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LOCAL ELECTIONS : Odds Better for Card Clubs in 4 Cities

June 04, 1993|KEN ELLINGWOOD | TIMES STAFF WRITER

A recession that has cursed municipal budgets looks like Lady Luck to backers of four Southland card casinos facing voter approval Tuesday.

The proposed card clubs will be on ballots in West Hollywood and Pico Rivera in Los Angeles County, and Cypress and Stanton in Orange County--cash-starved cities where cutbacks and fears of new taxes have created the best odds yet for gambling backers, even those thwarted before.

Casino developers are dangling the promise of millions in cash for City Halls, far from the reach of state officials who have raided local tills to balance the state budget. The state's 300 card clubs generally pay host cities 8% to 15% of earnings. That tax and other fees top $10 million a year at the most successful clubs, although some clubs have closed.

Compton and Inglewood approved clubs last year, joining the five other casino cities in Los Angeles County. Lynwood and Bellflower will vote on card clubs later this year and officials in Anaheim and Garden Grove are studying gambling proposals.

"If it weren't for the financial situation, we wouldn't be looking at it," said Cypress Mayor Gail H. Kerry, who supports a $30-million casino proposed at Los Alamitos Race Course. Track owners are promising the city up to $12 million a year, plus perks that include a $1-million scholarship fund.

"If this thing goes down, we have to start cutting services," Kerry said.

Critics say the casinos will draw seedy characters and breed crime ranging from money-laundering to "follow-home" robberies.

"It sends children a message that gambling is an answer," said the Rev. Richard Ochoa, who heads the casino opposition in Pico Rivera. "It's detrimental to family values."

Besides adding to police costs, opponents say, gambling income will become unpredictable as clubs crowd a local market that relies heavily on Asian-American players.

"Everyone wants to jump in. And the bottom line is, there just aren't enough players available," said George G. Hardie, general manager of the Bicycle Club in Bell Gardens. "If it gets too crowded, nobody will make money."

Some cities have hit the jackpot with card clubs. The Bicycle Club generates nearly $11 million for Bell Gardens, about half its budget. The Commerce Club pays about $11 million a year to the City of Commerce, roughly the amount the city gets from all its sales taxes. It has also acted as a shield against a three-year sales tax slump, said city Finance Director Tom Bachman.

"If you take everything into account--the acreage required for a shopping mall, the amount of traffic--I think we're probably better off with a card club," said City of Commerce Administrator Louis Shepard.

Casinos are not recession-proof. When a Bell club closed last year, officials had to look elsewhere to replace the $80,000 a month. Gardena has watched four of its six clubs shut down during the past decade, in part because they had trouble competing with newer clubs in other cities.

The lure of easy money is powerful even to cities that have spurned casinos before. West Hollywood voters overwhelmingly turned down a card club in 1990, but a scaled-down version has moved key business leaders to switch sides, and a close vote is expected. Sponsors dropped poker in favor of panguingue--a game related to rummy--but the big difference now is talk of a new utility tax to stem a projected $1-million shortfall. The 4% levy is in a budget proposal that goes before the City Council on Monday, hours before polls open.

John Duran, a West Hollywood civil rights lawyer, said the city may need the $1 million promised annually by card club backers to save AIDS services.

"Anywhere we can find money, we need to do it," Duran said.

Pico Rivera, which last year imposed a utility tax and cut city jobs to close a $1.8-million gap, is being wooed with up to $6 million a year from a $35-million casino proposed next to the San Gabriel River Freeway.

Two initiatives may introduce casinos to Orange County.

In Cypress, cash shortages have delayed street repairs and prompted talk of a utility tax. Divided city officials are awaiting election results before making more cuts. Stanton's City Council rejected a card club in 1987, but proponents are saying a casino might allow the city to drop its months-old utility levy.

"Cities are feeling crunched. This is an opportunity for an entrepreneur to come in and sell the city on something that will make the city money without costing the city anything," said Sandra Sutphen, a political science professor at Cal State Fullerton who has studied card clubs and is working for the proposed Cypress casino.

Crime fears are the biggest brake on the casino rush.

Law enforcement officials charge that the clubs are dens for organized crime and other corruption. Federal authorities seized a portion of the Bicycle Club in 1990 over ties to Florida drug money, then fined the club $4.6 million last year for not reporting large cash transactions. Former city officials in City of Commerce and Bell were convicted on corruption charges tied to card clubs.

But Sutphen said her research shows no connection between card clubs and street crime. City of Commerce officials said the local shopping center has seven times the number of reported crimes as the huge casino there.

"It's really hard to call," said Jack Swank, a former manager for Evel Knievel now campaigning for the Cypress casino. "I'd bet we pass it. But I wouldn't lay odds--put it that way."

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