Shuttered Los Angeles-area card casinos and cities that rely on the revenues they generate are appealing for state and federal assistance as the coronavirus pandemic continues.
Hawaiian Gardens is especially hard hit as nearly 70% of the city’s general fund comes from sales tax revenue and card club fees generated by The Gardens Casino.
The city says it will be forced to offset the known losses of more than $1.5 million in the current fiscal year through reserve funds, layoffs and the reduction or elimination of youth and senior programs, police services, transportation options, nonprofit partnerships and infrastructure improvements.
“To say we’re concerned is an understatement,” City Manager Ernie Hernandez said Friday. “What will really suffer is quality of life.”
A dire situation
In an April 9 letter to California congressional leaders, the California Gaming Association called the situation dire.
Most of the casinos have fewer than 500 employees, the association said, and although it appears they would qualify for emergency Paycheck Protection Program (PPP) funds, businesses that get 33% or more of their revenue from legal gaming operations can’t access the relief loans.
“Without the help of PPP funding, California’s gaming operators, all of which voluntarily ceased operations in mid-March, will be forced to permanently lay off employees and some may not be able to reopen,” association President Kyle Kirkland wrote.
Seeking SBA help
The Gardens Casino employs about 2,000 workers, which is well above the less-than-500-employees cap to qualify for a PPP loan. But Keith Sharp, the facility’s general counsel, said the casino still hopes to receive Small Business Administration funding.
“The SBA has a long-standing rule that doesn’t allow loans for gambling businesses,” he said. “We’re trying to fix that, but we’re having a heck of a time right now. We’re hopeful that some elements of the stimulus package will loosen the reins. Many of our employees are minimum wage workers who rely on tips.”
In a letter sent to Gov. Gavin Newsom, Hawaiian Gardens Mayor Jesse Alvarado said the closure of The Gardens Casino is having a severe ripple effect.
“It has the most significant financial impact to any city with a casino in the state of California and has played a critical role in the city’s ability to fight crime and roll back major gang issues,” he wrote.
The city hasn’t determined how many employees will have to be let go, but it issued advance layoff notices to all city workers so when the reduction takes place it can happen quickly.
Alvarado is asking Newsom for the following:
- Redirect the $97 million surplus in California’s gambling control fund to help the casino to re-open when it is safe to do so and to assist its employees and the community during the crisis
- Provide relief and clarification regarding the casino’s ability to access state and federal relief programs, including unsecuritized loans without burdensome and untimely regulatory processes
Grim predictions
The Bicycle Hotel & Casino in Bell Gardens is a big moneymaker for that city as well, with sales tax and card club fees accounting for 46% of the city’s general fund revenues. If the casino’s closure extends through April 30, Bell Gardens will lose more than $2 million, city officials said.
That’s the equivalent of six police officers and a 26.5% reduction in parks and community services. A closure continuing through June 30 would result in a projected loss of more than $4.8 million for the city, as well as the elimination of 33 full-time positions.
Bell Gardens Mayor Alejandra Cortez also wrote to Newsom asking for “immediate executive or regulatory action” to address the situation.
“The Bicycle Club & Casino is vital to the service provided to the residents who live in the city of Bell Gardens,” she said.
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LA-area card casinos, cities seek assistance as coronavirus shutdown threatens jobs - LA Daily News
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