The San Jose, California card room Casino M8trix has sued the city over a tax measure that voters approved in November by 73 percent.
The card room seeks to have Measure H invalidated by the Santa Clara County Superior Court because one segment of the measure has reportedly been ruled illegal under state law by the California Bureau of Gambling Control. The Bureau says that it was illegal for the city to increase the number of table games.
The segment the card club is aiming at would increase taxes on the city’s two card clubs in tandem with the increase in the number of tables. After the measure passed Casino M8trix applied to the California Gambling Control Commission to increase its tables from 49 to 64. Under the measure the club’s taxes would increase from 15 percent to 16.5 percent.
It is still waiting for the commission’s decision on its application. It seems that the lawsuit is a hedge for the casino in case the commission agrees with the bureau.
Casino M8trix wrote to East Bay Times, “Casino M8trix believes it is only fair that the increased tax that was only one part of Measure H be deferred until the additional gaming tables, which give us the ability to pay that new tax, are approved.”
In the lawsuit the card club argues, “The unlawful provisions of Measure H are not severable from the lawful provisions,” adding, “… the evidence of voter intent indicates that it was approved as a full and comprehensive amendment to the city’s gaming ordinance.”
The city hoped to generate $2 million annually from the new tax.
