On Monday afternoon reports came out that the California Bureau of Gambling Control (CBGC) ordered the emergency closure of a card room in California. The order was issued after it was unearthed that the Magnolia House Casino in Rancho Cordova, does not have adequate funds to cover the chips being used during game time.

Instead, according to a complaint filed by California AG, Xavier Becerra, the casino is using money from the chips to pay bills and cover other expenses. This is against the state gaming law, which requires that the money paid by the players to purchase chips is kept in a separate account from money used to cover operation costs.

The CBGC has launched an investigation into the casino which may eventually lead to revocation of the casino’s gambling license. The gaming venue, however, has refused to cooperate with officials from the Bureau. According to one detailed article that was then featured in the Casino.org website, is that during a press statement on Monday, Becerra said that a review of the casino’s finances has revealed serious financial crisis.

Records showed the casino could not operate any further as it does not have enough funds, and risks huge losses to the players and patrons if allowed to remain. He added that the establishment did not have any excuse for failing to comply with the law and breaching the public trust. He affirmed that the Department of Justice was ready to take action whenever necessary and that was why they were issuing the decree to have it closed.

Cardrooms in California specialize in house-banked games, which require them to hire a third party to act as the bank. In turn, the casino makes money by charging a small amount per hand. The law requires that money for the third party is kept separate from money used for running the casino. Magnolia is also accused of breaking this law.

There has being a long-standing dispute between the card rooms and the powerful tribes owning casinos in the state. The tribes claim the card rooms are breaking rules left right and center and the CBGC is doing little about it.

One of the accusations is that some of the casinos are acting as banks during games. This triggered the CBGC, of course with pressure from the tribes, to pass new rules requiring that during a game each player should act as a banker. The role would be passed on every two rounds, otherwise, the game should stop. Formerly, the players would have a choice of being a banker or not.

The new rules could mean the end for some casinos, especially those that are already struggling financially such as the Magnolia. This is because the new rules make the games more complicated, scaring off potential players who feel less capable of taking on the banking role. In turn, there would be a decline in the number of games played and ultimately the revenue earned.

Kadin Taim is a web journalist and news enthusiast. He has been writing about casinos, politics and technology. An avid casino enthusiast, Kadin has done his Masters in Finance and Bachelors in Journalism.

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