Anti-Gambling Law May Lower the Ante of Catalina Revenues

Catalina Island will lose millions of dollars in tourist revenue if a new high-seas anti-gambling law scares away cruise ships that drop anchor in Avalon Harbor each week, city officials say.

In addition, Avalon faces the loss of $100,000 in annual wharfage fees paid to the city by the cruise lines. The money is used to help finance the community’s tiny hospital and health care services, according to City Manager Chuck Prince.

Although shipboard gambling in state waters has been outlawed for years, law enforcement officials haven’t bothered the two cruise ships that routinely stop in Avalon during cruises from Los Angeles to Ensenada, Mexico. Both ships operate casinos as part of their entertainment package.

However, a new state law that goes into effect in January specifically outlaws gambling on any ship sailing from one California port to another. And that includes the cruise liners that drop anchor in Avalon Harbor every Tuesday and Saturday, law enforcement officials say.

“Cruise ships that operate gambling casinos on the way out to Catalina from Los Angeles are breaking the law,” said David Puglia, a spokesman for California Attorney General Dan Lungren. Rather than give up their casino gambling profits, cruise line officials say they are considering bypassing Avalon entirely.

“Our alternatives are pretty straightforward: Don’t gamble or don’t go,” said Rick Steck, spokesman for Royal Caribbean Cruise Lines, operators of the 1,500-passenger Viking Serenade. “Cutting out the Avalon stop is an option, but no decision has been made yet.”

The Florida-based company isn’t running “floating casinos,” Steck said. “Gambling is just another activity on board.”

He noted the Viking Serenade also offers movies, “feather and flesh shows,” discos, Big Band music, specialty acts and midnight buffets.

On one three-day cruise, the ship leaves San Pedro on Friday evening, spends the night at sea and steams into Avalon Harbor early Saturday morning. Passengers spend the day there, then sail that night to Ensenada, spend Sunday there and come home, arriving early Monday morning.

“Gambling is a moneymaker for us, no question, but it’s not the reason you take a cruise,” Steck said. “You go to get away for a few days.”

Norwegian Cruise Lines, owners of the Southward, an 850-passenger cruise ship operating the same route, had no comment.

By Catalina Chamber of Commerce estimates, the average cruise ship passenger coming into Avalon spends $20 to $25 a day in town. In the summer, cruise ships account for 15% of the tourist trade; in winter that jumps to 25%, said Wayne Griffin, the chamber’s executive director.

“We figure the passengers spend about $2.5 million a year in our restaurants and shops,” he said. Fearing the loss of these funds, the chamber is protesting the attorney general’s interpretation of the new law, contending it was never meant for cruise ships.

“No one even thought of cruise ships before. They’ve been stopping here since 1988, and there’s been no interest from the state until now,” Griffin said.

The chamber and the City Council are leading an effort to have cruise ships exempted from the legislation, and have enlisted the aid of the state Office of Tourism.

“We are opposed to gambling ships, but we feel that legitimate cruise ships that have incidental gambling on board should be excepted,” said John Poimiroo, state tourism director. Cruise ships that are at sea three days or more and stop for six hours or more in any port should be exempt from the law, he said.

The controversy began when Congress passed a law last summer making it legal to gamble on U.S.-flagged ships in international waters. The law does, however, allow states to ban gambling in local waters.

Since the 1920s, floating casinos have had a colorful, if controversial, history off Southern California. As many as half a dozen were anchored outside the three-mile limit in the 1930s, frequented by thousands of gamblers who took water taxis from the piers at Long Beach, Redondo Beach and Santa Monica.

California laws not only ban shipboard gambling in state waters, but also outlaw gambling on ships that put to sea on “voyages to nowhere,” sailing out into international waters and coming back to a California port.

While the law has been used to put a stop to the notorious floating casinos and ships making such voyages, it hasn’t been applied to cruise ships that regularly sail out of San Pedro, San Diego and San Francisco, stopping in other California ports along the way.

When Congress passed the new law, allowing U.S.-flagged ships to have casinos, Lungren and other law enforcement officials pushed for even stronger, more explicit state laws.

“The expansion of casino gambling off our coast is a lousy bet, with terrible odds for the people of California,” Lungren said at the time. “We have enough problems . . . without opening the door to the kind of criminal activity that gambling habitually attracts.”