Poker has been a dirty word in this town for months.
Once the pot at the end of the rainbow, the California Bell Club poker casino fell on hard times, and its operators were unable to pay the city hundreds of thousands of dollars in back taxes.
As players flocked to newer card palaces in neighboring cities, revenues at the Bell Club plummeted. Losses for the first five months of this year topped $1 million, and at one point only seven of the 70 poker tables were open, said Los Angeles attorney Leslie Garber.
"The club was within a week or two of bankruptcy," said Garber, who represents the casino's new manager, Samuel G. Torosian. "It was drifting toward financial ruin."
But this week there were signs that Torosian and his partner, Los Angeles surgeon Sham Yung, have halted the club's downward slide.
At Monday night's City Council meeting, Torosian handed City Manager Byron Woosley an $81,055 check for Bell's share of the casino's June revenues. It was the third straight month the city has received a casino payment, prompting several council members to talk of a new era in city-casino relations.
"It is a good faith gesture," said Councilman Clarence Knechtel, "that bodes well for the future."
Largest Source of Revenue
However, as the check was delivered, Garber cautioned that the casino--the city's largest source of revenue--still has "substantial financial problems" and he asked the council "to do its share" to keep the club competitive with the area's other poker houses, particularly the Bicycle Club in Bell Gardens and the California Commerce Club in Commerce.
Operators of the Bell Club want a reduction in the city's poker tax and permission to introduce two new games. A third concession--permitting alcohol to be served and consumed throughout the club--was unanimously approved by the council Monday night after Garber delivered an upbeat diagnosis of the casino's fiscal condition.
Garber told council members that the casino has trimmed its monthly losses from $200,000 to $150,000 since Torosian took over as interim manager in late March.
At the same time, the club's restaurant was losing about $71,000 a month. In June, the loss was cut to $12,000, and Torosian, 55, predicted the eatery would turn a profit by the end of July for the first time in a year.
Billed as the world's largest card casino when it opened in August, 1980, poker players were hard pressed this spring to find a game in the club.
Now there are 36 poker tables operating, and Torosian has brought back the game of panguingue, a popular variation of rummy. And the club has expanded its pai gow games (pronounced PIE-gow), a lucrative Chinese betting contest that uses domino-like tiles.
"The place is humming again," said Torosian, who along with Yung has made an offer to buy a controlling interest in the club from its three general partners--John Gasparian, Jack Simonian and the Landmark Holding Group, a financial group made up of small investors.
(Garber said Torosian is a licensed food stamp distributor in Los Angeles, while Yung has practiced medicine in Southern California since moving here in the early 1970s from Hong Kong. Garber said both have received preliminary clearance from the state attorney general's office and the Bell Police Department to operate a poker casino.)
To speed the club's recovery, Garber wants the city codes amended to:
- Allow two new games, pai gow poker and mah-jongg. Pai gow poker is the same as pai gow , only it uses cards instead of tiles. Mah-jongg is another tile game that originated in China. Both games, Garber said, will attract new players, boosting not only the club's revenues but also enriching the city's coffers.
- Reduce the city's poker tax. Currently, the city collects a percentage of the club's monthly gross revenues based on a sliding scale similar to other cities. It ranges from 7% for $200,000 or less to 13% for $750,000 or more.
Flat Fee Sought
Garber is seeking a flat fee of 8%. The $81,055 payment was about 12% of the club's June revenues, the attorney said.
Councilmen Knechtel and Ray Johnson said they might support lowering poker fees as a short-term remedy to cure the club's money woes.
"We'll give you a life preserver to get you to shore," Knechtel said. "But once you get to shore we're going to take the preserver away. We want to support the club, but not carry it."
This spring, relations between casino operators and the city hit a new low. Between December, 1984, and March of this year, the Bell Club failed to deliver the city's share of revenues from table rentals, prompting the council to file a suit in March to recover more than $226,000 in poker fees. The two sides are trying to negotiate a settlement.
Since it first opened nearly five years ago, the casino has generated $8 million for the city, enough money to boost employee salaries, pay for residents' trash pickup and expand the police force and headquarters.
But criminal indictments of the club's original operators and increased competition of newer, splashier casinos crippled club operations.
"It was a management disaster," said Johnson, referring to the casino's operations in the past year. Garber described it as a "headless organization that was going nowhere fast."
Various officials contend that the club never rebounded from its legal troubles.
Indictments Handed Out
Seven people, including former Bell City Administrator John Pitts and Mayor Pete Werrlein Jr., either pleaded guilty or were convicted on felony charges of mail fraud, conducting an illegal gambling business and racketeering in connection with the casino.
Two of the current general partners also were allegedly involved in the scheme. Simonian is awaiting trial on 11 counts of mail fraud, racketeering and conducting an illegal gambling business. Gasparian received immunity from prosecution in exchange for testimony against the others.
Last year, city Finance Director Steven Klotzsche said that he expected the city would collect about $1.8 million in poker and business operating fees from the club, but it wound up with only $825,000, a shortfall that forced officials to dig deep into reserves.
The city is currently crafting the fiscal 1985-86 budget, and Woosley is hedging his bets on poker revenues. "We're going to play it conservative and estimate about $800,000 from the club next year," he said. "I hope it's a lot more. But we've been hurt in the past, so we're playing it safe this time."
As a result, Woosley said the city will probably postpone nearly $1 million in capital improvement projects, including a long-overdue $500,000 street repaving effort.
"It's not really a true savings because eventually it will cost us even more to repair our roads and make other improvements," Woosley said. "But at this point, we don't have much choice."