CYPRESS : Card Club Ordinance Gets Initial Approval

The City Council this week gave initial approval to a proposed card club ordinance regulating everything from workers to owners at the proposed Derby Club.

While the council spent two meetings and more than eight hours debating the ordinance, the 32-page document will not take effect unless voters approve opening a card club in the city.

Under its terms, city employees and officials must wait two years after leaving city employment before working at the club. It also forbids corporations from becoming shareholders and requires all employees to undergo strict background checks.

Residents will vote June 8 on Measure A, which authorizes a $30-million card club at the Los Alamitos Race Course. Course owner Lloyd Arnold and two business partners are backing the Derby Club, which if approved could be the first card club in Orange County. The ordinance may not be the council’s final word on regulating such clubs, because the board has agreed to work out a development agreement with the operators that could alter some of the rules passed Monday night.

One of the key sticking points is the fee the club will be required to pay the city. As written, the ordinance requires the operators to pay $100,000 annually in taxes, plus a share of the monthly gambling take, ranging from 10% to 20%.

Chris Bardis, one of the three businessmen backing the club, called the city’s cut too high, saying it should be in line with fees “charged at the Bicycle Club or the Commerce Club.”

The Los Angeles County clubs pay up to 13% of monthly gross receipts in taxes, said Finance Director Richard Storey.

Councilman Richard Partin agreed with Bardis and suggested that the tax could be lowered.

Bardis also objected to a clause forbidding card club businesses within a 50-mile radius of Cypress from owning or operating the Derby Club, indicating an ownership deal could be struck with Hollywood Park, which recently gained voter approval to build a card club at the Inglewood track.

The council said it could deal with some of these questions in the development agreement, which is being negotiated with card club backers. The council is expected to see a version of that on Monday, at the same time it is expected to give final approval to the card club ordinance.