The Bike Casino Raid
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.”
Phone Reservations: (800) 781-2456 General Inquiries: (562) 806-4646. WE ARE BACK AT THE BIKE. We've missed you and we are so excited to get back to doing what we do best, creating outstanding entertainment experiences at The Bike, 24 hours a day, 7 days a week. Shuffle up and deal. California’s Bicycle Casino reopened Wednesday after it was shut down in a government raid at around 7 a.m. Local time on Tuesday. The casino said that it reopened at 3 a.m.
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 Associationtold 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.
The Bicycle Casino Raided
Less than 24 hours after being raided and shut down by federal agents, the Bicycle Hotel & Casino in Bell Gardens was reopened Wednesday morning, according to information reportedly provided to the Los Angeles Times by law enforcement officials. One of Southern California’s largest gambling rooms, the facility was raided by investigators from the Los Angeles High Intensity Financial Crime Area Task Force when they entered the casino’s main floor and seized thousands of financial records during a money-laundering investigation.
The Bike Casino
Betting ended abruptly at the casino at approximately 7 am on Tuesday morning and the facility was closed for about 20 hours. Agents from the task force, which includes investigators from Internal Revenue Service, U.S. Immigration and Customs Enforcement, the U.S. attorney’s office, and the California Department of Justice’s bureau of gambling control, led the raid. The focus of the probe will be whether the club was used by individuals to launder funds by using dirty money to place bets before trading in their chips for clean cash, according to what the news agency was reportedly told by law enforcement sources that are familiar with the investigation.
Casino spokeswoman, Becky Warren, said that management was “cooperating with authorities,” but she declined to add to her statement at the time. It’s not the first time the Bicycle has been the focus of law enforcement efforts. Control of the casino was seized by the IRS and the Drug Enforcement Administration in April 1990 after authorities discovered the casino’s construction was financed with laundered drug money. A jury found that Florida drug smugglers had funded $12 million of the $22 million in construction costs.
Bicycle Casino Raid
Partial ownership of the casino was taken over by the federal government in 1991, with its share eventually being sold to a British gaming company five years later. By the time the government had sold its share of the Bicycle Club in 1996, it had reportedly made a substantial profit from its share of the casino. The casino, which was founded by George Hardie Sr. in 1984, is now privately owned by Bicycle Hotel & Casino LLC and is host to the Word Poker Tour and the World Series of Poker.