Tighter card club casino regulations mulled: measures would create commission, agency.

LOS ANGELES - Spurred by a recent string of negative media reports, two bills that would toughen regulation of card club casinos are wending their way through both houses of the California Legislature.

One of the bills is co-sponsored by Assemblyman Bill Hoge, a Republican from Pasadena, and the other has been written by Sen. Bill Lockyer, a Democrat from Alameda County in Northern California. Because Lockyer is president pro tempore of the Senate and in the past has rejected similar proposals, supporters of the legislation think there is now a better than even chance that new regulations will be enacted.

At least three previous attempts to pass stricter card club regulations have been rejected or never made it to a full vote.

The proposals would create a three-member commission to oversee card clubs in the state, as well a division of gambling control in the California Attorney General's Office. The legislation would also require the clubs to file regular financial reports with state authorities, and would impose restrictions on the content of clubs' advertising. In addition, the proposed measures would require tougher background checks on potential owners and managers of the facilities.

Currently, the only statewide regulations of card clubs have to do with licensing. A potential owner/operator now has to obtain a state license but critics of current card club operations say the procedure is not strict enough.

More protection sought

"Clearly it is time to bring card room gambling under the purview of the state of California," said Hoge in a statement. "The newly created commission and division will provide a much higher level of protection from the improper activity which has occurred in some of these establishments."

Hoge did not mention any facility by name but in recent weeks the Bicycle (card) Club Casino in Bell Gardens has been the subject of several negative press reports, including a segment on CBS's "60 Minutes," and congressional hearings two months ago. The hearings and reports have been about alleged criminal activity at the club, and the fact the facility's majority owner is the federal government.

The U.S. government seized the Bicycle Club in 1990 after prosecutors proved it was built in part with $12 million in laundered drug money from Florida.

Operators of the Bicycle Club were unavailable to comment last week on the proposed regulations, said a spokeswoman. But, in general, the card club industry in the state is working with legislators to come up with a regulation bill, according to Jim Branham, a state assembly staff member who is currently working for Hoge.

"I think the industry now feels that some kind of regulation is needed and inevitable, so they're going along and trying to get the best deal they can," said Branham.

The card club industry, he said, is particularly concerned about attempts to restrict the contents of advertising. According to Branham, the proposed bills to regulate card clubs would prohibit advertising of the clubs as family entertainment and to minors, and would prohibit them from boasting of how much money players could win.

"They (clubs) don't think it's right that clubs should not be able to say how much money you can win at the clubs when the state does that with the lottery," said Branham.

Card clubs have been permitted in California for many years and are different from Nevada-style casinos because only certain kinds of card games are permitted. In addition, players bet against each other rather than the house, as is the case at full-scale casinos that also include such games of chance as craps, black jack, roulette and slot machines.

Though there are card clubs throughout the state, Los Angeles County is a primary location for them. In addition to the Bicycle Club there are card clubs in Commerce and at Hollywood Park in Inglewood. Other clubs are under construction in Compton and Hawaiian Gardens.

A key part of the regulations would be tighter financial reporting by the card clubs, said Branham. He said they currently only report their finances to local governments for tax purposes.

"There has to be greater scrutiny of what is going on, how much money they're taking in and where it's going," he said.

Hoge is the sponsor of the regulation bill (AB 3181) with Assemblyman Phil Isenberg, a Democrat from Sacramento. That measure has passed the Assembly and has moved to a state Senate committee for consideration.

Lockyer's bill has passed the Senate and has moved to a committee of the Assembly.

Both bills are being supported by California Attorney General Daniel Lundgren. California Gov. Pete Wilson has not officially stated his position but Branham said Wilson has voiced concerns about the Back of regulation of card clubs.