The city council of San Jose in Northern California has voted 10-1 to join a lobbying group of cities trying to protect their card rooms: California Cities Gaming Authority (CCGA).
San Jose has two card rooms, Bay 101 and Casino M8trix, that pay millions in taxes and are a major revenue source for the city. Both are threatened by new regulations
Bena Chang, assistant to San Jose City Manager Dave Sykes told the council, “The bottom line for us is that card rooms really do provide the city with some needed revenue that goes into our general fund and provides basic city services.”
In 2018 and 2019 the city’s card room tax brought in about $18.9 million. That fell to $13.5 million under pummeling from Covid-19 closures.
The card rooms have fought to meet state guidelines, such as moving outdoors into large tents and investing in heaters after the weather became cold. Despite this, the state closed all card rooms, leaving Indian casinos alone since they are on sovereign land.
Casino M8trix was closed for eight months last year and lost about 65 percent of its revenue, according to vice president, Rob Lindo, who added
“We spent hundreds of thousands of dollars preparing Covid-19 prevention protocols, purchasing cleaning supplies, masks, gloves, face shields, tents and temperature screening technology so we could operate the card room and restaurant outdoors.”
The only opposing voice on the council was that of Mayor Sam Liccardo, a longtime opponent of gaming in all its forms. He said, “I will oppose this and other efforts to expand gaming in this city.”
The California Cities Gaming Authority is a joint powers authority made up of cities, such as Colma in Northern California and Gardena in Los Angeles County that host medium-size card rooms. It requires annual dues of $30,000. It acts as a lobby group with members of the legislature.
Besides surviving Covid, California’s card rooms are gearing up to oppose changes in card room regulations proposed by the Bureau of Gaming Control. These include banning games that look similar to blackjack, which tribal casinos have an exclusive right to offer, according to their tribal state gaming compacts.
State law also bans games where a casino has an interest in the outcome, such as blackjack, three-card poker and pai gow poker. Tribal casinos are allowed to offer such games.
San Jose’s two casinos estimate they could lost a combined $25.7 million annual and be forced to lay off 150 employees.
Lindo told council members, “We are absolutely concerned about any changes to the current and long-standing laws and regulations governing how games operate in California card rooms such as ours. The player-dealer style games offered in California card rooms have been deemed legal and attempts to change those rules pose a serious threat to our business and its continued viability.”
