Politics Color Showdown on Gaming Panel : Legislature: A re-vote on the bill to create a gambling commission will test lawmakers’ loyalty to Willie Brown, who opposes state licensing as unnecessary.

Concerned about the potential of organized crime infiltrating California’s card rooms, the Legislature is debating whether to establish a state gambling commission, which would license and regulate the popular and lucrative clubs.

Sponsored by Republican Atty. Gen. Dan Lungren and Assemblyman Phillip Isenberg (D-Sacramento), chairman of the Judiciary Committee, the bill creating the commission was approved by a 49-10 vote in the Assembly late last month.

But it was prevented from moving to the state Senate by opponents--led by Assembly Speaker Willie Brown (D-San Francisco)--who used a parliamentary maneuver to stall the measure.

Brown says the legislation (AB 2803) is “untimely and unnecessary” and would make Lungren “the gambling czar of California.”

As proposed, the attorney general’s office would conduct thorough criminal background checks on card club license applicants and make license recommendations to the seven-member commission, whose members would be appointed by the governor, the Assembly Speaker and the Senate Rules Committee. Currently, both state and local entities make background checks, but the bill’s supporters say such checks are limited in scope and not coordinated with other law enforcement agencies.

“The need for the commission is self-evident,” Lungren said in an interview. “You have $7.5 billion estimated to be wagered across card room tables yearly in California. When you have a vacuum of appropriate oversight, you create a tremendous opportunity for organized crime to move in with the enormous amounts of cash involved. This is preventive medicine.”

Lungren discounted Brown’s criticism, saying: “Far from me trying to become the gambling czar of California, I’m trying to set up a commission to do that job. Willie knows that. So Willie is just plain wrong.”

An undercurrent in the debate over the gambling commission is the political animosity between Lungren and Brown, who have been at odds at least since 1988.

That was when Brown voted against Lungren’s confirmation as state treasurer. Lungren, then a former Republican congressman from Long Beach, was appointed to the post by then-Republican Gov. George Deukmejian as a replacement for the late Jesse M. Unruh.

Although he was confirmed by a 43-32 Assembly vote, Lungren was rejected by the Senate. The state Supreme Court ultimately ruled that he could not be treasurer with the approval of only one house, which temporarily sidetracked Lungren’s political career.

The gambling commission bill, supported by Los Angeles County Sheriff Sherman Block and various law enforcement groups, is one of the most heavily lobbied bills of the 1994 session.

Big and small card clubs, Las Vegas gambling interests, horse racing tracks, labor unions and Indian tribes who run bingo and casino-style games, all with a substantial interest in legalized gambling, have hired a raft of well-connected and expensive lobbyists to work the bill.

For example, former Assembly Republican floor leader Bob Naylor of Redwood City represents Las Vegas gambling interests; Rod Blonien, former top aide to Deukmejian, represents the California Commerce Casino in the city of Commerce; and Sacramento City Councilman Jose Pane represents several Indian tribes.

Former Democratic Assemblyman Richard Floyd of Carson is working for the small card clubs; Terrance Flanigan, another former Deukmejian aide, represents Southern California card club owner George Hardie, who operates the Bicycle Club in Bell Gardens; former Republican Assemblywoman Bev Hansen of Santa Rosa speaks for Hollywood Park, and former Republican state Sen. Dennis Carpenter is representing several card clubs.

In general, most of the large card clubs favor the bill, while most of the smaller ones are against it.

There are about 265 card clubs in California, with the Bicycle Club reporting a record-high $97 million in gross revenues in 1992, the last year for which figures are available.

The potential to reap enormous profits has prompted other groups to propose new, large card rooms, according to an attorney general’s report earlier this year.

As of last February, seven large card clubs were under various stages of development, while 27 more were being proposed in various regions of the state. A new card room at Hollywood Park opened July 1 with 150 tables.

During the Assembly debate, Isenberg, a former Brown aide, warned his colleagues it would be wise to move as soon as possible to set up the watchdog gambling commission before a scandal occurs.

Isenberg said the state of Nevada spent 30 years working to wipe out the infiltration of organized crime into its casinos.

“I don’t like gambling,” Isenberg said, “but if it’s going to be here, it ought to be honest, even and aboveboard. We should make sure gambling is at least free from the criminal element.”

Brown, though, says the issue hasn’t been studied enough. He wants the Assembly to wait for Assemblyman Curtis Tucker Jr. (D-Inglewood), chairman of the Governmental Organization Committee and considered to be a gambling legislation expert, to look into the issue and come up with recommendations. Ironically, Tucker, who said Isenberg had a good bill, voted for it.

Opponents of the measure then served notice they would seek reconsideration of the vote, which has blocked the bill from moving to the Senate.

Both the Assembly and Senate are scheduled to return here Aug. 8 after a monthlong summer vacation recess, and the gambling issue is expected to come up again after that.

A legislative summation of Isenberg’s measure says its intent is “to provide uniform, minimum standards of regulation . . . (and) to insure that gambling is free from criminal elements and is conducted honestly and competitively.”

The gambling commission would have three members appointed by the governor, two by the Assembly Speaker and two by the Senate Rules Committee. Its main responsibility would be to issue card club licenses, currently left mainly to local government. The commission also would be empowered to revoke licenses.

Any applicant found to have a background in organized crime or a felony conviction involving dishonesty or moral turpitude within 10 years would be prohibited from obtaining a license. Cities and counties, which currently issue licenses and have operating jurisdiction over card clubs, would continue to control locations, hours of operation, number of tables, wagering limits and other requirements.

Although the bill applies only to card room licensing, the measure could be expanded to cover other casino-type gambling.

Floyd, the former Democratic Assemblyman who represents the small card clubs, charges that Lungren is using the theme of preventing organized crime in the card room industry as an issue he can use in running for governor in 1998.

“He’s running for governor on it right now,” Floyd said. “He’ll get huge campaign contributions from Las Vegas gambling interests, and he’ll let them come here and run the small clubs out of business.”

Responded Lungren: “Being criticized by the former assemblyman on the question of ethics is like being accused of giving a mad dog rabies when he bites you. That’s ridiculous.”

Approval of the gambling commission bill by a 49-10 bipartisan vote June 29 was unusual because Brown rarely loses on bills he doesn’t like. Adding spice to the political equation is that Isenberg is usually a member of Brown’s inner circle on politically sensitive issues.

Twenty-one Democrats defied the Speaker and voted yes. So did 28 Republicans. Only seven Democrats, including Brown, voted no.

It’s now up to Brown to find nine yes votes and persuade them to switch. If he can, Isenberg’s bill will fail.