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Tribes Caught by Surprise

It’s been more than three years since.

BGC chief Robert Lytle brought down a web of political corruption and official misconduct on the state and its regulatory system.

Lytle in December 2014 was charged in a formal accusation by the state Attorney General’s Office with violating conflict of interest and confidentiality laws in connection with his consulting work for a card room targeted in a $119 million skimming investigation.

It was also disclosed that Lytle, later stripped of his card-room ownership and consulting licenses, issued an opinion letter days before retiring from the BGC in 2007.

That the player/dealer position in California/Asian games needed not be rotated, but merely offered each player at the table.

The Lytle opinion, which meant untold millions of dollars to the card rooms, angered the tribes.

The AG would later rescind the opinion, but it remains a guiding directive for much of the industry.

Tribes Caught by Surprise Meanwhile, card rooms in the Los Angeles area began stopping the collection fees in California/Asian games, clear evidence they were profiting off TPPPs in apparent violation of state law.

Although long suspicious the BGC exhibited a sympathetic bias toward the card rooms, the tribes were nonetheless not at all concerned with the industry’s evolution toward banked games.

They made light of the industry’s inability to control its internal operations and the GCC and BGC’s failure to regulate and enforce gambling laws.

“The tribes kept their eye off things for a few years,” says a tribal regulator who trained BGC agents. “The card rooms weren’t a threat.

We didn’t pay any attention them.

“So the card rooms kept pushing the rules. Nobody was interested in tangling with the card rooms because it wasn’t worth the time, and they had all these campaign contributions going to the state.

“Then all of a sudden you have all these violations of the rules and regulations. Then the Lytle thing flares up.

Then the card rooms stop taking the collection fees, which is supposed to be their only legal source of income.”

Tribes Caught by Surprise Cutting into the tribes’ market of high-end table game players was the proverbial straw.

The play at the tables for some Indian casinos amounts to 10 percent or more of gross revenues.

And unraveling the morass that is the California gambling regulatory system won’t be an easy task.

It will certainly make sports betting, internet gambling, online poker and DFS a quandary for both stakeholders and state officials.

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