Living by Casinos, Losing by Casinos

If you’ve been through Gardena lately, it’s hard to imagine there was a time when the town was a winner, hauling in more money from poker than any other city in California.

Its six glitzy card clubs--one per square mile--drew players from as far as Santa Barbara and San Diego. Their losses became Gardena’s windfall, financing virtually every aspect of the city’s operations, from its police to its parks.

Today, Gardena is $5 million in the hole. Only one of its clubs remains in business--the Normandie Casino, a weary-looking gambling hall on a tawdry stretch of Rosecrans Avenue.

The theory that gambling can rescue cities struggling with budget problems has received a dramatic boost in recent years from places like Gary, Ind., and Tunica County, Miss., where casino revenues have given rise to luxury hotels, new schools and jobs.

But Gardena stands as an example of what can happen over the long haul, a warning to other municipalities now debating whether to bet their fiscal futures on gambling.

In Gardena there are no major shopping centers, no fine restaurants. Storefronts are closed. Civic pride lives mostly in memories.

It is perhaps a sign of Gardena’s desperation that officials of the South Bay city view Hustler magazine publisher Larry Flynt as their white knight. He has proposed a two-story, $30-million card room, restaurant and sports bar, scheduled to open next fall on the site of the old El Dorado club, if it gains necessary state approval.

His controversial history of pushing the limits of pornography has been conspicuously absent so far from discussions of his plans.

“The name will bring in people from all over, due to the reputation of Mr. Flynt,” City Councilman Al Defilippo says. “I can see Gardena in the next five years being in the black.”

The chase by cities of gambling loot is often a dicey proposition, influenced by political boundaries and unstable conditions. The towns that do best often feed on neighboring jurisdictions. The former steel town of Gary, for example, draws many of its gamblers from nearby Chicago. Tunica draws heavily from Memphis, just across the Tennessee border.

In its better days, Gardena relied on a huge daily migration of gamblers from a scattering of mostly blue-collar towns on the southern fringe of Los Angeles. For several decades, until 1980, Gardena’s local monopoly on card rooms accounted for nearly a third of its annual budget. Then came a raft of rival card rooms in Bell, Bell Gardens, Commerce, Huntington Park, Compton and Inglewood.

Larger, swanker clubs drove most of Gardena’s card rooms into bankruptcy. Four of them--the Monterey, Rainbow, Horseshoe and Gardena clubs--shut down in the early 1980s. The El Dorado closed two years ago.

“A lot of surrounding businesses--bars, cocktail lounges--most of them are gone now,” says Tom Parks, 66, who ran two of the clubs and is now writing a book about Gardena’s history. “When people stopped coming to the card clubs, coming into Gardena, it affected the whole town. I don’t think people really realized how dependent they were on the clubs until they started closing up.”

Gardena’s first card room was founded in 1936 by a swashbuckling entrepreneur named Ernest J. Primm, who cast a giant shadow over the town until, in his 80s, he died along with most of the card rooms.

“He pretty much controlled the city,” Parks says. “He owned the Rainbow and Monterey . . . and he controlled the [City] Council. Whatever Ernie wanted, that’s the way it usually went.”

The clubs exerted their political influence in ways that profoundly affected the city’s future. Most important, they discouraged development, fearing that new business leaders might usurp control and outlaw poker.

The price: Gardena lost a more diverse economy that would have better helped the city endure the demise of the clubs.

“There were stories for years about Sears Roebuck, for example, looking to find a site in this area, and not choosing Gardena at least partially because [of the card rooms],” says former Police Chief Richard K. Propster. “The bottom line is, we have not had a big shopping mall come into the city.”

The card rooms also worked hard to curry the favor of residents who had the voting power to eliminate gambling. Club owners sponsored children’s trips to Disneyland on their birthdays. They provided turkeys and toys to needy families. They showed tact in handling the touchy problems that resulted from compulsive gambling, barring some gamblers from the clubs if family members complained about problems occurring in their lives, rather than risk ill will and bad publicity.

The clubs’ community activism “led to, if not the popularity of the card rooms, the tolerance of them by many people,” Propster says.

People also were willing to overlook the occasional poker cheating scandals and petty crime that occurred nearby for a more basic reason: the food. No finer cuisine was available anywhere in town. In fact, quality restaurants never were built in Gardena because the card clubs offered excellent, cut-rate food--including 25-cent steaks in the 1950s--as a loss leader to entice new patrons.

Gardena’s winning ways began to end in the 1970s with passage of Proposition 13, the tax-limitation initiative that sank many towns into debt and gave rise to poker clubs elsewhere as cities attempted to make up for lost property tax revenues. Today, poker revenues have dropped from 30% to 13% of Gardena’s budget, and the city has reduced its police force and administrative staff.

Despite civic optimism over Hustler publisher Flynt’s development plan, City Councilman Steven Bradford says efforts are underway to hire an economic development coordinator to pursue more traditional projects.

“If any city should know about casting your faith on the card clubs, Gardena should,” Bradford says. “They’re a good source of revenue, but no, we’re not going to hope they’re the savior of the city.”