City Council Considers Revised Gaming, Cardroom Rules

As San Jose considers revising its gaming ordinance, Councilman Sam Liccardo says the proposed changes would leave casinos with lax oversight and go against the will of the voters to rein in cardroom growth.

The ordinance up for consideration at Tuesday’s City Council meeting would transfer some permitting to the state, provide a third party to settle disputes, allow gaming on the eighth floor at the M8trix and switch from police to civilian oversight.

The proposal “reflecting the desires of one casino [M8trix] for less police oversight, amounts to an unnecessary, costly and potentially harmful weakening of regulatory processes that serve the public’s safety and well-being,” he writes in a memo opposing the changes. “Not only is this direction unwise, it is contrary to the voters desire to curb the growth of gaming establishments in San Jose.”

Even before opening in 2012, M8trix has wrangled with the city over gaming rules. Police and city officials held up the casino’s opening for four months, partly because of concerns over how well authorities could monitor gaming on the top floor. Casino owner Eric Swallow originally planned to host high-limit poker on the eighth floor, but gaming commissioner Richard Teng and then-Police Chief Chris Moore opposed the idea.

Swallow sued the city, asking for reimbursement for money lost over the four-month delay. In March, the tower card club called off the lawsuit, but the city filed a motion to deny a stay in the federal case, angering M8trix owners.

“The fact of the matter is, there is no connection between the litigation and the permitting process for the eighth floor,” City Attorney Richard Doyle told San Jose Inside at the time. “If they want to use litigation to satisfy concerns, they’re going about it the wrong way.”

Police asked M8trix to submit alternate layouts for the top floor that would give regulators an un-obscured view of the action so the city could re-consider gaming up there, but the casino never responded.

“The police and city officials have expressed their reasonable security-based concerns on this issue,” Liccardo says in his memo. “M8trix’s failure to respond should not prompt the council to repeatedly lower their bar for the casinos or for public safety in this city.”

He also says shifting work permitting oversight to the state appears unnecessary and would pose undue risk.

“It’s not apparent what problem this solution is chasing, other than the desire of M8trix to have more lenient-or non-existent-regulation from the state,” he writes.

He also opposed the portion of the ordinance that would employ third-party mediators to handle disputes. While the move appears to be a compromise, M8trix indicated that it would only agree to the proposal only if it leads to a “joint effort in growing the industry to match the other cardrooms in California,” Liccardo states.

“Herein lays the true goal of Casino M8trix: to expand their gaming business in San Jose to match the other large card clubs in California—card clubs such as the Commerce Casino (243 tables), Hawaiian Gardens Casino (223 tables) and the Bicycle Casino (175 tables),” the memo notes.

Having failed to secure expansion from voters, who rejected Measure E in 2012, casino lobbyists have resorted to a strategy to chip away at local regulations in exchange for more growth, Liccardo adds.

“The end game, however, is the same,” he writes.

More from the San Jose City Council agenda for April 29, 2014:

  • Hotels can expect to pay higher taxes next fiscal year. The council will consider upping the Hotel Business Improvement District assessment by 25 percent. The higher fee would generate about $2.7 million in revenue for marketing to boost San Jose’s profile as a convention destination.
  • In 2006, San Jose created what it calls a Business Cooperation Program, which allows the city to collect the full 1 percent use tax allocation without it getting diverted to the state or county. The council will consider whether to extend the program another five years. The program is expected to bring in about $680,000 in revenue in the coming fiscal year.
  • Construction fees designated for new parks more than doubled in 2013 compared to the year prior, thanks to a surge in new building. The city collected $24.1 million from in-lieu park fees last year compared to $11.5 million in 2011-12.

WHAT: City Council meets
WHEN: 1:30pm Tuesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: City Clerk, 408.535.1260

Jennifer Wadsworth is the news editor for San Jose Inside and Metro Silicon Valley. Email tips to [email protected]. Follow her on Twitter at @jennwadsworth. Or, click here to sign up for text updates about what she’s working on.

4 Comments

  1. “… less police oversight, amounts to an unnecessary, costly and potentially harmful weakening of regulatory processes that serve the public’s safety and well-being.”

    I want to publicly thank Mr. Liccardo for this effort to protect me and my family, as I can only imagine how those degenerate gamblers might, after learning about San Jose’s understaffed police department, realize the stakes are higher and the risks much lower for those dealing in street crime. I mean, it’s scary enough, what with the gang bangers and East Bay drug dealers armed and running amok; but the thought of poker players — in my neighborhood! — it’s just too much to take.

  2. Now thats funny , ” If they want to use litigation to satisfy concerns , They’re going about it the wrong way ” . UH ……the same could be said about measure B . its funny how this city can see others doing wrong ,but not itself when it does the exact same thing.
    As far as Lickardo goes , always refreshing to see this guy open his mouth , about things he knows nothing about

  3. Sam is getting over-exposed he seems everywhere , just don’t get a sunburn.