The City Council postponed action indefinitely Monday on a request by partners of the California Bell Club for permission to play a new game at the casino that they believe would raise sagging revenues.
The club is losing about $4,000 a day and may close unless a form of the popular Asian game pai gow is allowed, the partners said. They asked for approval of the game with side betting.
Compared to Bookmaking
Council members said, however, they were wary of approving a game that is illegal in some of its many versions and instructed the city attorney to consult the state attorney general's office on the matter. Bell-Cudahy Police Chief Frank Fording spoke against the proposal at the meeting, comparing side betting to bookmaking.
Some council members said they were cautious about granting the owners' request because of recent scandals at the club.
"Confidence in our local city government has been shaken," Councilman Ray Johnson said in an interview. "We want to be like Caesar's wife--above suspicion. We want everything to be absolutely legal and aboveboard."
A yearlong federal investigation resulted in the conviction of two former city officials and several club partners in a racketeering scheme at the club.
"The California Bell Club has been a great thing and a source of misery, too," Councilman George Simmons said at the meeting. "At one time I felt close to it, but no longer . . . . I'm worried sick about this thing (pai gow). I wish it had never come up."
Simmons addressed his next words to a group of club partners and their lawyers seated in the council chambers.
"It's not this council's fault you guys are going down the tubes," he said.
Councilman George Cole also addressed the club partners. "I don't like this situation where we're being told, 'You got to do this, or else,' " he said. "My concerns are maintaining the integrity of the city here."
Cole also described pai gow as a legally "questionable game" and said that the council should not act "in the absence of state guidelines" on the game's many versions.
In traditional pai gow, one player, using tiles like dominoes, bets against seven others. This practice, in which one player bets against more than one other player, is called banking and is illegal under state law.
A popular aspect of the game is side betting, in which additional players stand behind those seated and bet on their game. The legality of side betting is not clear, James Watson, program manager of the state Gaming Commission, said in an interview.
However it is played, Watson said, pai gow "is very difficult to monitor" because any minor variation in the rules changes the game completely. Language presents an added problem for law-enforcement monitors because many players speak Chinese.
Pai gow, which draws a large Asian clientele, was instituted by Gardena and Huntington Park clubs last fall.
Gardena stopped the games entirely in December after the Los Angeles County Sheriff's Department advised the city that pai gow was illegal because it was being played in a banking form, City Manager Martin Reagan said.
Huntington Park also stopped the banking version of pai gow in December after the district attorney's office told the city it was illegal, Police Chief Geano Contessotto said.
The Huntington Park Club Corp., which holds the license to operate the Huntington Park Casino, filed suit Dec. 20 against the City of Huntington Park and Los Angeles County, claiming it is legal to play the traditional Asian version of pai gow, Huntington Park City Atty. Elwayne Smith said. A ruling on a preliminary injunction in the case is expected Wednesday in Los Angeles Superior Court, Smith said.
A legal American version of pai gow, in which players may bet only against one other player, is now played at the Huntington Park Casino, Contessotto said. Side betting is also allowed, he said.
Side betting "is kind of a gray area in law," Contessotto said. "There are some differing opinions as to who's right and who's wrong."
Because a side bettor "wins and loses the same as the player, we consider him to be a player," he said.
At Monday's Bell council meeting, Bell-Cudahy Police Chief Fording told the council he believed that side betting is equivalent to bookmaking, in which non-participants place bets on a game of skill, and is therefore prohibited by law. It would be "nearly impossible for the Police Department to monitor" pai gow with side betting, he said.
Fording also told the council he had "serious reservations about (pai gow) in its entirety." Confidential law enforcement sources have indicated that "there is a very real probability of organized crime moving into the game," he said.
Last year, the Bell club was the target of federal investigations of racketeering involving two former city officials and four general partners. Former City Councilman Pete Werrlein, Jr., former City Administrator John Pitts and general partner Kevin Kirwan in September pleaded guilty to participating in a scheme in which the city officials used their influence to set up the poker club in return for a secret 51% ownership.
In addition to Kirwan and Werrlein, who eventually became a general partner and club manager, two general partners in December have been found guilty for their role in the scheme.
General partner John Gasparian, who received immunity from federal prosecution in the case in return for cooperating with federal investigators, and general partner Jack Simonian, who awaits trial for his alleged role in the case, initiated the request for pai gow in Bell, City Manager Byron Woosley said.
At the meeting Monday, Hal Mintz, a lawyer for Simonian, lobbied for approval of pai gow with side betting, arguing that without side betting, the game would not attract players.
With side betting, the game could earn more than $10,000 a day for the club, Mintz said, more than covering the club's current $4,000-per-day revenue loss.
California Bell Club partners attributed the decline in revenues to competition from newer casinos. Revenues at the club, which opened in August, 1980, dropped by 18% when the California Commerce Club opened in 1983, and again by 18%, when the Bicycle Club in Bell Gardens opened in November, 1984, said Clint Hubbard, an attorney for club partner Gasparian.
The club, one of the state's largest casinos and the city's largest source of revenue, paid about $1.6 million to the city in 1984, Woosley said.
Revenues paid to the city (13% of the club's gross revenues) reached $2 million in 1982 and 1983 but dropped to $1.6 million in 1984, according to city records. Total club revenues in December were about $591,000--only 40% of the club's peak monthly revenue of $1,494,000 in July, 1983. The club's gross monthly revenue dropped to just under $1 million in October for the first time since the club opened and has continued to decline.
Club partners also inherited some $350,000 in bad checks and loans when former club manager Werrlein resigned in September, attorney Hubbard said. To reduce expenses, he said, the new management recently has laid off 80 club employees, cutting the staff from 500 to 420.