Two formerly outlawed poker games have been instituted at the beleaguered California Bell Club casino, a step that could increase revenue by 50%, the club's manager said.
"These are games people used to fly to Vegas for," manager Samuel Torosian said, predicting that a court ruling permitting the new games will mean a $400,000-a-month rise in the club's revenue.
Despite the good news, the club is racked by dissension among its owners and faces a takeover attempt by investors in Korea and a lawsuit charging it with racketeering violations.
The new games, seven-card stud and hold 'em, are versions of stud poker, which is characterized by dealing one or more cards face up. Stud poker has been considered illegal in gambling clubs in California for a century.
Games Win Court Test
The games are permitted under the ruling of Los Angeles County Superior Court Judge Vernon G. Foster, as long as bettors are not wagering against the casinos and the house does not take a cut of the bets or pot. Games where casinos participate (banking games) or take a share of the pot (percentage games) are against the law in California.
Cities may permit commercial poker games that do not violate these two conditions, although an 1885 law specifically outlaws a game called "stud-horse poker." On that basis, seven-card stud and hold 'em have been considered illegal.
Foster ruled May 5 that no one knows exactly what was meant in 1885 by stud-horse poker, but that it was apparently a banking game. He said modern games that do not fit that description do not violate the law.
The lawsuit that resulted in the ruling was brought jointly by the California Bell Club and Huntington Park Club Corp., both of which asked to be protected from prosecution if the games were offered to the public.
In the wake of Foster's ruling, clubs in four other cities in Los Angeles County have begun offering both games. Within days of each other in late May, clubs in Commerce, Bell Gardens, Huntington Park and Gardena received approval from city officials to start the new games. Bell Gardens got its approval June 1.
"The clubs are very competitive, and if one gets a new game, they all want it," said Peter Wallin, city attorney for Bell Gardens, where the Bicycle Club is located. "The clubs believe it is critical to get a jump on the competition because if the other guy offers the game first, it can cost you players. And it can take weeks to win those players back."
Two Challenges Loom
With one court battle settled in their favor, Bell Club managers still face challenges on two fronts.
A group of investors in Korea known as LCI Corp. is attempting to take over the club. The group claims to have lined up the purchase of 51% of the points (1% shares) in the club, according to Frank Nemecek, a spokesman for LCI attorney Arnold S. Malter.
Three weeks ago, Malter obtained a California gaming license. Malter is out of the country and could not be reached for comment, but Nemecek confirmed that Malter intends to manage the club if LCI's takeover attempt succeeds.
The City of Bell holds more than 12 points in the club as a trustee for the U.S. government, which confiscated the shares of partners convicted of racketeering charges in 1985. Bell has accepted LCI's bid to purchase its shares at $70,000 per point. One of the conditions of LCI's bid to the club's partners is that LCI obtain a majority of the points.
Sources said LCI has obtained an agreement from one of the limited partners in the club, Landmark Holding Group Inc., to sell its shares to LCI, which would put the Korean group over the top.
What constitutes a majority, however, is an issue at the heart of two pending lawsuits. In the first, the California Bell Club Management Corp., Torosian's group of general partners who currently run the club, has obtained a temporary restraining order to keep Landmark from taking over management of the club.
Landmark attempted to take over the club in March after claiming that the holders of 53% of the club's points had voted to oust Torosian's group and replace it with Landmark owner Ebrahim Victory.
Ouster Takes 80% Vote
Torosian's group, however, says that the club's partnership agreement requires an 80% majority to overthrow the managers.
There are two partnership agreements extant, and which one the court decides is valid will determine who has control. Torosian's effort to get a permanent injunction against Landmark is on hold while an appeal by Landmark to replace the judge is being considered.
In another lawsuit in federal court, Landmark is charging the present club managers with a number of violations of RICO (Racketeer-Influenced and Corrupt Organizations Act), the federal racketeering statute, including skimming money and "looting" the club of more than $1.5 million since 1985. The management group denies the charges.
Nemecek said LCI expects the partnership agreement issue to be resolved by the end of June.
Times staff writer Steven R. Churm contributed to this story.