State Closes Compton Card Club, Cites Cash Shortage
Authorities shut down gambling operations at the Crystal Park Hotel and Casino and revoked its owner’s gaming license Saturday, saying auditors found he tried to cover up a cash shortage.
State Office of Gaming Registration auditors found numerous “improprieties” in their most recent review of the Compton card club’s ledgers, Atty. Gen. Dan Lungren said.
The auditors found that more than $660,000 worth of chips owed to four patrons had been transferred from their personal accounts to the casino’s “long-term liability” account, officials said. That transfer appeared to be an attempt “to hide the fact that the card club had only 60% of the cash on hand to pay for all of the outstanding poker chips,” Lungren said.
Under a settlement reached with the Department of Justice in June, the casino’s owner was required to have enough cash to cover at least 75% of the chips.
Crystal Park’s hotel remained open, but the job status of the card club/hotel’s almost 1,000 workers could not be determined Saturday.
The club and its owner, Rouben Kandilian, have been under scrutiny since Crystal Park opened in October 1996. Kandilian could not be reached for comment, and with his license revoked, top casino officials seemed unsure of what would happen to the club.
The property is owned by Hollywood Park Inc.; Kandilian’s company, Compton Entertainment, is the tenant.
City officials said Saturday they hoped Hollywood Park, which invested most of the $30 million needed to build the club and remodel the hotel, would help find a replacement operator rather than abandon the facility.
The Inglewood-based company cannot operate Crystal Park under California law; it can only act as landlord. It had been trying to evict Kandilian since May when he failed to make his $350,000 monthly rent.
Even aside from the rent due Hollywood Park, Kandilian is deep in debt. By his own estimate, he owes $4.5 million in loans he took out to launch the casino. He owes Compton about $1.4 million in back gaming taxes and fees.
Mayor Omar Bradley has said that the facility produced about $2 million in taxes the city would not otherwise have received. Bradley and his wife, who works for the club’s public relations department, could not be reached for comment.
Dealers, floor supervisors and others were stunned to find that they may no longer have jobs. But several said they had seen indications the club was in trouble.
The 110-table card club reported it was making about $3.5 million per month for the first few months it operated, but in January, it began falling behind in its monthly payments to Compton, and its reported revenue has plummeted. The casino laid off about 200 employees last spring, and employees said Saturday that some of their paychecks bounced after one recent pay period.
“We were hoping [Kandilian] was going to save the company,” said Arnel Laxa, a dealer in the California games section. “Now we’re going to have to start all over again.”
Kandilian has said the club had extended some $4 million in credit to players who never paid it back, and added that expenses were too high before the layoffs and other cutbacks.
“It’s a shame,” said Daniel Thomas, a manager in the casino. “Innocent people can get hurt in this business if they’re not careful.”
