3 State Ports Protest Ban on Gambling Aboard Ships : Cruises: San Diego, L.A. and San Francisco port officials fear loss of business when law goes into effect Jan. 1.

Port officials from San Diego, Los Angeles and San Francisco are fighting a state law going into effect Jan. 1 that will ban gambling on cruise ships sailing between California ports, saying the bill would deliver a $100 million blow to California tourism.

The law passed last summer was sponsored by the state attorney general to prevent what his office described as “gambling ships” and “cruises to nowhere.” The law will ban gambling on ships traveling between California ports of call but not those leaving a California port bound for another state or country.

In an eleventh-hour bid to stave off what they fear may become an exodus of cruise lines from the California coast, port officials in San Diego, Los Angeles and San Francisco are lobbying state legislators to introduce emergency legislation after the New Year. Such a bill would amend the law to allow gambling on multi-day cruise liners as long as gambling is not the primary activity or purpose of the trip.

The bill has already prompted Miami-based Royal Caribbean Cruises Ltd. to drop San Diego on its four-night cruises and Catalina from its three-night cruises. Royal Caribbean’s 1,500-passenger Viking Serenade makes the trips weekly originating out of Los Angeles bound for Ensenada.

The ports were dropped because the cruise line says that passengers boarding in Los Angeles will have more time to gamble en route to or from Ensenada if stops in San Diego and Catalina are omitted.

Norwegian Cruise Lines, which operates the 750-passenger Southward, may also abandon San Diego, and possibly all California ports, from its cruises. Norwegian runs three- and four-day trips out of Los Angeles to Ensenada with stops in Catalina and San Diego.

Three shipping lines put their plans on hold this summer because of the state bill. Venture Cruise Lines was preparing to operate the first of three gambling ships in June--sailing out of Marina del Rey to Catalina and other Southern California ports.

Champagne Cruises ordered 16 slot machines for a small ship offering dinner cruises out of Newport Beach. And Continental Coast Line hoped to begin construction of two large gaming ships for daily passenger service between Los Angeles and San Francisco.

Introduced by state assemblyman Mickey Conroy (R-Orange), the anti-gambling bill was a response to a new federal law in March that allows unregulated casino-style gambling on vessels departing from and returning to states where existing laws prohibit such gambling. Lungren has said he opposes any law which would undermine the state’s longstanding prohibition on floating casinos.

Officials from Royal Caribbean and Norwegian Cruise Line have told port officials they may eventually drop calls in California altogether because of the anti-gambling law, according to Karen Tozer, manager of general cargo and cruise services for the Port of Los Angeles.

“The consensus in the cruise ship industry right now is, ‘Why bother with California,’said Rita Vandergaw, cruise ship liaison officer for the San Diego Unified Port District.

Tozer and cruise services managers from San Diego and San Francisco estimate that the state tourism industry could suffer by as much as $100 million a year. That’s if both Royal Caribbean and Norwegian Cruise Lines pull out of California, and other cruise lines, which call at one or two California ports en route to Alaska or the Caribbean, follow suit.

San Diego stands to lose about $5 million in tourism-related business generated by the weekly Royal Caribbean calls, said Vandergaw of the San Diego port. If Norwegian Cruise Lines also abandons San Diego, the loss there would be closer to $10 million, she said.

“We certainly see an increase in business--about 600 people--every time the Royal Caribbean calls,” says Volker Schmitz, president of the Horton Plaza Merchants Assn. and general manager of the mall’s California Cafe Restaurant.

“California is not doing so well right now, and it seems that, instead of encouraging business, as the politicians will tell you they’re doing, we seem to be legislating ourselves out of business.”

In Los Angeles, Tozer said, pullouts by both Royal Caribbean and Norwegian could amount to a loss of $60 million or more for tourism-related business in the greater Los Angeles Area. She said that the Port of Los Angeles collects about $10 million in dockage and provision charges for the two ships, and that longshoremen labor amounts to another $2.5 million.

Another fear among port operators is that so-called “repositioning ships”--cruise lines moving from the Caribbean to Alaska or vice versa in the winter--will also drop California because they too will not be allowed to offer gambling if they want to continue their practice of calling two California ports--San Diego, Los Angeles and San Francisco are the choices--while en route to Alaska. As many as 25 cruise lines a year call at one or more California ports while passing by in either the winter or summer.

Lungren is worried that gambling on cruises off California would invite criminal activity such as extortion, loan sharking, money laundering, prostitution, bribery and corruption.

The federal law delegates to the states the authority to prohibit offshore gambling. But the federal statutes also specify that, lacking state legislation, ships are allowed to conduct gambling on cruises between two points in a state or when the ship leaves from and returns to the same port.

Established cruise ship companies that offer gambling on multi-day trips assert that their vessels will not become “gambling ships” because gambling is just one more feature along with meals and entertainment to attract customers. They point out that foreign vessels operating between California and other states and countries are offering gambling to their passengers.

One company, San Diego-based Starlite Cruises, legally operates daily cruises that offer gambling between San Diego and Ensenada.

“People make decisions as to whether to go on these cruises based on whether they offer such things as on-board casinos,” says Marty Cassell, owner of a Cruise Holidays franchise in Encinitas. “And I wonder how well understood the economic impact of this (anti-gambling) is among businesses here. I think this is yet another example of the tourism industry taking an economic hit because of regulatory excess.”