Larry Flynt v. City of Gardena Goes to Infamous Publisher in Casino Tax Squabble

Posted on: July 23, 2016, 10:00h. 

Last updated on: July 22, 2016, 12:41h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

Infamous publisher Larry Flynt won his squabble with the city of Gardena in Southern California this week. The battle was around a disputed economic package for his Hustler and Normandie casinos.

Flynt purchased the Normandie, the Golden State’s oldest card club, earlier this month, after its previous owners had run into licensing difficulties. Members of the Miller family, whose father Russ Miller opened the club in 1947, had their licenses revoked after being convicted on federal money laundering charges in January.

Convicted felons are unable to operate a gaming establishment by law, and there were fears that the iconic club would close for good unless a buyer was found quickly. But Flynt, whose Hustler Casino is less than a mile away, stepped in, purchasing the Normandie for an undisclosed sum.

Flynt says he will invest at least $60 million in renovating the old club, before reopening it as “Larry Flynt’s Lucky Lady Casino,” as well as re-employing the Normandie’s 400 or so workers.

Threatens to Bail Out

But Flynt became infuriated when the City Council voted to grant tax breaks to the Lucky Lady only if he agreed to pay a minimum of $800,000 a month to the city from both casinos. The going rate of taxation had previously been 12 percent of gross revenue, and in 2014, the Hustler and Normandie collectively paid around $9.5 million to the city.

The proposed deal of at least $800,000 per month would equate to $9.6 million a year, but it wasn’t the amount, it was the monthly guarantee that Flynt objected to.

“That makes absolutely no sense at all,” Flynt told the Daily Breeze, a South Bay news source. “That’s a proposal only a fool could sign and I’m no fool. You can’t guarantee revenues. In my 50 years of business, I’ve never heard ever of a deal like that.”

Workers Support Flynt

Unwilling to renege, Flynt gambled. Knowing that his two casinos, the only two left of the once-thriving Gardena card club scene, were among the biggest contributors of revenue to the town, he threatened to bail out of the Lucky Lady for good and sell the license if the council didn’t back down from its dictums.

Supporting Flynt at a City Council meeting last Wednesday were former members of the Normandie’s staff, desperate to preserve their jobs.

“Please kindly think about we have families that depend on us and they are looking forward to good living. Right now we cannot provide for them because we are not working,” casino employee Fatima Nelson told council members. “Please kindly sign this deal because, if you do that, you’re going to put food on our plates.”

The gamble paid off, and the case of the City of Gardena versus Larry Flynt quickly crumbled.