The California Gambling Commission has found that the measure San Jose voters in November overwhelmingly approved to allow the city’s two card clubs to increase their table games violates state law that limits how many tables a casino can have.
Measure H also included a provision that allows the city of San Jose to collect more taxes from the two casinos, the Bay 101 and Casino M8trix. It says it plans to collect that tax, even though the casinos are not able to increase the number of tables.
Not surprisingly, the casinos are going to court to get the measure thrown out.
The commission in April denied applications from the two casinos who sought to increase their tables from 49 to 64, as allowed by Measure H, which 73 percent of voters approved of.
The commission insists it is simply enforcing the law. Todd Vlaanderen, chief counsel for the gambling commission, commented at the meeting: “It’s not the commission that’s voiding the ordinance or the voters’ preference, it’s the statute that would be doing so. The commission is just following the statue.”
The Gambling Control Act prohibits a city from increasing the total number of tables at a card room by 25 percent or more over what it had in 1996.
Measure H was sold as a way to increase city tax revenues by raising taxes from 15 percent to 16.5 percent, which would be used for emergency services, homeless housing and other infrastructure. The city had hoped to raise an additional $9 million annually.
City Attorney Nora Frimann defended the city’s stance that it will collect more taxes: “The Commission’s decision means that the cardrooms do not have state approval for additional tables, and the cardrooms can challenge that decision in court,” she wrote in an email to the San Jose Mercury News: “Measure H has a severability provision so we believe that it remains in effect even if a section of it is challenged or deemed to be not enforceable.”
Robert Lindo, vice president and director of Casino Matrix, which has challenged Measure H, said they are also weighing whether to challenge the commission’s ruling. He said the additional taxes without additional revenue will prevent the casino from expanding and hiring 100 new employees. He wrote: “Sadly for the residents of San Jose, the city seems to have botched both ballot Measure H and their attempt to secure more gaming tables between the cardrooms. At best, what the city did is unfair and questionable.”
