A card room that was hanging on
State authorities have shut down the Magnolia House Casino, a Rancho Cordova card room in Sacramento, California because it was “seriously underfunded”.
insufficient funds to cover patrons who were looking to cash out their chips
The closure order on the Folsom Boulevard establishment was issued on Monday, with the card room found to have insufficient funds to cover patrons who were looking to cash out their chips.
California Attorney General Xavier Becerra gave the order for the emergency shutdown of the facility. The Attorney General’s office said: “The card room will remain closed unless it is able to demonstrate that it has addressed its funding issues.”
Numerous warnings ignored
Beccera’s office filed an accusation last week with the California Gambling Control Commission. It said the management of the Magnolia House Casino had been ignoring multiple warnings issued since June 2019 concerning its financial irregularities.
Numerous reviews conducted of the casino’s finance revealed significant underfunding that poses a risk of significant losses for players.
The Bureau of Gambling Control (BCG) requested that the casino management hand over certain documents on December 4. These were never submitted despite a deadline extension. The Attorney General’s Office also noted that the management “provided misleading and incomplete information.”
Between June 20 and December 24, 2019, the bureau issued five written warnings and a couple of notices to Magnolia House.
Other key failings
Another failing of the Magnolia House Casino, according to the Attorney General’s office, was that it did not deposit funds from third-party providers into “specifically designated”, insured accounts that were held separate from operational funds. This is required as per California gaming laws. Failing to do so, the facility was struggling to meet day-to-day expenses.
The card room also did not deposit the full sum from the third-party providers into the said accounts.
Finally, the majority owner of the casino, Thomas Sheridan, was discovered to have not disclosed his interest in a certain limited liability company at the time of his vetting to obtain a license for the card room.
What happens next?
The Magnolia House Casino management has just 48 hours to give a full accounting of its financial accounts to the authorities. It also has 72 hours to make deposits that will make up any shortfall in chip liabilities. If it fails to meet these deadlines, it will remain closed.
The facility would be able to reopen in the future if it meets certain conditions. It would need to be fully transparent with regard to the source of funds it uses to top up company accounts. The management would also have to provide weekly financial reports to the BCG.
Card rooms in California
In California, a card room cannot act as the house. Instead, it needs to work alongside third-party providers to facilitate betting at the respective tables.
These card rooms can only offer table games and not slot machines. At the time of its closure, the Magnolia House Casino had a total of ten tables in operation.
Casino manager Stan Seiff and Thomas Sheridan could not be reached for comment by the local press. In a phone call to the casino, an employee confirmed that the restaurant on the premises is still in operation.