Card Clubs Still Hold Strong Hand : Gambling: Governor has signed a modest reform bill that has drawn criticism. A proposal containing tougher rules faces long odds in the Legislature.

Despite political spending in the millions, diverse lobbying interests going at it full tilt, long hours of debate and heaps of paperwork, the Legislature has managed to pass only one gambling law this year exerting new state authority over the growing card-club industry.

For the third year in a row, tough regulation called for by the attorney general, a number of lawmakers and alliances of religious groups and Nevada casinos has been ignored or sidetracked.

The bill that was signed into law last week by Gov. Pete Wilson may be the only modest reform enacted this year, unless a stronger bill defies the odds by squeaking through the Legislature before lawmakers recess next month.

The new law endeavors to halt the growth of poker parlors statewide for a limited period. Other sections in the same bill loosen the rules for owners to take control of card clubs--but only if the club is located at a horse racetrack.

Part special interest, part wider interest, the new law is seen both as protection against further growth of an industry regarded by critics as predatory, and a handsome boost for a favored few club owners.

“It’s a card trick,” said Sen. Tom Hayden (D-Santa Monica), who has pushed more potent oversight legislation. “All it does is protect existing card clubs against competition. We’re nowhere on the needed regulation of this industry.”

Others concerned about the spread of gambling in California point to parts of the law they like.

In its most widespread application, the bill (SB 100) by Sen. Ken Maddy (R-Fresno) decrees that for three years beginning Jan. 1, no local jurisdiction may hold an election to allow card clubs where none existed before, or allow more clubs to open in cities and counties that have such clubs now.

“It’s a good bill,” said Gene Erbin, a lobbyist for Circus Circus, a casino company interested in protecting its Nevada interests. The three-year moratorium on card club expansion “is a good outcome.”

The Rev. Lou Sheldon, whose Anaheim-based Traditional Values Coalition has proven it can influence gambling-bill votes, also supports the new law. “In reality, it’s the best we can get” for now, he said. It provides momentum that could lead eventually to a statewide voter initiative to rein in gambling if stronger legislation is not enacted, Sheldon said.

The moratorium, however, is not likely to stop more clubs from opening, or even slow the process. With 251 clubs operating in the state and turning over about $8.4 billion a year in bets, there are license applications before the attorney general for 187 more.

With all of those clubs licensed and running, plus pending applications to expand existing clubs, the number of card tables for players to bet at could rise to 5,429, more than triple the number now, according to the attorney general’s records.

None of the new or expanded license applications on file are affected by the moratorium beginning Jan. 1, and more applications are expected to pour in before the deadline.

Also seeking to beat the deadline are at least five cities that are planning elections this fall to authorize card clubs: Palm Springs, Irwindale, Pomona (where a similar measure failed in April), South San Francisco and San Mateo.

If approved, like the existing clubs, the new gambling ventures would operate having received an initial screening by an understaffed unit in Atty. Gen. Dan Lungren’s Department of Justice, and thereafter answer almost exclusively to local authorities. These authorities, in turn, answer to local elected bodies who depend heavily on the taxes and fees they charge card clubs to pay for public services.

Lungren has called this linkage tailor-made for conflicts of interest. His office has produced witnesses at legislative hearings who have testified to instances of rule-bending and outright crime occurring without vigorous intervention from local authorities--or local authorities greeted with sanctions from their superiors when they lean too hard on a club.

Tougher laws are needed to keep the industry clean, Lungren has said. He has proposed legislation to set up a powerful California Gaming Control Commission and a new unit in the Department of Justice for screening, monitoring and overseeing card clubs.

As for the law enacted this week, Lungren spokesman Dave Puglia said that it’s no more than a “baby gaming regulation program,” although a step in the right direction. He referred to new authority for the state to investigate racetrack card clubs--and for the first time levy fees against the clubs to cover costs of the probes.

But a separate part of the new law is also seen as a classic example of special interest pleading resulting in one-point economic benefit.

Until now, California law has prohibited publicly traded corporations from operating card clubs. The new law exempts from that provision the owners of five California racetracks. But in fact, the measure benefits only one track immediately--Hollywood Park in Inglewood--because no other track has a card club on the premises.

For months, Hollywood Park owners, led by major shareholder R. D. Hubbard, have pushed for legal relief to operate and derive direct profit from the Hollywood Park Casino, a card club they built and opened at the track last year but must lease to outsiders to run. The new law grants that relief with immediate effect.

Two other tracks near San Francisco could benefit later. Golden Gate Fields in Albany has voter permission to install a club at the track. The impending city vote in San Mateo would authorize a card club at the Bay Meadows track.

Nothing in the new law, however, addresses the need for strong state oversight of the card club industry as called for by Lungren, Hayden, other lawmakers and church-affiliated groups that lobby against gambling in all its forms.

Its advantage is that it survived the legislative free-for-all over gambling bills to reach Wilson’s desk and become law, a fact credited to the astuteness of Sen. Maddy in rounding up sufficient consensus.

The Lungren measure (AB 11), introduced by Assemblyman Phillip Isenberg (D-Sacramento), made it through the Assembly much amended but is stalled in the Senate, igniting the latest of many battles that break out regularly on the gambling front.

Senate leader Bill Lockyer (D-Hayward) has held up movement toward a floor vote of the Lungren bill until completion of a study he commissioned of gambling’s effects on California--to the chagrin of those pushing for the gaming control bill.

“This bill doesn’t need to be studied any longer,” said Lungren when he learned of Lockyer’s decision. “It needs to be passed.”

Several supporters of the bill said, on condition they would not be named, it appeared Lockyer was deliberately killing off chances that Lungren’s bill would be passed this year “to keep the juice flowing”--that is, political contributions rolling in to influence the outcome--for as much as one year longer.

Since 1990, gambling interests have contributed more than $6 million to statewide elected officials and legislators, according to records filed with the secretary of state. In the first six months of this year, major donors among those interests listed $700,000 in contributions.

“I have not maneuvered, stalled nor derailed anything,” Lockyer declared in a July 27 letter to a Northern California newspaper.

Lockyer spokesman Sandy Harrison said that “juice has no role in this situation” and that Lockyer anticipates the study would be completed in time for the Senate Rules Committee to review, then vote on sending the Lungren bill to the floor for final passage before the Legislature recesses on Sept. 15.