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Last Updated 8/23/06

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Council Member Aids Lobbying Effort for Extension of Statewide Card Club Moratorium
End of ban on expansion of urban casinos could mean loss of gaming revenue for Compton, neighboring cities

By Allison Jean Eaton
Bulletin Staff Writer

It’s been just over a decade since the state’s urban casino industry, for myriad reasons, was put on ice, and a local council member is actively advocating for the temporary ban’s extension.

In 1996 a moratorium known as the Gambling Control Act was passed by state lawmakers. This forbids, among other things, the opening of new or the expansion of existing card clubs.

Councilman Isadore Hall, whose district encompasses Compton’s Crystal Park Hotel & Casino, has been working to have the moratorium extended for another five to 10 years, he said.

“The purpose of the moratorium is to allow healthy rights to urban casinos,” Hall told The Bulletin. “To allow the casinos to continue to act as businesses and revenue generators, and to allow the cities to collect money from the casino activities. But if the moratorium is lifted, then you allow for active participation from other casinos.”

In other words, if additional card clubs are built in nearby cities, casinos like Crystal Park might be faced with a run for their money in keeping patronage up amid stepped-up competition.

According to the Gambling Control Act, which established the decade-long freeze, the ban will become inoperative after the first of next year.

Hall in late May flew to Sacramento, along with the mayors of Bell Gardens and Hawaiian Gardens, to lobby legislators at the State Capitol.

“ Basically, I lobbied legislators and spent time informing them of the issues cities with card clubs face in that [the casinos] provide funding for services to communities,” Hall said.

His lobbying efforts, he said, are both on the city’s behalf as well as for the California Cities for Self Reliance Joint Powers Authority (JPA), a coalition of cities in the greater Los Angeles area aimed at protecting their constituents via maintaining the revenue each city collects from the gaming establishment(s) located within each city’s boundaries.

Member cities include Bell Gardens, Commerce, Gardena and Hawaiian Gardens. The gaming revenue each of these cities, including Compton, collects from their card clubs is used, said Hall, to augment an array of social services including public safety, senior services, educational outreach programs and scholarship funds, to name a few.

But the slated lifting of the moratorium does not pose as great a threat to the city of Compton as some of JPA’s other member cities. According to the minutes from the June 20 Compton Gaming Commission meeting, the total revenue the city earned from Crystal Park for fiscal year 2005-06 was approximately $$597,000.

Hawaiian Gardens, on the other hand, relies heavily on its card club’s revenue. The less than 1-square-mile city of about 15,000 raked in $9.3 million from Hawaiian Gardens Casino in 2004-05, $10.3 million in 2005-06 and expects to take home a total of $10.5 million this fiscal year. With that city’s expected revenue for this year set at $14.2 million, its gaming revenue comprises about 74 percent of its total income.

Gardena, which boasts two card clubs — the Normandie and Hustler casinos — also relies heavily on card club revenue, but not to the degree at which does Hawaiian Gardens. Card club revenue is the second largest income source for the city of Gardena. Of the approximately $41.5 million in revenue it expects during 2006-07, card club monies are approximately $7.7 million, or almost 19 percent of its total expected fiscal year gains.

All in all, a loss in gaming revenue due to increased competition could make or break these cities’ ability to provide services to their constituents. Luckily, the situation isn’t as severe in Compton, but sustaining the amount of gaming revenue the city earns is still a priority, Hall said.

The state currently boasts 90 licensed card rooms in addition to the multitudes of Native American gaming casinos scattered throughout the Golden State, to which this particular moratorium does not apply.

But casinos operated on Native American lands are under a moratorium of their own. The California Indian Gambling Casino Moratorium and Planning Act of 2005 placed a five-year freeze on the establishment or expansion of these casinos, where slot machines are legal, unless authorized by a statewide election.

State legislators will soon consider a bill, SB 1198, that would give local governments more control over wagering limits, which were also frozen by the 1996 card room expansion moratorium. It passed the State Senate on a 22-9 vote, and is now before the Assembly, which reconvened Aug. 7.