Milpitas voters weigh fate of card room

Voters in Milpitas on Nov. 4 will decide whether to allow a large card room within the city that some officials argue would provide tax money for badly needed services but opponents warn would increase crime and tarnish the city as a mecca for gamblers.

Measure E, if approved, would enact a law allowing one licensed card room to be assessed a 10.5 percent tax on its gross revenue from gambling table fees so the city may spend the funds on public services.

Milpitas City Manager Thomas Williams, who supports Measure E, said the City Council voted to put the proposed ordinance before voters on the general election ballot.

If it passes, the city would pursue a 25-year operating deal with the Bay 101 card room, which currently has a 48-table club in San Jose with legal poker-type games, Williams said.

Bay 101’s owner, Bumb & Associates, would like to move from San Jose to Milpitas and run about 115 card tables at a 15-acre location near the Newby Island landfill off of McCarthy Boulevard near Interstate Highway 880, Williams said.

A pending bill in the California Legislature, Assembly Bill 2549, would allow Milpitas to have a licensed card room regulated by the California Gambling Control Commission, but only if a majority of the city’s voters favor one.

The bill, which has yet to pass, would also require any card room located in Milpitas to be licensed within Santa Clara County on or before Jan. 1, 2013, which includes Bay 101 and potentially two other card rooms.

However, Bay 101 is the only one to show interest in Milpitas. City officials who back the measure say Milpitas has laid off 54 city employees since 2009, suffered from a lack of money since the abolition of redevelopment agencies in 2011 and cannot fund $220 million in needed road, water, sewer and other public projects, according to Williams:

“We’re in desperate need of a revenue source.”

Williams said the municipality would get approximately $8 million per year for its general fund from the proposed gambling tax and give the city, for instance, the ability to rehire several firefighters. Bay 101 would be regulated by state gaming authorities and install “an elaborate security system” inside the business, he said.

City officials know that any entertainment business, such as the San Francisco 49ers at Levi’s Stadium in nearby Santa Clara, has the potential for attracting crime and the city is prepared, with plans to assign three police officers and an administrator to provide public safety at the card room if it opens, Williams said:

“We don’t have any concern about any increase in crime.”

Even after passage, Bay 101 would have to apply for and obtain a use permit from the City Council before operating, he said:

“The city does have the ability to revoke their permit if there are issues in the future. … They are a very heavily regulated business.”

Bay 101’s owner is bankrolling a major campaign for the measure and has donated $313,000 this year to the campaign committee Yes on E, according to contribution reports filed with the city clerk’s office.

Meanwhile, those against Measure E include the volunteer group Milpitas Voters Against E, with $5,500 in donations from nine residents, and Citizens Against Casinos, Crime and Traffic: No on E, which has $32,500 to spend from two card rooms outside of the county, the Oaks Card Club in Emeryville and the California Grand Casino in Pacheco.

Earlier this month, opponents of Measure E held a news conference in Milpitas with pastors of local churches and a mosque who complained about the social costs of gambling and the possibility of fostering addiction in local families.

Pastor Hung Pham of Grace Alliance Church, a Vietnamese community church in Milpitas, said in a statement that the card room would hurt Asian Americans in particular for whom “gambling addiction is hitting epidemic levels.”

In 2010, Milpitas had 66,790 residents, 62.2 percent of whom were Asian and about 50 percent foreign-born, according to the U.S. Census Bureau. Kenneth Reed, a spokesman for Milpitas Voters against E, said his organization believes the city made a bad deal in agreeing to only 10.5 percent of Bay 101’s gross receipts and that Milpitas should simply try to live within its own budget.