Bound by its own overlooked law, the city council appeared poised Monday to rescind a June resolution granting the only local casino permission to host blackjack.
Critics of No Bust 21st Century Blackjack, including a former Gilroy casino owner, have denounced it as a pernicious "banking game" that will invite seedy, money-laundering elements to town. On the other hand, proponents such as Garlic City Casino Owner Ky Phuon and his loyal patrons view the state-sanctioned game as a way to prevent another downtown business from going under by retaining players who drive to San Jose and other cities outside the county for blackjack-type games.
"I'm just hoping the city council can work this out. It's good for the city, for a small downtown business, for everybody," Phuon said Monday. "Otherwise, my building's just going to be sitting empty like the rest of Monterey Street."
Last month Phuon won permission from the council with a 6-0 vote to host No Bust, with Mayor Al Pinheiro recusing himself because his business insures the building at the corner of Seventh and Monterey streets. With its approval, though, the council apparently violated a 15-year-old city ordinance prohibiting so-called "banking games," according to a memo written by City Administrator Tom Haglund.
Gilroy's only card room already hosts seven mostly poker-based games, approved under local law and by the state Bureau of Gambling Control. The poker-like games differ from No Bust Blackjack because No Bust requires players to act as the game's bank on a rotating basis. Players in the poker-type games, by contrast, hold their own hands and bet against each other and not the house or a bank.
In Garlic City's case, Phuon said a No Bust player would put down an amount of money to cover that round's "action" before every hand and then play through the dealer's hand - using chips and new felt he already bought. The house would never cover bets, he said.
In addition, Gilroy restricts its bet cap to three figures, compared to the four-figure wagers allowed in San Jose.
Still, the situation spells trouble for the community, said Herman Garcia, a former card shark and owner of now-closed Garcia's Club and Restaurant. Garcia called Councilman Dion Bracco's attention to the council's legal oversight last month by pointing out that the city banned No-Bust-type games in 1995 at Garcia's behest after a crime family offered him kickbacks if he would host blackjack in his club, he said.
"Some of these games you really don't want in town, and that's the reason we have that ordinance," Bracco said Monday. "The ordinance has been there, so if (Phuon) made a huge investment in this, it's because he didn't go look up the ordinance."
But Phuon and former California Department of Justice Special Agent Elijah Zuniga - who now runs his own consulting business helping folks like Phuon acquire licenses - both met with police earlier this year to discuss No Bust and said the 1995 law never came up. Police, who review alcohol and gambling permits in light of city code and state laws, approved Phuon's application before the council voted, and the city attorney also never objected.
Even if city officials overlooked local laws, Phuon has argued that the state allows games with player-dealer banking. Only 82 small card rooms remain throughout California, down from 562 in 1980, according to Rick Baldaramos, president of Sacramento-based California Gaming Consultants. State law bars the standard blackjack played in Las Vegas.
Chris Bone Chris Bone covers Gilroy or South Valley Newspapers. Reach him at 847-7109 or e-mail him at cbone@gilroydispatch.com.
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