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Compton Council Selects Operator to Reopen Casino

Gaming: Several issues must be resolved before the facility, closed last month after auditors found it had insufficient cash, can resume business.

November 20, 1997|JEFF LEEDS | TIMES STAFF WRITER

Desperate to reopen Compton's shuttered card casino and put its 1,000 employees back to work before the holidays, the City Council has selected a new operator for its poker parlor.

Leo Y. Chu, a former apparel manufacturer from Beverly Hills who has been looking for a casino to run since 1995, said he planned to have Compton's Crystal Park Hotel and Casino reopened in mid-December.

The City Council approved Chu's application for a city gaming license on a 3-2 vote.

"I think it's good for the city," Chu said after the vote. "I'm very pleased."

The decision came at a fractious hearing over the card club, which state authorities shut down Oct. 11 after auditors found that the operator, former trash company executive Rouben Kandilian, did not have enough cash to cover his outstanding chips. Authorities also canceled his state license.

Reopening the casino remains a complicated affair, however. Chu, along with San Francisco 49ers owner Edward J. DeBartolo Jr. and Hollywood Park Inc., had been a part owner of the Crystal Park facility.

Hollywood Park already runs its card club in Inglewood, and because state law allows it to operate only one card club, the three owners leased the Compton gaming operation to a tenant, Kandilian's company.

In order for Chu to fill the role of a tenant, he must sell his share of the Compton property and keep Hollywood Park at a distance.

He must also win back the confidence of players and employees.

Chu said he plans to start small, operating only about 50 of the casino's 110 tables, but would hire as many of the laid-off employees as possible.

Chu's deal with the city provides that he will pay a $1.5-million license fee and at least $1 million over the first six months of operation. The casino has become a crucial source of tax revenue for the city, and Compton officials--already under pressure to raise the wages of police and firefighters--had been preparing to slash salaries to cover the shortfall caused by the casino's temporary closure.

Chu would provide enough revenue to cover all but about $500,000 of the projected $3-million shortfall, city officials said.

Chu is expected to receive the required approval from the state Office of Gaming Registration. But he faces potential legal action from another applicant for a city license, Mikael Aloyan. Such a challenge could delay the opening of the casino.

Aloyan filed a license application Tuesday and said he should have had a chance to make his case before the city decided on Chu.

Mayor Omar Bradley and council member Delores Zurita agreed. Bradley charged that Chu had been "pre-approved" by the Office of Gaming Registration, a claim denied by Donald S. Pressley, who heads that office.

Meanwhile, Kandilian has launched a longshot effort to persuade Atty. Gen. Dan Lungren to reinstate him. In an Oct. 23 letter to Pressley obtained by The Times, Kandilian said he believes that he has a "compulsive gambling habit" and offered to enter a residential treatment program in Orange County in exchange for a renewed casino license. He has not entered the program.

Kandilian was observed gambling at the casino repeatedly after state officials ordered him to stop. And with the casino teetering on the verge of ruin last month, he was seen gambling again. Kandilian lost $90,000 at Crystal Park in the first week of October, state investigators believe.

What's more, he has been unable to fully account for the transfer of more than $660,000 in chips in the casino's books--a discovery that led state authorities to close the casino.

Although a Kandilian spokesman said Tuesday that Kandilian would sell Zakaroff Services, his family's trash company, to raise the money needed to pay his debts and reopen Crystal Park, state officials say he does not deserve a second chance.

In an Oct. 27 letter, Lungren and Pressley said Kandilian's continued control of the casino was "absolutely unacceptable," and added: "It seems to make little sense to place you back in the very situation that resulted in your condition in the first place."

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