The Golden State needs all the help it can get with finally passing a law legalizing intrastate online poker. However, recent allegations against a former state gaming official reportedly have the potential to deal 2015’s chances for real-money online poker a fatal blow.
California’s attorney general has accused a former chief of the state’s gambling enforcement agency of misconduct related to his work with Casino M8trix, a San Jose card club targeted in a $119 million skimming investigation, the Sacramento Bee reported Sunday.
Basically, Attorney General Kamala Harris is alleging that Robert Lytle, who left the Bureau of Gambling Control in 2007 to work as a compliance officer for Casino M8trix, received confidential information about the state’s investigation into the card club.
Attorney General Harris is claiming that Lytle receiving the information “potentially compromised the effectiveness, and undermined the integrity, of the bureau’s investigations.” In other words, an allegedly serious violation of conflict of interest laws.
Lytle also currently has ownership stakes in multiple California gambling facilities.
According to a separate piece of reporting from journalist Dave Palermo: “Lytle also is accused in the complaint of directing agents to ‘cut back ongoing investigatory activities’ into [Casino] M8trix in December, 2007, a month before he retired from the bureau and after he began negotiating a contract to work as a compliance officer for the casino.”
It is not uncommon for former gaming regulators across the U.S. to eventually go into the private sector after leaving their positions in public office, after so-called “cooling-off” periods that vary by state. Scandals involving this transition are uncommon within the U.S. gambling industry. Lytle’s camp says he didn’t break the cooling-off period rule.
In addition to the Bureau of Gambling Control, the state of California also has a Gambling Control Commission, which is separate from the former and has its own duties.
Even though the accusations against Lytle don’t have anything to do directly with California’s ongoing online poker legalization debate, it could actually damage the already shaky likelihood of getting an online poker bill passed—if the appetite for gaming expansion is diminished in light of the Lytle complaint, according to Palermo’s reporting.
“An accusation suggesting there is corruption within the regulatory environment could become a sticking point with respect to a desire to expand gambling in the state with I-poker,” Richard Schuetz, a member of the state Gambling Control Commission, told Palermo.
“I hope they get this cleared up because this could create noise for the whole I-poker effort,” tribal gaming lobbyist David Quintana also told Palermo. “We’re talking about the regulatory body that is supposed to be overseeing I-poker."
Currently, there is one online poker bill on the table in California. Assemblyman Mike Gatto just recently announced proposed amendments to his online poker bill. Efforts in past years have failed because competing gaming interests in the Golden State haven’t be able to come to a consensus on the rules and regulations for a new online poker industry.
Gambling in California generates revenue of roughly $10.4 billion annually, when you factor in tribal casinos, commercial card rooms, racetracks and the state lottery.
According to utsandiego.com, Lytle is currently facing “administrative” discipline, and is not accused of criminal misconduct. The case against Casino M8trix is also still pending. The state alleges that the gambling facility hid its profits in a complex web of shell companies.
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