Mercury News: Herhold: Time to pay attention to San Jose’s casinos
By Scott Herhold
It’s hard to imagine it now, but there was once a time, in the late 1980s, when card clubs looked finished in San Jose.
The indictment and conviction of the Garden City’s officers and directors, captured in a famous photo taken through a courtroom window, seemed to mark the coda of their reign.
Then, in the 1990s, the clubs agreed to pay a substantial tax to the city, a way of assuring they would stay in business. That tax produces around $16 million a year for the hard-pressed city (see chart below).
And now a gleaming M8trix building and a planned new Bay 101 are forming a casino district next to Highway 101, our own little Vegas on stilts.
None of this is good, no matter how much city officials try to justify it by the money. Aside from the manifold social ills that the casinos bring — a stabbing occurred in the M8trix parking lot just two weeks ago — simply regulating the clubs, particularly M8trix, has become a monumental headache for city officials.
I’ll try to avoid getting too much in the weeds, but two weeks ago, the council signaled that it was ready to weaken regulations on the clubs, providing them with the possibility of arbitration, turning some permitting functions to the state, and clearing a path for M8trix to open an eighth-floor gambling mecca.
LOBBYING BLITZ
The charge was led by Councilman Pete Constant, who delivered a lengthy diatribe against the city’s rules. The vote came after a lobbying blitz from M8trix impresario Eric Swallow and his henchmen, Rich de la Rosa and Sean Kali-Rai (M8trix is the former Garden City).
It’s hard to doubt Constant’s sincerity — he leans libertarian on these issues and is eager to promote the business — but he’s deeply and profoundly wrong.
It’s not that the city or the police overseers are perfect. Anyone who has dealt with the city knows that well. But the clubs need regulation, however much they may dislike it. There are too many ways to cheat, and too many entry points for bad actors.
One of the oddities of this debate is that Bay 101 is generally content with the city’s rules. M8trix has fought them in a take-no-prisoners fashion, suing the city on the way.
EIGHTH FLOOR
Take the issue of eighth-floor gambling, which M8trix conceived as a way of attracting high-rollers, including those on a layover from the airport. That eighth floor is reached by an elevator and divided into several compartments. The upshot? It’s impossible to know what’s happening. A raid by cops would be frustrated.
City Manager Ed Shikada told the council that administrators have suggested to M8trix that they should start by taking out the doors and walls. That suggestion has gone nowhere. When they are asked about this, M8trix officials say city planning officials approved the eighth floor.
So what’s the answer? I was impressed by a newsletter from Councilman Sam Liccardo, a mayoral candidate and the only dissenter on the vote.
“If this issue remains beneath the radar of media attention or public scrutiny, police oversight over casino operations will be substantially weakened,” he wrote.
The public rejected an initiative from the San Jose casinos in 2012, albeit it with the help of Indian gaming meccas who see them as competitors. It’s time to pay attention again.
You can read more here.
