Licensing Mess Shuts Poker Club : Business: Hundreds of Regency employees are idled and the city of Bell is losing thousands in tax revenue. Renewal of the permit could take months.

Poker tables at the Regency Club card casino have folded because of a licensing tangle that could keep the casino closed for weeks, leaving hundreds of employees out of work and costing the city of Bell tens of thousands of dollars in tax revenue.

Club owner John Chi, who brought the casino out of bankruptcy in 1990, failed to renew its gaming license when it expired at the end of July, according to the state attorney general’s office.

The casino, which closed on July 31, cannot reopen until state officials complete background checks on a group of Orange County investors who are buying the club. That could take up to six months.

Meanwhile, more than 300 card dealers, floor managers, security guards and other employees are out of work and have not been paid in three weeks.

“This is probably one of the worst hardships of my life,” said one security officer. “I have to buy groceries. I have a house note to take care of. I have a 3-year-old and one on the way.”

The city of Bell is also hurting. It gets about one-fifth of its general fund from club revenues and stands to lose about $80,000 every month the club is closed. “We are pulling our hair out,” said City Councilman George Cole. “This is a big, big hit to take.”

Chi has not been seen in six months and his whereabouts are not known. He reportedly has left the country.

Chi has defaulted on the July payment toward the $5.6 million he owes on the club and has failed to pay August rent on the property, according to court records.

“He has basically abandoned the club. He is not expected to return,” said Howard Fuller, director of finance for Regency Management Corp. The corporation’s four-person management team began operating the casino last month while forming an investment group of Orange County businessmen to buy the club.

Fuller said Chi neglected to tell him or his partners that the gaming license would expire July 31, and when they discovered the problem, it was too late. They scrambled last week to reapply for a new gaming registration--a process that can take months.

Although the casino’s restaurant and bar are still operating, the poker parlor cannot reopen until the background checks are completed, according to officials in the gaming registration division at the state Department of Justice.

“We are treating this like a brand new license, and they have to go through all the checks everyone else does,” said George Scarborough, who heads the gaming division. “Under ideal conditions, the soonest the license can be issued is 30 days.” The casino was once a successful poker parlor with Asian games such as pai gow and pan. First called the California Bell Club, it opened in 1979, and at its peak, enabled Bell to rake in more than $2 million in revenue a year.

But in 1984, the situation changed dramatically. Two former city administrators and several club partners were convicted in a racketeering scheme in connection with the club. And in 1987, the club’s managers were accused of skimming more than $1.5 million from the business.

By 1989 there were new owners, but the troubled club was ordered closed by a federal bankruptcy judge in January, 1990. Los Angeles attorney Steven E. Smith was appointed as an independent trustee, with the job of liquidating the club’s assets and paying its creditors.

Chi bought it later that year, but two weeks ago control of the casino reverted to Smith after he went to court because the gaming license was about to expire and Chi had defaulted on his payments. Smith said he is also applying for a gaming license to get the poker parlor operating again, pending its sale. The casino loses between $45,000 and $50,000 each day it remains closed, he said.

Employees are already feeling the financial pinch.

“I just got an eviction notice, and my electricity is turned off,” switchboard operator Lisa Bennett said. She is one of the few employees still working at the club, but is not sure when she will next be paid.

The 27-year-old Long Beach resident said she has permission to borrow petty cash from the register to pay her baby-sitter and to buy gasoline.

Until the casino is reopened and making money, the employees have little hope of being paid, Smith said. There are no funds available for salaries, he said, and the existing assets will go to pay the club’s creditors, including the Internal Revenue Service, which is owed $2 million.

“I can understand why they are upset,” Smith said. “But there is simply no money to pay them.”

About 50 employees picketed the attorney general’s downtown Los Angeles office Wednesday afternoon, urging officials to speed up the licensing process or issue a temporary permit until the background checks have been completed.

“All we want is the money owed to us,” floor manager Steve Lustig said. “If they will just let us reopen, that can happen.”