The raid and subsequent shutting down of the Bicycle Casino by the Los Angeles High Intensity Financial Crime Area Task Force (comprising several federal agencies) was one of the biggest news stories last week.
The popular California card room just outside of Los Angeles remained closed for about 20 hours. Agents from the IRS, Homeland Security and ICE seized thousands of financial records in what appears to be an ongoing money laundering investigation. Officials have refused to comment about the exact nature of the investigation.
Upon reopening, “The Bike” issued the following statement:
“We are serving our customers and resuming normal operations immediately. Our priority is to provide a safe and fun environment for our guests.”
According to Bicycle Casino spokeswoman Becky Warren, the casino is fully cooperating with authorities.
Despite social media concerns, chips in play and players’ money on deposit were never in jeopardy.
Ongoing investigations into money laundering
Several California card rooms have been targets of money laundering probes. That follows stronger Bank Secrecy Act enforcement procedures put in place by FinCEN in November 2007.
Since the stricter policies came into existence, several card rooms have run afoul of these new procedures:
- In 2015, Oaks Card Club was the first California card room to come under FinCEN’s scrutiny. The club paid $650,000 for violating the reporting and program requirements of the Bank Secrecy Act.
- Also in 2015, Normandie Casino (now owned by Larry Flynt and known as Lady Luck Casino) was dealing with its own money laundering investigation. In 2016, the casino and its owners paid a total of $2.3 million to FinCEN. The also had their gaming licenses revoked. That is how Flynt came to purchase the property.
- In 2016, Gardens Casino (formerly Hawaiian Gardens Casino) reached a settlement agreement with FinCEN. That stemmed from a money laundering investigation dating back to 2009. The $2.8 million settlement is the largest of its kind. It has put the venerable casino’s gaming license in jeopardy.
The Bike has seen raid, seizure before
As odd as the government raiding and shutting down a licensed casino may seem, this is the second time The Bike has gone through a major investigation conducted by a joint federal task force.
In 1990, an investigation by the DEA and IRS discovered a significant portion of the money used in the casino’s construction was laundered drug money. A year later, a jury determined more than half of the $22 million used to build the casino was from ill-gotten means. The result: Awarding partial ownership of the casino to the federal government. The government sold its ownership to Ladbrokes in 1996.
Impact on California online poker efforts
There is some chatter that the raid could add a new layer of complexity to the ongoing fight over the suitability of PokerStars in California.
The Bicycle Casino is one of PokerStars’ announced partners in the state. So we could potentially see the fracturing of the PokerStars coalition. Another possible result: The Bicycle Casino (and Gardens Casino) being deemed ill-suited to be licensed with or without PokerStars.
“They’re part of the PokerStars relationship,” Steve Stallings, the chairman of the California Nations Indian Gaming Association told Card Player. “When a card room gets raided by federal law enforcement, it only adds to the problems of PokerStars and some of its partners, not all of them, and this whole kind of suitability issue that will affect everyone.”
Ultimately though, the situation at The Bike seems to be more about tribal gaming versus commercial card rooms than PokerStars’ suitability.