Two men with ties to a Utah polygamous sect, and who own a casino in Lake Elsinore, Calif., should receive more time to apply for gambling licenses or sell to a cousin, an administrative law judge says.
It’s the latest move in a two decade saga over the legal standing of the small casino attached to a motel. The “proposed decision” was more favorable than not to the Lake Elsinore Casino, which also has operated as the Sahara Dunes Casino.
While Administrative Law Judge Theresa M. Brehl said the casino and its owners should not yet be awarded a permanent gambling license, she criticized California’s regulators for delays and not explaining to the owners everything they needed to apply for licenses.
One of the casino’s owners, Ted E. Kingston, should be allowed to resubmit his management firm’s application, Brehl said, while Kingston’s co-owner and second-cousin, Joseph O. Kingston, should not have to apply for a gambling license at all.
Instead, Joseph Kingston should be allowed to transfer his stake to one of his cousins, Chad Benson, who then should apply for a gambling license, Brehl said.
Documents show how Benson and both Kingstons have ties to the Utah-based Davis County Cooperative Society, also known as the Latter-Day Church of Christ or the Kingston Group. Neither the applicants’ religion nor polygamy is discussed in Brehl’s proposed decision, dated June 7 and made public last week.
However, the 70-page document further describes the ties the casino, which sits between Los Angeles and San Diego, has to Utah.
Joseph Kingston is described as residing in Utah, and a Salt Lake City accountant and a West Jordan physician, both with their own ties to the Kingston Group, submitted affidavits in the licensing case. The accountant completed a valuation of the casino. The physician described Joseph Kingston’s medical conditions.
Joseph Kingston, 67, says he wants to transfer his half of the casino because he is suffering from diabetes and other ailments, according to Brehl’s proposed decision, which also says Joseph Kingston’s wife has suffered from breast cancer. Benson has worked as the casino’s chief operating officer since 2015.
“I asked for nothing in compensation as I do not believe my shares have much value,” Joseph Kingston wrote in a 2016 letter quoted in Brehl’s proposed decision, “and it is more important for me to do away with this large amount of financial obligation and allow me to free up my portfolio for my family."
California requires casinos, their owners and important officers to be licensed. Because of his declining health and desire to sell, Joseph Kingston has not submitted the necessary paperwork, and that was a major reason California’s gambling regulators sought to deny Lake Elsinore Casino a license, which could have forced the betting spot to close. Regulators also said Ted Kingston’s application was incomplete.
The case has dragged on since 1999, when the casino was issued its first provisional license. It has been renewed annually while regulators, in fits and stops described in Brehl’s writings, sought more information about Ted and Joseph Kingston.
There was confusion in 2016 over what paperwork had to be submitted and even about the legal name of the casino, Brehl wrote. Regulators also contended that Joseph Kingston couldn’t sell his shares in the casino if he wasn’t licensed to own one, but Brehl said that requirement was not in the law.
Joseph Kingston is a full brother to Paul E. Kingston, leader of the Kingston Group. By not having to apply for a gambling license, Joseph Kingston will avoid having to disclose his finances, his business dealings or the names of his children, other people with whom he lives and his siblings.
The California Gambling Control Commission can reject Brehl’s proposed decision, and issue its own ruling. Either way, Lake Elsinore Casino can appeal. If the commission accept the recommendations by mid-September, Brehl gave all sides deadlines that would extend the case into 2020.
A California lawyer representing Lake Elsinore Casino and its owners did not return messages seeking comment Monday.
It’s unclear why Joseph Kingston believes his ownership stake has little value. While his casino lacks the glitz and floor space of a Las Vegas-resort, in recent years, Lake Elsinore Casino has undergone renovations that have included the addition of off-track horse wagering. The land and improvements alone are worth almost $4.5 million, according to the county assessor.
Kingston Group members often practice an old Mormon concept of a united order. In the Kingston Group version, a business will divert its income to the church, with the church then returning money the business needs to cover expenses.
Kurt Eggert, a professor at Chapman University School of Law, in Orange, Calif., and an expert on gambling law, said the administrative judge’s ruling paints California’s Bureau of Gambling Control as “inept and incompetent.” The bureau is the investigative arm of the state’s gaming regulators and was responsible for gathering the information required to grant or deny Lake Elsinore Casino a license.
“It’s much worse than just paperwork snafus,” Eggert said. “It’s just sitting on their hands.”
The delays appeared to have persuaded the judge that failing to provide information on the casino’s ownership was no big deal, Eggert added.
“The bureau’s job is to make sure bad people aren’t running casinos and here it took 20 years to enforce the requirement that the casino provide them information.”
Ted and Joseph Kingston have their supporters.
Lake Elsinore Mayor Steve Manos last week told The Press-Enterprise in nearby Riverside that he was pleased with the ruling and that his city would miss the jobs and revenue the casino generates if it had to close.
“Nobody can control who they’re related to,” Manos told the newspaper. “All of those concerns (about the Kingston Group) don’t appear to have anything to do with the license.”