Regulators Block Former Gambling Chief’s Cardroom Investment Deal

Empty courtroomInvestigators have halted the sale of Chula Vista cardroom the Village Club after authorities accused one of the prospective buyers of inappropriate dealings with regulators.

Robert E Lytle served as the state’s gambling enforcement chief until leaving the post to lend consulting services to several Golden State card clubs. Now, authorities charge Lytle with misleading regulators, violating conflict of interest laws and receiving inside information from sources at his old place of work.

Investigators highlight that in 2007, Lytle had begun working at a card club just one day after resigning from his government post. He now stands accused of violating the state’s mandatory cooling down period, put in place to avoid the temptation to use government connections in a new job.

But according to regulators, that’s exactly what Lytle did. The ex-gambling enforcer was said to have received sensitive documents from the Bureau of Gambling Control’s special agent in charge in 2012 and 2013, which he used to alert his cardroom clients of any upcoming legal troubles.

In one instance, Lytle griped to the new top gambling enforcement official complaining that investigators were showing up at one of his clients’ card rooms unannounced.

Lytle gets cozy with private enterprise

Lytle certainly wasted no time after turning in his notice at gambling control to get in bed with several cardrooms. Lytle already had a stake in two Sacramento card clubs before setting his sights on the Village Club.

While the charges he faces are administrative, not criminal, Lytle stands to lose the three gambling licenses he holds from the state.

In the Village Club deal, Lytle was be a director of the room and have a 5% ownership stake in company. But due to the recent allegations, the gambling board has suspended approval of the purchase, and the investment group has ousted the former gambling chief from its ranks.

The other investors won’t be able to proceed with the sale, however, until the city approves the new group members for conducting gaming operations. The complaint against Lytle will likely take months to resolve.

Authorities are also investigating the M8trix cardroom, Lytle’s first place of employment after quitting the state gambling agency. The cardroom is believed to have illegally stashed away millions of dollars through a maze of shell companies.

Lytle’s attorney, Jeff Kravitz, says that investigators are blowing the issue way out of proportion. “At the end of the day, this is a lot of smoke and not much fire,” he told the press.