KAM,L\LA D. HARRIS Attorney General of California

') SAIZA .I. DRAKE Senior Assistan1 Attorney General

3 RONALD L. DIEDRICH Deputy Attorney General

4 State Bar No. 95146 1300 I Street, Suite 125

5 P.O. Box 944255 Sacramento, CA 94244-2550

6 Telephone: (916) 322-1043 Fax: (916)327-2319

7 E-mail: Ronald.Diedrich@doj.ca.gov Atlorneysfor the Complainant

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9 BEFORE THE

10 CALIFORNIA GAMBLING CONTROL COMMISSION

11 STATE OF CALIFORNIA

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14 In the Matter of the Accusations Against:

IS

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EL DORADO ENTERPRISES, INC. dba HUSTLER CASINO, LARRYFL\~TREVOCABLETRUST

LARRY FLYNT TRUSTEE, TRUSTOR and BENEFICIARY, sole shareholder.

1000 W. Redondo Beach Blvd. Gardena, California 90247

License Number GEGE-000518

Respondent.

BGC Case No. HQ2010-0001AC

STIPULA TED SETTLEMENT; DECISION AND ORDER

Stipulated Settlement

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STIPULATED SETTLEMENT

PARTIES

Martin Horan IV (Complainant) brought the above titled Accusation solely in his

4 official capacity as the Acting Chief of the California Department of Justice , Bureau of

5 Gambling Control (Bureau).

6 2. El Dorado Enterprises, Inc., doing business as Hustler Casino ; Larry Flynt

7 Revocable Trust, Larry Flynt Trustee, Trustor and BenefIciary; sole shareholder (Respondent)

8 is a licensed gambling enterprise, California State Gambling License Number GEGE-000518.

9 JURISDICTION

10 3. On October 13 , 2011, Respondent was served with the above titled Accusation; as

I J well as a Statement to Respondent (Gov. Code, § 11505 , subd . (b)); Request for Discovery

12 (Gov. Code, § 11597.6); copies of Govemment Code sections 11507.5, 11507.6 and 11507.7;

13 and two copies of the Notice of Defense form (Gov. Code, §§ 11505 & 11506).

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On or about October 19 , 2011 , Respondent flled a timely Notice of Defense.

ADVISEMENT AND WAIVERS

Respondent has carefully reviewed, and has discussed with counsel, the legal and

17 factual allegations in the Accusation. Respondent has also carefully reviewed, and has

18 discussed with counsel, this Stipulated Settlement. Respondent fully understands the terms and

19 conditions contained within this Stipulated Settlement and the effects thereof.

20 6. Respondent is fully aware of its legal rights in this matter, including the right to a

21 hearing on all the allegations in the Accusation; the right to be represented by counsel of its

22 choice at its own expense; the right to confront and cross-exam the witnesses against it; the

23 right to present evidence and testify on its own behalf; the right to the issuance of subpoenas to

24 compel the attendance of witnesses and the production of documents; the right to appJ y for

25 reconsideration and court review of an adverse decision; and all other rights afforded by the

26 California Administrative Procedure Act (Gov. Code, §§ 11370, et seq.), the California

27 Gambling Control Act (Bus . & Prof. Code, §§ 19800, et seq.), and all other applicable laws.

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Stipulated Settlement

7. Respondent voluntarily, knowingly and intelligently, waives and gives up each and

2 every right set forth in paragraph 6 above; withdraws its .request for a hearing on the

3 Accusation; and agrees to be bound by this Stipulated Settlement.

4 STIPULATED AGREEMENT OF SETTLEMENT

5 8. Solely for the purposes of resolving the Accusation and for any other matter

6 involving the California Gambling Control Commission (Commission) or the Bureau,

7 Respondent admits that all the factual and legal allegations in the Second Cause for Discipline

8 in the Accusation are true, accurate and complete; and that such allegations provide a sufficient

9 legal and factual basis to discipline its license. More specifically, Respondent admits that its

10 license is subject to discipline pursuant to Business and Professions Code sections 19920 and

II 19922, and California Code of Regulations, title 11, section 2070, subdiviSIOn (b), in that on or

12 about September 4,2009, December 11,2009 and/or January 29, 2010, Respondent offered for

13 play at the Hustler Casino the game of twenty-one, which is a game not authorized by the

14 Bureau for play at that gambling establishment.

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9. Solely for the purposes of resolving the Accusation and for any other matter

involving the Commission or the Bureau, Respondent admits that all the factual and legal

allegations in the Third Cause for Discipline in the Accusation are true, accurate and complete;

and that such allegations provide a sufficient legal and factual basis to discipline its license.

More specifically, Respondent admits that its license is subject to discipline pursuant to

Business and Professions Code sections 19920 and 19923, and California Code of Regulations,

title 11, section 2070, subdivision (a), in that on or about September 4, 2009, December 11,

2009 and/or January 29, 2010, Respondent offered for play the game of twenty-one at the

Hustler Casino in violation of Gardena Municipal Code sections 5.24.430 and 5.24.460, in that

the game of twenty-one is not a game permitted under state law.

10. Respondent agrees to pay a fine in the total amount of $125,000.00 for the

26 violations noted in the Second and Third Causes for Discipline in the Accusation and admitted

27 to in paragraphs 8 and 9 above. Respondent further agrees that the entire $125,000.00 fine shall

28 be due and payable in full within 30 calendar days of the date the Commission adopts this

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Stipulated Settlement

Stipulated Settlement. Respondent understands and agrees that failure to timely pay the full

2 amount of the fine shall constitute a sufficient basis , in and of itself, to revoke its license .

3 II. Respondent agrees to also pay the Bureau the sum or $30,000.00 as the reasonable

4 costs of investigation and prosecution of this matte)' as provided for in Business and Professions

5 Code section 19930. Respondent furthe)' agrees that the entire $30,000.00 in cost recovery shall

6 be due and payable in full within 30 calendar days of the date the Commission adopts this

7 Stipulated Settlement. Respondent understands and agrees that fa ilure to timely pay the full

8 amount of the cost recovery shall constitute a sufficient basis, in and of itself, to revoke its

9 license.

10 12. The parties agree that this Stipulated Settlement fully resol ves their dispute

II concerning the Accusation and that no further discipline , including revocation or suspension,

12 shall be sought against Respondent 's license based solely upon the allegations contained within

13 the Accusation.

14 13. This Stipulated Settlement shall be subject to adoption by the Commission.

15 Respondent understands and specifically agrees that counsel for the Complainant and the staff

16 of the Bureau may communicate directl y with the Commission regarding this Stipulated

17 Settlement, without notice to, or participation by , Respondent or its counsel , and that no such

18 communication shall be deemed a prohibited ex parte communication.

19 14. By signing this Stipulated Settlement, Respondent understands and agrees that it

20 may not withdraw its agreement or seek to rescind the Stipulated Settlement prior to the time

21 the Commission considers and acts upon it. If the Commission fails to adopt this Stipulated

22 Settlement as its decision, this Stipulated Settlement shall be of no force or effect, and, except

23 for actions taken pursuant to this paragraph and paragraph 13 above, it shall be inadmissible in

24 any legal action between the parties . The consideration of this Stipulated Settlement by the

25 Commission shall not disqualify it from any further action regarding Respondent's licensure,

26 including, but not limited to , disposition of the Accusation by a decision and order following a

27 hearing on the merits.

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Stipulated Settlement

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SelllcmCnL including curies \lilh '.lgnatul-e" there(lI 1. shall il:l\-'t' UK same rOIH' HII(I eHeel (I " an

-' original.

C lmmissiol1 lIla\, W ilhulil I-urlhcl IHlllCl' or Inrmal rr()(;ceding _ i:-.suc and ['mer tlll Ordn

o CDIlSiSltl11 herewith Dnu J(kIPlill!:,'. lhis :"lipulmed Sellicll1cnl.

7 AOCEPTANCE

g I have car-d'll]l} read -and c:ollsidcred the <lhov[' Slipulated Sdtlemen1. I h~lve had the

9 OppoJ'lullilY tt. discu:;, ilS terms alld crrecl ~ \-\ illl leg;) I cuun:.,::I_ I :.IISll ulldersianci the.: Slipulmed

10 Sertlcment ancitllc efkcls ii will 11<1\,(' un 1ll)licclls\.· _ I J'wiiler undnslilnd that I will bl'

II ohliguttcl \() rll) 11 lUI;)) sum ors; I :'i:i.OOfl,OO ($125.[100,00 in fines and $3CJ,OOO.OO.in COSI

12 recovery I ancllhallhc failure 1(1 timcl)ra~ that entire amount coul(j re~uJI in the n~\,()catioll or

1,\ Ill) license _ l enter inlo l11i:-. Stipulaled Sct11el11enl VOillntaril), klJowingly alld inlelJi,!;enll) _ and

1 ~ agree 10 be bound by il~ terms,

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,/ Dnlcu:1I. rr/;~ __ :'(11::

h~ -:~~) h ' /';1' . v . /g~_<~/~ . . . I ifK ' ., . / ... ~,~

[1-r.)o~ad(1 Etlrerrri se~_ 1~1(; dbu ; HlIsll. rCasinu. Larry FIYI11 Revocllbk Trust Larry 1:;lynl 'trustee , Trustor and Benefic-iar:) 1 soil- s])urcboldcl. R.e:;pol1den1

A !lOrTle \ for Respondenl

StipulillP(\ Settlement

COMPLAINANT'S ACCEPTANCE

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4 Dated: April20, 2012. / / ::--::/ '" . -~~ ~" .--- . .

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Ma ; in r; J or an IV, Complainant Bureau of Gambling Control

The foregoing Stipulated Settlement is hereby respectfully submitted for consideration by

the California Gambling Control Commission.

Dated: April:25,2012.

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KAMALA D. HARRIS

Attorney General of California SARA J. DRAKE Senior Assistant Attorney General

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NALD L. DIEDRICH uty Attorney General

ttorneys for the Complainant

Stipulated Settlement

DECISION AND ORDER OF THE COMMISSION

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3 The foregoing Stipulated Settlement of the parties for the case of 111 the Matter of the

4 Accusation Agains!: El Dorado Enrerprises, Inc. dbo Hustler Casino, Larry Flynf Revocable

5 Trust, Lorry Flynf Trustee, Ti-ustor and Beneficiary, sale shareholder, BGC Case. No.

6 I-l Q20 1 0-000 1 AC has been adopted by a majority vote of the California Gambling Control

7 Commission as its final Decision and Order in this matter and is effective upon execution below

8 by the Commission members.

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Dated: (p - I "f"" 1'2.-

Dated: (p ( (t4 ( Qjj(;C

Dated:

Dated:

IT IS SO ORDERED

Cl/J---lin, Commissioner

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Decision and Order