Souza

BACKGROUND

As partial owner of Seven Mile Casino (Casino) — a 20-table card room in Chula Vista, licensed by the Commission — Souza received a $3 million loan to build a new card room. In return, Souza’s creditors received the option to convert the loan into an ownership interest in the Casino. In addition to Souza’s failure to disclose this financing arrangement to the appropriate state authorities, the Casino engaged in “off-the-books” transactions (including a pattern and practice of “financial dealings involving hundreds of thousands of dollars without adequate documentation”) and lacked adequate funds to cover the value of chips used by patrons. In December 2015, the Bureau filed an accusation and statement of issues (accusation) seeking to revoke Souza’s and the Casino’s gambling licenses and “impose the maximum fine allowed by law.” The accusation contained three “causes” for discipline — Souza was “unqualified for continued licensure,” he failed to “reveal

2 material information to the Bureau,” and he failed to “have sufficient monies on hand to cover players’ funds on deposit.” In February 2017, to resolve the accusation, the Bureau and Souza agreed to a “stipulated…