Cities Try to Protect Stake in Disputed Asian Card Games

Fearing deep cuts in city operating funds, officials of five Los Angeles County cities are joining forces to try to ensure that three controversial Asian betting games will be allowed to continue at area card clubs.

After a series of casino raids by the Los Angeles County Sheriff’s Department last month, officials in Bell, Bell Gardens, Huntington Park, Commerce and Gardena have formed a joint city managers’ committee to lobby for changes in the state’s 98-year-old gambling law. The group of city administrators began meeting last week.

County officials contend that the casinos are violating the state law that prohibits games in which gamblers play against a “bank,” usually the casino, rather than against each other. Card club operators, however, contend that their games are legal.

Two of the cities have also joined with casino operators in a lawsuit to keep the games open--Sheriff Sherman Block has agreed to allow the games to continue until a Superior Court judge considers the suit Feb. 9--and Commerce officials are considering canceling the city’s law enforcement contract with the Sheriff’s Department as a result of the raids.

“We need to get this settled once and for all,” said Bell Gardens City Manager Claude Booker. “We want to get the cloud out from over the games.”

City officials say they will lose millions of dollars in revenue if Superior Court Judge Kurt J. Lewin determines that the rules of the three games-- pai-gow, Asian poker (also called pai-gow poker) and super pan 9--violate state law. The cities collect a portion--usually ranging from 7% to 13.5%--of the casinos’ gross receipts from gambling tables.

Casino owners predict that business would drop severely if the games are declared illegal. About 50% of casino business is derived from the Asian games.

“It would be devastating,” said Booker, who is leading the joint effort and whose city stands to lose the most. Booker estimated that Bell Gardens would lose up to $6 million a year, about 60% of what it now receives from the Bicycle Club.

The state gambling law, last updated in 1891, states: “Every person who deals, plays or carries on . . . any banking or percentage game . . . is guilty of a misdemeanor.” In percentage games, the house, or casino, collects a percentage of winnings.

City officials, complaining that the state law is too vague, will press for an amendment that would ensure the legality of Asian games and define precisely the terms banking and percentage, Booker said.

No decision, however, has been made on what strategy the group of city officials will take or which lawmaker will sponsor the cities’ effort to revamp the gambling law, Booker said.

The Asian games have been targeted by law enforcement officials because they use a “revolving bank,” in which players take turns operating as the bank, officials said.

Players take turns being the dealer, who is pitted against the rest of the table. That player also becomes “the bank,” paying winners and collecting from losers. That contrasts with other games, such as draw poker, in which all gamblers play against one another for a common pot.

Lawyer David Chodos, who represents the Bicycle Club in Bell Gardens, said the state prohibition of “banking” games was intended to prevent a casino from holding an unfair advantage over players. But that cannot happen when players take turns operating as the bank, he argued.

Major Revenue Source

Played almost exclusively by Asians, pai-gow, Asian poker and super pan 9 have become a major source of revenue for the handful of card clubs because they are played at a faster rate than other poker games allowed at the card clubs, casino operators say. Casinos once collected a percentage of each bet, but, under a recent court order, now charge a flat, per-hand fee from each player.

On Dec. 29, deputies raided the Bicycle Club, the Commerce Club, the Huntington Park Casino, the California Bell Club in Bell, and three poker clubs in Gardena--the Normandie, El Dorado and the Horseshoe.

Deputies arrested six employees at three of the clubs for allegedly violating the section of the gambling law that prohibits “banking” games. Several days later, deputies forced the closure of 70 tables at six of the clubs for the same reason. The Horseshoe had no Asian games running at the time of the raids, officials said.

After the raids, the Bicycle and Commerce clubs and Bell Gardens filed a lawsuit to block the Sheriff’s Department from closing the Asian games. The Commerce City Council met in emergency session Jan. 5 and decided to join the suit.

The Huntington Park Club Corp., which operates the Huntington Park Casino, filed a lawsuit against the county in 1984 after sheriff’s deputies moved to shut down pai-gow games because of the way casinos were collecting their fees from players. The casinos collected a percentage of the amount bet in Asian games, rather than a per-hand or table rental fee.

Law Ruled Vague

A trial court judge eventually ruled that state law prohibiting percentage games was unconstitutionally vague.

But last November that decision was overturned by a three-judge panel of the 2nd District Court of Appeal, which found that state law prohibiting percentage games is clear and constitutional. The clubs now charge the per-hand fee in compliance with the appellate court ruling, casino spokesmen said.

The appellate court decision also discusses banking in relation to the Asian games, but the court did not clearly decide the issue of a rotating bank, county officials contend.

Previous court decisions have defined a banking game as one in which the house or bank participates in the game and pays winners and collects from losers.

Cmdr. Raymond Morris said the Sheriff’s Department awaited the appellate court decision and, when the court did not rule definitively on the banking issue, decided to move against the clubs.

Although the appellate decision states: “It is clear that under the present facts pai-gow is not a banking game. . . . “ An accompanying footnote reads: “Under the unique facts of this case, no issue has been raised as to whether a ‘banking game’ would result if a person other than the ‘house’ were to maintain and operate the ‘bank.’ We do not reach and do not decide that question.”

George Hardie, owner of the Bicycle Club, said that because the players take turns holding the “revolving bank,” the Asian games are apparently legal. “It’s not a banking game,” Hardie said. “The appeal court said it was legal.”

Calling the state law too vague, he has joined city officials in urging that the law be amended to include a definition of the word banking that would allow players to act as the bank.

But Deputy County Counsel Kevin Brazile, who is representing the county in the case, disputes the view of the Asian-game advocates.

“When you have a player who’s doing the same thing that the house would do (in Las Vegas), our position is it’s a banking game,” Brazile said.

Bell Gardens is not the only city faced with a large financial loss if the games are ruled illegal.

Face Revenue Loss

Commerce expects to receive $5.3 million from the Commerce Club, or 23.1% of what the city plans to spend this fiscal year on general services, including police and fire protection, said John Mitsuuchi, director of finance. Officials fear about half of that could be lost if the Asian games are prohibited.

The city has a $5.9-million reserve, but the loss of income from the card club could force the council to make some budget cuts, City Administrator Louis Shepard said.

“We’d have to cut our budget and that could not be done without some very serious changes in service,” Shepard said.

In Huntington Park, the City Council has directed its attorney to file a friend-of-the-court brief in support of the card clubs to protect its financial interests, City Administrator Donald L. Jeffers said.

The city expects to receive about $480,000 in revenue from the Huntington Park Casino this fiscal year. Unlike Commerce, Huntington Park does not have a comfortable reserve, and is counting on the card club revenue to keep its $9.9-million general fund in balance, Jeffers said. To balance the budget, the city cut general fund expenditures by about $500,000 from last year, Jeffers said.

“Anything that we lose is critical to our budget,” Jeffers said. “We’d have to generate additional revenue sources or make some cutbacks to offset that loss.”

Huntington Park Mayor Jack Parks also lashed out against the county.

“I think the sheriff is (unjustifiably) challenging the law,” Parks said. “We get a fair revenue out of those games. We want to follow the law. We’re not doing anything against the law.”

But county officials said they cannot be concerned with the effect their actions may have on city coffers.

“We’re not trying to stop them from making money,” attorney Brazile said. “It’s real simple. We’re trying to enforce the law.”