San Jose Card Clubs Expansion, Measure K (June 2010)

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A San Jose More Gaming Tables Allowed at City's Card Clubs ballot proposition was on the June 8, 2010 ballot for voters who live in the City of San Jose in Santa Clara County. The measure was approved.[1]

Two card clubs, the Garden City Casino and Bay 101, were authorized to operate in San Jose. The approval of Measure K meant that both card clubs were allowed to add nine gambling tables to the 40 they had at the time of the vote on Measure K. They were also allowed by Measure K to increase their $200 wager cap and limit of 21 approved games.[2] Measure K also increased the city's tax rate on proceeds from the card tables from 13% to 15%.[3] The added tables, and the increased tax rate, increased tax revenues flowing into San Jose's general operations fund by an estimated $3.6 to $5.25 million per year. The two card clubs had previously generated about $13 million in tax revenues a year for the city.[1]

6 of San Jose's 11 city council members voted to put the measure on the June ballot.

A San Jose city audit found that there were about 50 to 60 arrests a year at the two clubs, with charges including alcohol, drugs, theft and forgery. In 1987, Garden City's former owners were indicted on tax-fraud charges and in 2000, dozens of club employees were indicted on felony charges including loan sharking, drugs and extortion.[4] At the time of the vote on Measure K, throughout California, there are a total of 89 card clubs.[5]

Councilwoman Nancy Pyle, who favored a "yes" vote, said that although the card clubs had been "a source of problems," at the same time, "they're 'a nice source of income.'"[4]

Election results

Measure K
ResultVotesPercentage
Approveda Yes 109,197 76.04%
No34,41223.96%
These final, certified results are from the Santa Clara County elections office.==Text of measure==

Text of measure

The question on the ballot:

Shall an ordinance be adopted to increase the Cardroom Tax rate on gross revenues from 13% to 15%, increase the number of cardroom tables by 18, permit any card game authorized under State law consistent with City regulations and betting limits as authorized under State law, all subject to City audit and oversight?[6]

Support

Front doors of Bay 101, one of the two "card clubs" in San Jose

Mayor Chuck Reed was one of six San Jose City Council members who voted to put the measure on the June ballot. He said, "If you compare the revenues coming out of the two card rooms - $13 million a year, plus or minus depending on the economy, that’s more than all of our auto dealers combined."

Cindy Chavez, who ran against Reed for mayor, also supported the ballot proposition. She now heads the South Bay AFL-CIO Labor Council.[3]

Bay 101, one of the two card clubs that would be impacted by Measure K, had organized a campaign committee that was expected to spend money on direct mail and television advertising in favor of a "yes" vote.[4]

Assistant Police Chief Fred Abram and San Jose Silicon Valley Chamber of Commerce President Pat Dando supported Measure K.[4]

Opposition

San Jose Police Officers Association President George Beattie said that caution was in order because even if the city received more in tax revenue from the additional 18 gambling tables, crime in the city was also likely to increase at a time when the police force was already understaffed.[1] The police group voted to officially oppose Measure K in April, saying, "Expanding the operations of these card rooms could jeopardize the safety of our streets, neighborhoods and police officers. We believe that such a move has the potential to increase crime in our city at a time when our already understaffed police force may be reduced even further."[4]

San Jose City Council members who voted against putting the ballot measure on the June ballot were Sam Liccardo, Ash Kalra, Nora Campos, Kansen Chu and Madison Nguyen.[3]

The Values Advocacy Council, a socially conservative organization in San Jose, recommended to its members that they vote against the proposal.[3]

Budget woes

The City of San Jose faced a budget gap of $116 million in 2010, which a local newspaper characterized as ."..a huge deficit that will require deep employee pay cuts or layoffs."[3] The additional funds generated by Measure K represent about 5% of San Jose's annual budget deficit (as of 2010).

A "taste of Vegas"

Logo of Garden City Casinos

In May, the San Jose City Council approved the relocation of the Garden City Casino from Saratoga Avenue to North First Street's tech corridor, about a mile from Bay 101.

Eric Swallow, the co-owner of the Garden City Casino, said he wanted his casino to become an entertainment mecca: "Even traditional casinos are trying to become more multidimensional. It's more than just for people who want to gamble. They want to hang out, stay over night, have some good entertainment."[5]

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