Stakes Are High in Cypress Card Club Vote : Gambling: Residents will vote in June whether to allow the county's first such venue. Promoter says it will provide $12 million a year to city coffers, but some believe it's a sucker's bet in many ways.

By LYNDA NATALI

Feb. 28, 1993 12 AM PT

SPECIAL TO THE TIMES

CYPRESS — Lloyd Arnold says he wants to give the city of Cypress $12 million a year. Residents just have to let him open a card club.

In the first test of Orange County’s tolerance of large-scale gambling, voters will go to the polls in June to decide whether to allow a card club at the Los Alamitos Race Course.

Although gambling has been allowed at the race course in Cypress for the past 40 years--pumping millions of dollars into the city budget to help pay for police salaries, rodent control and other city services--this is different.

With the ink barely dry on the City Council’s approval to put the “Cypress Club” proposal before voters June 8, the community is gearing up for a massive showdown.

In some neighborhoods, meetings are underway as residents plot strategies to keep the card club out of Cypress. In other areas, residents are readying to blanket the community with a gambling education program, arguing that an informed voter is their best ally.

Also expected to enter the fray are competing club operators who, when challenged in other cities, came out fighting with their checkbooks. Card club operators already have approached Garden Grove officials to sell them on allowing a gambling house--to beat the potential new competition in Cypress.

These are not going to be easy days in Cypress. Even before the issue hit the ballot, a mysterious flyer landed in the mailbox of many Cypress residents.

“If you are concerned about property values, crime, churches and children and the family neighborhood--come to the City Council meeting,” reads the pamphlet from the Cypress Voters League, an organization with no traceable members.

Race course owner Arnold stood before the City Council in January holding the solution.

“We are not here to do something to the city that would hurt it,” he said, while hundreds jammed into the chambers with signs and angry looks. “One of the major benefits we can provide is the money.”

Next came the list--more police officers, a city Fire Department, a 500-seat theater, a giant banquet hall and 2,500 jobs.

Each promise hit a direct nerve. Arnold vowed to bring in more police at a time when the city is battling with the Police Department over staffing. He promised to give the city enough money to afford its own Fire Department, months after it was revealed that one of its county-run stations was having trouble getting to its calls. For years, local arts groups have been trying to muster support for a concert venue.

The heart of his proposal is the projected $12 million he has promised every year for city coffers. That money will come from a percentage of the club’s income, to be determined by the City Council later. The offer comes at a time when the city is facing a potential $1-million shortfall in its $17-million budget. It’s a figure that some city officials can’t ignore.

“I think that people have to be real honest here; there will be card clubs in Orange County,” said Mayor Gail H. Kerry. “Where and who is going to get the money? Look at the Cerritos Auto Center; everyone wanted that but couldn’t have it.”

But if anyone can persuade residents in this town of 45,000 that gambling is good, Arnold is the man, according to some city watchers.

Arnold, a rancher from Illinois, came to California in 1975 and operated harness racing in Sacramento for several years. In 1989, he, along with four other businessmen, bought the Los Alamitos Race Course and its surrounding property. Arnold, Chris Bartis and Dr. Edward Allred are proposing the card club.

Four years ago, Arnold arrived in town and brought peace to the community ripped apart by a plan to shut down its only golf course and replace it with a business park. Seen as the great facilitator, he bought the Los Alamitos Race Course from floundering Hollywood Park and negotiated a deal with the city that saved the golf course and gave him a business park, albeit a smaller one.

Now, Arnold has a “great shot” at pulling off the gambling club, too, said Councilman Walter K. Bowman, who says he is morally opposed to the idea. “He has been very straightforward at what he has done so far. . . . There is no doubt about it, he solved a lot of our problems when he bought the race course.”

The proposed Cypress Club would be a 24-hour hall resembling those in Los Angeles County, most notably the Bicycle Club in Bell Gardens and the Commerce Club in the City of Commerce. The $30-million club would be built at the race course, although the exact site has not been determined, Arnold said.

The club would not be like Las Vegas casinos, where patrons sit at slot machines and bet against the house. Card club players bet against each other, and the clubs make money by charging seat-rental fees, a fee for each hand played, or both.

A huge chunk of the Los Angeles clubs’ business comes from the Asian community, and the most popular game is Pai-gow, an ancient Chinese game played with domino-like tiles. With the county’s large Asian population, the proposed Cypress club could save would-be gamblers here a trip north.

But George Hardie, owner and operator of the Bicycle Club, said there aren’t enough players to fill more clubs.

“I don’t know why those people think they are going to open the doors and there is going to be some new players,” Hardie said. “There is just so much to go around.”

Hardie, who is known for his aggressive campaigns against potential competition, helped finance a losing fight in November to defeat a card club proposal at Hollywood Park in Inglewood. He said he has not been involved in Cypress, and was not behind the flyer. He didn’t rule out the possibility that he may be bringing his war chest to the aid of residents opposed to the club.

“I haven’t been involved in Cypress yet,” Hardie said. “I don’t know what I will do, but I don’t have any plans right now.”

Arnold is bracing for opposition from the other clubs, but plans to run a low-key campaign, he says. His main goal will be to educate the people about what a card club is. He hopes once people know, they won’t be afraid of it.

He plans to hold community meetings in the next few months and has already sent out a flyer to all residents explaining his proposal. The letter ends with an invitation to call him personally with any questions. So far, about 100 residents have taken him up on his offer and called, according to his staff.

Working in his favor, some say, is Arnold’s point-man, Jack Swank. Although not officially on his payroll, he is a gambling man who would like nothing better than a card club in his hometown. The former promoter for Evel Knievel lead a grass-roots campaign that fought off Hollywood Park’s plans to build on the golf course, before Arnold bought the site.

“I think one of his strong points is Jack Swank,” said Councilwoman Joyce C. Nicholson. “He knows people and he knows how to talk to them and how to convince them. He has a very good following.”

Arnold said his club would be clean, smoke-free and safe. Using statistics presented by the local police chief comparing crime statistics at local stores and the Commerce Club, he argues there is more crime at the local supermarket than at a card club.

“I think the report had to eliminate anybody’s fears about crime at the card club,” Arnold said. “It is safer to go to a card club than Target.”

Cypress Police Chief Wicker presented statistics on criminal activity on locations within Cypress and compared them to criminal activity at the Commerce Club. He reported that there was more total crime in local stores.

But many residents aren’t buying it. They fear crime, drugs and prostitution will accompany the gamblers.

In 1990, the federal government seized the Bicycle Club after a jury determined that $12 million of its $22 million in construction funds came from Florida drug dealers. As a result, the federal government owns a substantial share in the Bicycle Club.

“This is a residential community,” said Jean McKinzie, who is helping to organize a citizens’ campaign against the card club. “This is a community that doesn’t want the influence of a card club. We have a peaceful environment and we want it to remain so.”

The residents’ group, which is holding its first meeting Tuesday, hopes to educate residents about the problems in its effort to defeat Arnold. They plan to launch a grass-roots effort, including public rallies and going door-to-door, organizers said.

One question that they are already grappling with is where will their money come from. Many of the organizers said they will not accept money from competing card clubs.

“The City Council needs more money, so they think it is legitimate to get it through gambling,” said resident Denise Sage, who is helping to start the anti-card club campaign. “If we take another card club’s money, we would be doing the same thing.”

The group said they will rely on the hard work of its members, many coming from local churches. During the recent council meetings, hundreds came out to voice their concerns. They are hoping to bank on that support. Already, the phones are starting to ring, organizers said.

“I can’t stress enough that Cypress is a very nice residential community,” McKinzie said. “This isn’t going to be easy for us. When we first heard about it, we thought nothing to it, there would never by a card club in Cypress. But now we realize there is a lot that we have to do.”