No Regulation: Too Big a Gamble

For too long now the California Legislature has sidestepped opportunities to regulate local gaming activities. But leaving well enough alone won’t do anymore, not in an issue that involves an easy-money industry that often is a powerful magnet for crime.

Legal gambling is a huge industry in California. In 1993, $12.7 billion was wagered, putting the state in third place behind Nevada and New Jersey, which have casino gambling. Of that amount, locally licensed card rooms generated as much as $8 billion.

Thus for governments, too, there’s the lure of the big payoff, namely tax revenues and jobs. However, local governments often find themselves in way over their heads, facing problems such as money laundering, tax evasion, loan-sharking and extortion.

If the state insists on allowing municipalities to permit card clubs, then Sacramento must do its part to help keep the operations clean. The best remedy lies in tighter state oversight, and there is no shortage of good ideas on how to achieve it. They include:

1. Establishing a state gambling commission to license and check the backgrounds of everyone connected with card room business operations.

2. Requiring that state gambling commissioners not have worked for the gaming industry two years before being appointed; also, that commissioners take no gaming jobs for three years after leaving office.

3. Creating a Gambling Control Division in the state Justice Department for aggressive enforcement of all state gaming laws, including strict record-keeping requirements.

4. Prohibiting all publicly traded gambling corporations or outside gambling enterprises from gaining a foothold in California.

5. Prohibiting licensees or applicants from contributing more than $250 in any election for approval or repeal of a gambling-related ordinance.

Everything but the contribution limits are in similar bills sponsored by Assemblyman Phillip Isenberg (D-Sacramento) and state Sen. Quentin L. Kopp (I-San Francisco). The Legislature should approve the legislation, reinserting a campaign finance provision and resisting the predictable efforts to make changes that serve interests other than the public’s.