Card club agrees to record $5.3 million penalty

State law enforcement authorities say a settlement has been reached with Artichoke Joe’s Casino, a major California card club, for violation of money laundering laws and for misleading investigators. The casino agreed to pay a $5.3 million penalty.

“Today’s settlement includes the largest agreed-upon penalty in the history of California gambling regulation,” the California Department of Justice said Thursday in a written statement.

The department described the San Bruno casino, which has been operating for more than a century, as “a 51-table card room with the eighth-largest gross gambling revenue in the state.” The department said the issues included violations of the Bank Secrecy Act, which is aimed at money launderers.

The casino “failed to accurately report, reveal, or disclose in a timely manner” information required by law, according to the state. The Gambling Control Bureau, part of the state Justice Department, conducted the investigation as part of a “licensing disciplinary proceeding,” authorities said.

The casino declined to comment.

Earlier, Artichoke Joe’s had been hit with a $5 million penalty imposed by federal authorities for reporting irregularities between 2009 and 2017, the largest federal penalty against a California card room. That probe involved the Financial Crimes Enforcement Network, a federal agency.

In that settlement, the casino admitted to failing to maintain an effective anti-money laundering program and failing to report certain suspicious activity. according to the state.

California’s 1998 Gaming Control Act requies casinos “to make timely, full, and true disclosure to gambling regulators.”

The Justice Department said the Gambling Control Bureau found that Artichoke Joe’s “was in violation of the law when it failed to accurately report, reveal, or disclose in a timely manner” that the Financial Crimes Enforcement Network “or any other federal agency was examining the casino with respect to the Bank Secrecy Act.”

Both the failures to disclose and the admitted violations of the Bank Secrecy Act breached the casino’s duties and responsibilities under the Gambling Control Act, state officials said.

In addition to the $5.3 million penalty, the casino and its owners will reimburse the state for investigative costs and complete a required 36-month compliance period.

Artichoke Joe’s ability to hold its state gambling license will be contingent upon meeting the terms of the settlement throughout the entire 36 months, the state said.

The previous largest penalty was $3.1 million against the Hawaiian Gardens Casino in 2019.