Larry Flynt threatened last week to jettison his planned purchase of the Normandie Casino unless the city of Gardena, California pulls back from trying to squeeze more tax money out of that casino and his other casino in the city.
Flynt, the founder of the Hustler porn and adult entertainment empire, complained that the city council was treating him like a “second-class citizen.” He accused the council of changing the conditions once he agreed to purchase one of the two casinos that provide a large percentage of the city’s operating income.
The city wants to replace its current 12 percent gaming revenue tax with requiring that Flynt pay a guaranteed $800,000 every month, unless revenues for each casino exceeds $2 million a month, when the rate would be lower. The city is basing that amount on the average tax payment that the two casinos typically pay.
In a game of political chicken with the council, Flynt declared that he was ready to walk away from the purchase.
Referring to his new purchase as “a piece of junk,” Flynt said he would need to spend $17 million right away in refurbishing the property and a total of $60 million over the next few years to market and expand the business. He promised that the city would get a windfall of property taxes if it would just leave him alone.
His blandishments fell on deaf ears and the council voted 3-1 for the new tax structure. Flynt later commented that he wouldn’t be able to afford to upgrade the property and still make a profit.
The Hustler magnate complained that he had “saved the city from bankruptcy” through the taxes he has paid. He told Casino News that he would dedicate himself to driving the current council from office and replace them.
“I can’t spend $60 million and get a return on my investment with the city’s tax structure the way it is,” he told the Daily Breeze. “It’s totally impossible. What if there’s another recession? I can’t guarantee a certain revenue. It’s a ridiculous request. It just doesn’t work. But they can’t grasp that. I will support candidates for City Council who are friendly to gaming.”
The next city council election is in March of 2017. A special election could be held in November to replace former Mayor Paul Tanaka, who resigned in a corruption scandal or the council could appoint a replacement.
Flynt added, “In the 16 years we’ve been down there, I’ve paid the city $80.5 million in tax revenue. We’ve been paying the city payroll and I don’t think anyone has done as much for the city and received so little.”
This week Flynt reiterated that he planned to walk away from the deal. “A proposal that only a fool could sign, and I’m no fool,” he said. “I’ve never heard in my fifty years of business, I’ve never, ever heard of a deal like that.”
Flynt bought the Normandie after the longtime owners lost their gaming licenses and were forced to sell the venerable card room that dated back to the 1940s.
The council previously fought with Flynt over the signage for his Lucky Lady Casino (the new name for the Normandie), which some judged to be too racy.
Council member Tasha Cerda said, “I still believe this is offensive to women. For anybody who’s not going into the casino, to see this image of a woman shaking her legs, scantily dressed, I just don’t think is good.”
