Gardena's three card clubs--and the city--were dealt winning hands as new games helped boost club profits after several years of declining revenues.
None of the clubs would say how much they earned, but George Anthony, owner of the Eldorado Club, said the three clubs will make about $20 million in combined gross revenues in the year ending June 30, up from $16 million the previous year.
The city will collect about $2.65 million in fees from the three clubs, an increase of about $400,000.
Gardena had expected its take to continue declining, as it has since 1979 when card clubs started opening in other Los Angeles County cities. That year Gardena took in nearly $4 million in fees, about 25% of the city's total revenue.
By fiscal year 1985-86, city fees from the card clubs--based on a sliding scale, increasing as revenues go up--had dropped to nearly $2.2 million and the trend had been expected to continue downward to $2.1 million in the present budget year that ends June 30.
Instead, the city has half a million dollars to put into its reserves. Such dramatic increases are not expected in future years, club owners and city officials say. But City Manager Kenneth Landau said he is pleased that the trend has been reversed. He is estimating a $100,000 increase in fees for the next fiscal year.
"As long as it is not illegal, we will allow the clubs to be competitive" by permitting new games, Landau said.
The new games, which include stud poker, Super 9 and pai-gow, have been questioned as possibly illegal, said Anthony, who is also chairman of the California Card Club Assn., which represents the 390 clubs in the state.
State law specifies 12 games that are illegal, including blackjack and roulette. Violation is a misdemeanor, punishable by a maximum $1,000 fine and six months in county jail.
The industry has taken the position that any game not specifically prohibited is legal, and has come up with creative ways of interpreting the law.
For example, the 1885 state law on card games prohibits something called "stud-horse" poker, but does not define it. For many years, any form of stud poker--a game in which some cards are turned up--was considered illegal. However, a Huntington Park casino challenged the law and introduced two variations of stud poker last year.
A 'Banking' Game
Last month, a Los Angeles County Superior Court judge concluded that the only thing anyone knows about stud-horse poker as it was played when the law was enacted is that it was a so-called "banking" game--one in which bettors play against the house--which is specifically banned in the state law.
Judge Vernon G. Foster ruled that the stud poker games were legal as long as players did not bet against the club and as long as the club did not take a portion of the pot, which is also banned by the law.
(The card clubs make money by charging a fee on a per-hand or seat rental basis. Players bet against each other, with a club employee dealing.)
Despite the court victory, Anthony, who has been in the business since 1968, said none of the clubs will make the kind of money they once did because of the cloud of uncertainty that hangs over the clubs each time a new game is introduced.
"The industry is in a turmoil," he said. "It still is not a stable business as it was previously. If we make the kind of money this year that we made last year, I'll be surprised."
He said another popular game whose legality has been questioned is Super 9, which resembles baccarat. The object is to draw cards that total nine, or as close to nine as possible.
Baccarat is not one of the 12 games banned in the state law, but it not being played in any of the clubs because it is a banking game in Las Vegas, Anthony said.
Council Approved Game
Gardena City Atty. Michael Karger said he believes Super 9 is illegal, but he was not sure the city would prevail in court and the City Council approved it by a 3-2 vote.
Last year, the city removed a ban on the sale of liquor to players at the card tables. The sale of alcoholic beverages had been allowed only at adjacent restaurants, but casinos in other cities had already allowed such sales and Gardena club owners said they needed the change to be competitive.
Club owners expected the move to increase liquor sales, but reported that there has been little increase.
"When people really want to gamble," Anthony said, "they don't want to drink."