California Attorney General Xavier Becerra has issued an emergency shutdown order regarding a card room in Rancho Cordova. The Magnolia House Casino has been deemed underfunded, unable to cover the cost of customers as they cash out gambling chips. The AG’s office has declared that the card room will remain closed until they can show that they have addressed their financial issues.
The AG filed a complaint last week with the California Gambling Control Commission that they had already warned the card room’s management team about their financial issues. The warnings began in June and apparently nothing had been done to correct these matters.
According to the filing, several reviews of the Magnolia had been completed by Becerra’s office and found that they were operating underfunded, which put players at risk. When betting at a wagering establishment, players need to be able to cash in their gaming chips and go home with cash in hand. According to the AG, the facility is unable to provide money back to their players.
The report revealed that the card room also failed to deposit funds via third-party providers into separate accounts. The California gaming laws requires that such funds be placed in a separate accounts. Such facilities must work with third-party providers to handle the betting at the card tables.
Additional information states that the card room reportedly illegally used funds or converted funds in trust to cover their expenses to operate as they could not longer provide funds to do so.
Attorney General Becerra stated that there is no excuse for a gambling facility to fail to comply with the law and ignoring regulators. The AG stated that the Magnolia House put patrons at risk and the California Department of Justice is ready to take decisive action when appropriate and this is why they are shutting down the card room via the emergency order.