The Bike Casino Raid

This week, the Bicycle Casino was raided and shut down for nearly 24 hours by federal authorities over suspected money laundering happening inside the property. According to Steve Stallings. 345 reviews of The Bicycle Hotel & Casino 'As card rooms go, The Bicycle is one of the better ones in the Los Angeles area. It's expansive, with a huge poker floor, an Asian games section and a courtyard where you can still smoke and gamble at the same time. Parking is relatively easy, with valet parking at the front entrance and self parking in the rear. Minutes from Los Angeles, The Bicycle Hotel & Casino features luxurious rooms & suites, exciting poker tournaments & Asian card games, a relaxing spa, outdoor pool and innovative dining experiences. Welcome to NFBC! Established in 1969, the Niagara Frontier Bicycle Club is Western New York's largest bicycle club, with over 425 active members. The club emphasizes safe and courteous riding in an extremely social environment. We ride at an athletic pace, and we welcome new riders!

One of California’s most iconic gambling rooms, the Bicycle Hotel & Casino, has just been shut down after being raided by federal agents in connection with a criminal fraud investigation. During the raid, the casino’s two parking lots were sealed off, while inside the building federal agents carried off thousands of the business’s financial records.
The dramatic scene played out at around 7 am on April 4th, with the Los Angeles High Intensity Financial Crime Area Task Force heading the team of agents which entered the Bicycle Hotel in order to establish whether the venue had been laundering dirty money at its gaming tables. Taking part in the raid were agents from U.S. Immigration and Customs Enforcement (ICE), the Internal Revenue Service (IRS), the California Department of Justice’s bureau of gambling control, and the U.S. attorney’s office.
Needless to say, the situation caused concern amongst the people already patronizing the establishment, especially after being told to stop gambling and remove their hands from the gaming tables. Some of the casino’s customers expressed concern that the chips they were holding may now have been rendered worthless, but were subsequently reassured that this wasn’t the case, and that the Bicycle Hotel & Casino would reopen after the completion of their investigation in a few days time.
Interestingly, the majority of those gathered seemed more concerned that they may have been cheated while playing at the casino’s 185 card game tables, with many complaining that they could never seem to win, and citing rude pit bosses and fishy behavior. Commenting on their concerns, Whittier law school professor, Nelson Rose, stated:
“From a public relations point of view, this was horrible. The agents closed the active casino. Some players talked about cheating. But this is far from cheating. This is about someone passing money through an establishment.”
This is not the first time the Bicycle Hotel & Casino has been in trouble with the law, though, and in 1991 the federal government claimed part ownership in the property after it was found to have funded more than half of its $22 million construction bill using money from Florida drug smugglers. The government later sold off its share to the British gambling firm, Ladbroke.

[toc]In a dramatic week for California’s world famous Bicycle Casino (the Bike), federal agents entered the casino to seize financial documents and shut down all play. A day later, on Wednesday, the casino reopened at 3 a.m. in the morning.

On Tuesday morning, Virginia Kice, Western Regional Communications Director/Spokesperson, U.S. Immigration and Customs Enforcement (ICE) stated:

“A federal search warrant is being executed today by members of the Los Angeles High Intensity Financial Crime Area Task Force, which includes U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; IRS Criminal Investigation; the California Department of Justice, Bureau of Gambling Control; and the United States Attorney’s office.”

The warrant was filed under seal in relation to an ongoing investigation. As a result, Kice could not comment on the “scope or nature of the investigation.”

On behalf of the casino Becky Warren said:

“We are working with authorities and currently do not have additional information,” according to the statement. As soon as the federal agents have completed their work, we will be in full operation.”

No allegations that the casino is at fault

According to unconfirmed local media reports, the investigation is related to possible money laundering at the casino.

The reports don’t suggest that the casino itself was responsible. Rather, the players may have been bringing in “dirty” cash and playing at the tables to “clean” the money.

Shortly before midnight on Tuesday, the Bike Tweeted that it would re-open in a few hours:

The Bicycle Hotel & Casino will be open and in full operation at 3am. pic.twitter.com/YU5R8GP3Oh

— Bicycle Hotel Casino (@BicycleCasino) April 5, 2017

Additionally, a notice on the casino website now says:

“The Bicycle Hotel and Casino is open and in full operation.

We are serving our customers and have resumed normal operations. Our priority is to provide a safe and fun environment for our guests.”

Echoes of an embarrassing past

The Bike has an embarrassing history, redolent of organized crime, which, even today, gives the casino a spicy atmosphere.

The casino was seized by the US government in 1990, after a jury found that $12 million of the $22 million construction cost came from Florida drug money.

In a case against one of the Bike’s founders, Sam Gilbert, the filing alleged that he and his partner came up with the idea of opening a card club specifically for the purpose of laundering money:

“The level of complicity in the money laundering plan varied among the LCP partners. The three original LCP partners – Dale Lyon, Julie Coyne, and David Pierson – were brought together in 1983 by Michael Gilbert’s father, Sam Gilbert. Sam, a wealthy Los Angeles businessman, was the first Gilbert to establish ties with the Kramer family when he befriended Benjamin Kramer’s father, Jack Kramer, in 1978. At that time, Jack Kramer and Sam Gilbert came up with the idea of building a legal card club for the purposes of laundering Benjamin Kramer’s dirty money.”

Government casino ownership was almost equally scandalous

Government ownership was also marred by scandal. So, in 1996 it sold its stake to British gaming company Ladbrokes, for $25 million.

A four-hour hearing by the US Senate permanent subcommittee on investigations included the statement by Committee Chairman William V. Roth Jr. (R-Del.) that the government’s period of ownership provided;

“one of the most bizarre stories in [the committee’s] long history of uncovering waste, fraud, and mismanagement in government programs.”

Finally, under Ladbroke’s ownership the casino returned to respectability.

The Bike is an advocate of internet poker in California

The Bicycle Casino Raided

Since becoming the first casino to broadcast live poker games over the internet in their popular Live at the Bike series, the Bicycle Casino has been an advocate for internet poker.

Bicycle Casino Raid

In 2014, it joined with a coalition of other card clubs and Indian tribes to lobby for legal regulated online poker in California.

Bike Casino Reopening

The coalition also includes the Commerce Casino, Hawaiian Gardens Casino, Morongo Band of Mission Indians and the world’s biggest online poker operator PokerStars.

The Bike Casino

California legislation to license internet poker may be quiet at the moment, but should pick up pace later in the year.

The original plan for the coalition was to launch a combined operation. The idea was for casinos to use PokerStars software and branding to offer online poker in California.

Recent versions of legislative proposals have attempted to exclude PokerStars from the market for a period. Another proposition suggested PokerStars pay a huge sum of money before obtaining a license.

If that happens, presumably the coalition, including the Bicycle Casino, will have to rethink its plans.