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Card Club Bill Would Suit Some in Industry : Legislation: The plan for greater state scrutiny of gaming interests could also make it easier for gambling to spread by opening the door to large casino firms.


SACRAMENTO — If convicted card-room loan shark Hollman Cheung believes California should clamp strict controls on the state's burgeoning gambling industry, who wouldn't?

Very few, most agree, and the Legislature is trying again this year to create an Honest John commission free of corrupting influences to watch over California's 256 card clubs. No poker emporium could operate without scrutiny by the powerful, independent panel.

As a repentant Cheung put it, writing to Atty. Gen. Dan Lungren from his federal prison cell two weeks ago, a gambling commission "is desperately needed. . . . I have seen money-laundering on many occasions and I have seen it take many different forms."

He should know. Last year, after running the Asian games section of the Bicycle Club in Bell Gardens for several years, Cheung was convicted of loan sharking, extortion and racketeering. He was sentenced to 12 1/2 years for his sideline activities at the card club.

But despite widespread support--from anti-gambling moralists, Las Vegas interests, many card room proprietors and a convicted felon--the lead gambling-control bill as now drafted invites a seeming paradox.

Proponents of a commission are also urging enactment of measures that could actually expand the opportunities for legally laying a bet in California. Additionally, critics question whether the state's new gambling environment would be as clean as is claimed.

At its first substantive hearing last week, a bill sponsored by Lungren and authored by Assemblyman Phillip Isenberg (D-Sacramento) was approved 11-3 by an Assembly committee with the expansion provisions intact.

Besides setting up the California Gambling Control Commission, the proposed legislation drops the barriers to publicly traded corporations, repealing laws that--except on Indian reservations--have kept their gambling activities out of the state. Big casino corporations such as Caesars World, Circus Circus and Hilton Hotels could qualify for a California card club license, and each has a lobbyist in Sacramento pursuing its interests.

Also allowed in as card club operators would be any company, publicly traded or not, that is now banned because it runs gambling operations elsewhere that California prohibits. That provision is part of the reason that Hollywood Park racetrack in Inglewood cannot operate the card club on its own grounds. Because it is both a publicly traded company and because of board chairman and major stockholder R. D. Hubbard's dog-racing interests in Oregon, the track is prohibited from operating the year-old club, and must lease it to outside interests.

According to state Senate leader Bill Lockyer (D-Hayward), the desires of Hollywood Park lie at the center of the seeming contradiction: New, more restrictive controls on the industry on one hand; opening the state to major gaming interests on the other.

To win legislative support for the new controls, Lockyer said Lungren is again supporting a bill containing elements sought by Assemblyman Curtis Tucker Jr. (D-Inglewood) that would allow Hollywood Park to own and operate its card club.

Tucker is carrying a bill this year that would do little more than lift restraints on Hollywood Park, a major moneymaker and employer in his district. The Assembly committee that approved the Lungren bill also approved the Tucker bill, 13-0.

Motivating Lungren, at least in part, is his desire "to become California's gambling czar," Lockyer said. Along with the tough new controls over gaming at the state level, a new division of 70 investigators would be created in the attorney general's office.

Lungren acknowledged that, like last year, he is working with Tucker "and all sorts of groups to try to get the adequate votes necessary to pass the bill, and we have not compromised our principle in any regard." But he denied he was maneuvering to become a "gambling czar."

With the creation of a licensing commission, Lungren said, he would be giving up power--"a strange way to become czar." He referred to the small unit in his office that now licenses card clubs, an authority it would surrender to the commission.

Last year, the major battle over new gaming laws featured a standoff between Gov. Pete Wilson and powerful Democrats over the composition of the proposed five-member commission. The governor demanded the authority to appoint all five; legislative leaders sought authority to appoint at least two.

Isenberg has agreed to delete provisions from his bill that give the governor all five commissioner appointments, but all signs point to a renewal of the fight. A Wilson spokesman said the governor still demands the power to appoint all five commissioners.

Lockyer said he will continue to insist that one appointment be made by the Senate Rules Committee. Likewise, Assembly Speaker Willie Brown (D-San Francisco), who would control the other legislative appointment, said he will object to the bill if it bows to Wilson's demand.

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