For more than four decades, the city's gamble with card clubs proved profitable. By the mid 1970s, six casinos were dealing cards nightly. But the opening of the Bell Club in August, 1980, ended Gardena's exclusive hold on the poker market. Even City Council decisions to allow liquor, 24-hour operations, food and special jackpots couldn't keep three of the casinos from folding. City poker revenues fell from a high of roughly $4 million in 1979 to approximately $2.3 million in fiscal 1984-85. To offset the losses, a special city agency was formed to attract new business. As a result sales tax revenue has climbed by $1 million since 1982. Council members also adopted a 5% utility user's tax that now generates more than $2 million a year. "We avoided the trap," said City Manager Kenneth Landau, "of relying too heavily on poker money."
Almost as soon as the city received its first check from the Bell Club, the money was spent on salaries and essential services, fostering a dependency on poker dollars that has proved costly. A year ago, the city expected to collect about $1.8 million in poker fees, but it wound up with only half that. In fiscal 1985-86, the city will postpone $500,000 in street repairs and cut $300,000 in operating expenses because of the club's uncertain future. In the first five months of this year, the casino lost more than $1 million, and even with a management change, it is still losing about $150,000 a month.
The California Commerce Club has pumped $3.5 million into city coffers since opening in August, 1983. Estimated poker revenues in fiscal 1985-86 will make up about 25% of the city's $7.4 million police, fire and public safety costs. At the time the club opened, recalls city Finance Director John Mitsuuchi, "We faced some tough questions--either make cuts or adopt new taxes. The poker revenue pulled us through; no cuts or new taxes."
The Huntington Park Casino was in trouble from the day it opened in March, 1984. Its location several miles from a freeway, and the lack of solid financial backing, plunged the casino immediately into money troubles, ending in bankruptcy. Wary of promises the club would deliver $750,000 a year in revenue, the city hedged its bet by not earmarking poker dollars for specific purposes. During the first year, the city's share of casino revenues was about $300,000, or roughly 2% of the city's $14 million budget.
The Bicycle Club, which opened last November, has become this city's lucky charm. Estimated revenues from the popular club helped produce a fiscal 1985-86 budget of $10.8 million--about 21% larger than last year's. Officials estimate the city may bank $2.8 million in poker fees this year. The money has already been used to boost city employee and police salaries by 8% to 15%. "This is the biggest shot in the arm we've ever had," said Roger McComas, mayor of the largely Latino city of 37,000.