CASINO M8TRIX OWNER FINED MILLIONS BY STATE GAMBLING REGULATORS, STRIPPED OF GAMING LICENSE

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San Jose’s Casino M8trix is setting records for all the wrong reasons.

On May 26, the California Gambling Control Commission stripped M8trix ownerEric Swallow of his ownership license and fined him a record $13.7 million for violating state gaming regulations. Chief among these was misleading regulators about the nature of, and financial ties to, companies the card room paid over $80 million from 2009 to 2013, according to Commission documents.

Swallow could still be in good financial shape even after paying, according to the decision, which cites an unnamed potential purchaser estimating the value of Swallow’s 50 percent stake at $50 million. Swallow has already declared his desire to sell his stake, and one potential buyer is John Park, who owns five card rooms in California and filed for an ownership license with San Jose in April 2015.

It’s not a surprise Swallow was stripped of his license. I n December, an administrative law judge recommended the Commission take that action based on an investigation by the Bureau of Gambling Control. But the size of the penalty dwarfs the judge’s recommended $430,000 amount.


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The decision goes into effect June 27, but the story may not be over.

In an email, Swallow’s attorney Allen Ruby wrote that his client intends to challenge the decision, most likely in Superior Court, and that the first steps in that process will take place within the next 60 days.

The huge penalty blows away the previous record $1.5 million fine levied against (wait for it) Casino M8trix and co-owner Peter Lunardi in May 2015 for related accusations. That fine was part of a settlement with Peter and his wife Jeanine Lunardi that allowed them to keep their gaming licenses. The Lunardis control the other 50 percent of Garden City Inc., the entity that owns M8trix.

In 2008, Swallow and the Lunardis set up three limited liability companies in Nevada, which does not have an income tax, to ostensibly provide software, table games and consulting services to Garden City Casino, the card room that was replaced by M8trix in 2012. From 2009 to 2013, these LLCs received $81,762,000 from Garden City.

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