Los Angeles Card Room Closures Putting Communities on Financial Brink

Posted on: December 2, 2020, 09:27h. 

Last updated on: December 2, 2020, 11:20h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Following another wave of coronavirus cases in Los Angeles, local card rooms shuttered a second time last week, bringing more financial strain to the towns in which those venues operate.

Card room
Players sit at a table game at Hawaiian Gardens Casino. That venue and other Los Angeles card rooms are closing again because of a spike in COVID-19 cases. (Image: Los Angeles Times)

On Tuesday, Los Angeles County reported 7,593 new coronavirus cases. This easily topped the prior daily record of 6,124, which was set just last week.

That ominous high was reached just a day after the largest US county by population instituted its strictest stay-at-home directive to date. It is one that orders closures of card rooms and playgrounds and eliminates in-person dining at local restaurants.

For officials in Bell Gardens, Commerce, and Hawaiian Gardens — homes of the Commerce, Hollywood Park, the Bicycle, and the Gardens card rooms — the new closures mean crimped budgets and elimination of some essential services.

We’ve lost over $13 million already and that impacts public safety, it impacts our programs for the community, so we really need this casino to get up and going,” said Commerce Mayor Ivan Altamirano in an interview with ABC 7, the local affiliate of that network.

The second wave of card room closures arrives after the venues were open for less than two months following a six-month shutdown. It also comes after the operators spent millions of dollars so that business could be conducted outside in accordance with California protocols.

Poor Political Optics

The aforementioned LA-area casinos combine to employ more than 10,000, many of whom have been out of work for months. That’s contributing to a statewide unemployment rate of 9.3 percent as of October, according to the Bureau of Labor Statistics (BLS). Only Hawaii, Louisiana, Nevada, and New York have higher jobless rates than the Golden State.

Further burdening the card rooms was a recent curfew order from Gov. Gavin Newsom (D), forcing Californians to stay at home between 10 pm to 5 am. While some counties aren’t enforcing that directive, the policy is punitive for gaming establishments, which derive substantial portions of revenue late at night and into the wee hours of the morning.

The new policies from the governor’s office and LA County arrive more than six months after the card rooms encountered difficulty in qualifying for the Small Business Administration’s Paycheck Protection Program (PPP). That likely means cities such as Bell Gardens, Commerce, and Hawaiian Gardens have been in precarious financial positions for nearly all of 2020.

The decision to implement the curfew and shut down the card rooms comes after Newsom, a Democrat, was photographed at The French Laundry, a tony Napa Valley eatery, with dozens of people not wearing masks. San Francisco Mayor London Breed was spotted at the same restaurant a day later.

In late November, Los Angeles County Supervisor Sheila Kuehl was seen dining outside at a Santa Monica establishment after attending the supervisor’s meeting at which she voted to ban outdoor eating, calling it “a most dangerous situation.”

Dire Straits

For the LA-area municipalities that are homes to card rooms, things are looking bleak.

Earlier this year, Bell Gardens Mayor Alejandra Cortez said the Bicycle Casino accounts for $15.2 million, or 46 percent, of that city’s general fund. The town would be out millions of dollars if that gaming property is closed for an extended period of time.

Cortez said some police positions have been eliminated, along with salary reductions for city workers, to cope with the revenue shortfall.

In Commerce, Mayor Altamirano says 200 city staffers were furloughed and revenue is already light by $13 million this year due to Commerce Casino being closed.