Enrique Perez loves the excitement of poker. So last week he was part of the biggest tournament crowd ever at Commerce Casino.
In fact, so many card players showed up in Commerce for the annual L.A. Poker Classic’s kickoff that some had to stand on the sidelines to wait for tables.
“I like the adrenaline, the action and the competition,” said Perez, 37, an L.A. security guard who stopped trekking to Las Vegas last year when the cost became prohibitive. These days, he said, “I only go local.”
Seems surprising that local card clubs such as the Commerce Casino can draw record crowds during a recession that has even dimmed the allure of Vegas? It may be, but proof of their popularity is in the numbers.
Los Angeles County’s seven largest card clubs reported gross 2008 earnings of nearly $506 million, up about 1.2 percent from the previous year, according to figures compiled for the Business Journal by a former executive of the California Gaming Association, an industry trade group.
While such growth is less than double-digit percentage gains experienced in the past, it’s a far cry from the downturn hitting the rest of the gaming industry as L.A.’s big population of gamblers appears to be staying closer to home to pinch pennies.
Nevada casinos reported statewide revenue declines last year of nearly 9 percent and may see a similar drop this year, according to IBISWorld, an international business information firm with officesin Los Angeles. The extensive unraveling has made headlines, forcing big-name Las Vegas hotels to slash room rates.
The decline is even affecting California Indian casinos, which, by one estimate, likely saw revenues fall at least 10 percent last year, putting some major casino construction projects on hold.
By contrast, the L.A. Poker Classic at the Commerce Casino drew some 1,600-plus players on opening night at least 400 more than last year with each entrant plopping down $330 for a chance at winning up to $124,000.
“This is the largest single day of tournament poker that we’ve ever had,” said Tim Gustin, casino manager and vice president. “I think the future is good.”
Shuffled deck
The county’s gambling halls have no slot machines or dice games such as craps despite the use of the word “casino” in many of their titles because under law they are largely limited to card games such as poker.
They range from the huge Commerce Casino, one of the largest card clubs in the country, to the tiny Club Caribe in the city of Cudahy. There are two others in Gardena one owned by porn king Larry Flynt as well as clubs in Hawaiian Gardens, Bell Gardens, Compton and Inglewood.
To encourage local traffic, the clubs, which can attract 9,000-12,000 customers in a 24-hour period, also offer a host of games appealing to various ethnic groups including pai gow and baccarat for Asians, as well as pan nine, a pursuit favored, managers said, by elderly Jewish women
Industry analysts, including Andy Schneiderman, general counsel for the Commerce Casino and a former president of the California Gaming Association, attribute their relative well-being to two major factors.
First, local card clubs are benefitting from a stay-at-home attitude increasingly pervasive among some small-time gamblers who, with less disposable income in an economic recession, are choosing Los Angeles County casinos over those in Las Vegas, where they must pay for transportation and hotels. To some extent, the same pattern is affecting Southern California’s Indian casinos, most of which are in outlying areas.
But there’s a second reason that card clubs are holding their own: the way they do business. While traditional casinos operate house bank games, including slot machines, that pit players against the club, such betting is illegal in California, where players bet against other players.
The only exceptions are Native American casinos, which, despite major opposition from envious card clubs, were handed a monopoly on that type of betting by California voters in 2000. So, despite what seemed like a defeat at the time for card clubs, they are better positioned than traditional and Native American casinos to succeed when economically pressed players bet less.
“In a bad economy, people walking into a casino have less to play,” said Schneiderman. “Here it doesn’t matter whether they come in with $100 or $10,000. We make money on people just walking through the door. In essence, what we’re offering is seat rental at a flat rate per game.”
Among the major benefactors of the financial structure are the cities in which card clubs thrive, especially in an era when cities are almost uniformly cutting services and employees.
“We’re very fortunate to be home to a card club during these times,” said Ernesto Marquez, city manager of Hawaiian Gardens, which derives about 75 percent of its general fund or $13 million a year from license fees paid by the Hawaiian Gardens Casino. “Because of that revenue stream we’ve been able to stabilize the city’s finances. We’ve been affected by the bad economy, but for the most part not as much as the surrounding communities that don’t have casinos.”
Uneven playing field
Of course, the establishments are not doing equally well. At the Bicycle Casino in Bell Gardens, Chief Executive Hashem Minaiy said revenues are slightly down as players cut back their time at the tables.
“Some people don’t have the money to stay,” he explained.
The most directly impacted are casino employees, especially those who depend heavily on tips.
“Customers are paying the same to play, but tipping dealers less,” said Mark Taylor, a floor man at the Bicycle Casino who supervises dealers.
The phenomenon has definitely affected Ricky DeCarlo, 47, who’s been dealing poker at the Bicycle Casino for 25 years and recently experienced a 20-percent income decline.
“A lot of them are gambling addicts,” he said of the people who frequent his table. “They’re still playing, but because of the economy, they’re playing tighter, safer and giving fewer tips.”
Though the casino has not laid off anyone it has reduced working hours in some cases.
“It used to be good until 3 a.m.,” DeCarlo said, “But now they make you go home. If it gets any worse, we could go to four-day weeks.”
Given the larger picture, however, club operators remain optimistic.
Kelley O’Hara, the Bicycle Casino’s director of marketing, said card clubs are relatively well insulated from recessions especially when players believe they can make a killing to earn some extra money.
“It’s a skill-based game from which people can actually take home money,” she said.
Still, despite all the woes of Vegas, the card clubs are likely in for some tough competition this year from the famed Nevada gambling mecca, which has rediscovered the small gambler after years of building luxury hotels and attracting world-famous chefs selling meals costing hundreds of dollars.
Amid a sharp cutback in U.S. and worldwide air travel and tourism, Vegas casinos are slashing room rates and offering up discount packages, with some third-tier casinos even advertising room rates for around $20 a night.
With gas still about $2 a gallon, that could be enough to attract many of the small-time gamblers who patronize the card clubs. But the local clubs may have the economy and their special appeal to draw upon.
“I don’t like Vegas because you can smoke in the casinos and I’m allergic to smoke,” said Christopher McFarland, 30, of Hollywood, who plays once or twice a week, usually at Commerce or the nearby Bicycle Casino. “It’s also a matter of available funds. I’m less likely now to travel and play.”
Los Angeles County Card Clubs
Bicycle Casino Bell Gardens
Owner: Bicycle Casinos LP
Description: 123,000 square feet with 82 table games including poker and Asian/ethnic games such as Chinese poker, crazy pineapple and lowball
Club Caribe Cudahy
Owner: S & S; Gaming Inc.
Description: Eight table games and four poker tables, featuring mostly blackjack
Commerce Casino Commerce
Owner: California Commerce Club Inc. (multiple investors)
Description: 90,000 square feet with 243 gaming tables featuring Texas hold ’em, Omaha and high-low as well as Asian and ethnic games
Crystal Casino Compton
Owner: Celebrity Casinos Inc.
Description: 100,000 square feet, 23 table games including no-bust blackjack, Caribbean stud, pai gow poker and pai gow tiles
Hawaiian Gardens Casino Hawaiian Gardens
Owner: Hawaiian Gardens Casino Inc. (Irving and Cherna Moskowitz, shareholders)
Description: 39 table games, 61 poker tables featuring Mexican poker, Texas hold ’em, seven-card stud, Asian and ethnic games
Hustler Casino Gardena
Owner: Eldorado Enterprises Inc. (Larry Flynt, shareholder)
Description: 30,000 square feet, 30 table games including blackjack, Texas hold ’em, no-limit hold ’em, seven-card stud, Caribbean stud and baccarat
Hollywood Park Casino Inglewood
Owner: Century Gaming Management Inc.
(family partnership)
Description: 70,000 square feet, 33 table games and 67 poker tables featuring Mexican poker,
no-bust blackjack and pan nine
Normandie Club Gardena
Owner: Normandie Club (family partnership)
Description: 15,000 square feet, 53 table games including blackjack, pai gow poker, pan nine, pai gow tiles and Caribbean stud
