters in the legislator abandon them due to the many regulations that are emerging.