Losing hand: Troubled Sacramento card room folds amid investigations, lawsuits

A controversial gambling hall is folding operations after regulatory investigations, suspensions and ongoing lawsuits meant it would need more than luck to be welcomed on Sacramento’s south side.

Casino Royale’s long-documented problems, coupled with an opening in prime downtown real estate, offered a spot at the table to a new player hoping to nab its license and pay homage to the city’s gilded poker halls of the past.

Originally located on Auburn Boulevard, Casino Royale owners Will Blanas and James Kouretas relocated their business in 2013 to the Red Lion Hotel on Leisure Way. The Woodlake residents who unsuccessfully protested the move didn’t have to endure their new neighbor for long.

According to a lawsuit that Blanas filed against Kouretas, the latter’s management led to an array of irregularities inside the card room. In October 2014, the California Gambling Control Commission launched surprise inspections after Casino Royale was unable pay out a customer’s $60,000 in winnings. State investigators found the card room was chronically underfunded—sometimes by as much as $325,000—and ultimately suspended its state gambling license.

Three months later, local officials followed suit by suspending Casino Royale’s city gaming license. Blanas and Kouretas had violated a city code mandating card rooms not be out of operation for more than 90 days.

Blanas filed a still-pending lawsuit against Kouretas for alleged fraud. Yet the legal showdown between partners didn’t stop Blanas from asking elected officials for a permit to reopen Casino Royale on Stockton Boulevard in April. Blanas and his attorney appeared before the city council to request that it amend gambling ordinances in a way that allowed card rooms to be nonoperational for 21 months without losing its local license. The council obliged in a 6-1 vote.

But SN&R has learned that the plan to shuffle Casino Royale to its third location in three years is no longer on the table.

According to local officials, Blanas and Kouretas have officially requested approval to sell their city gaming license to businessman Steven Ayers.

Ayers announced in September that he was eying a card room for the historic Elks Tower on 11th Street, after RailBridge Cellars & Co. closed, prompting speculation that the city might allow a fifth gaming license. Casino Royale holds one of only four card room licenses in Sacramento. But city finance director Brad Wasson told SN&R that a fifth license is not in the cards.

“It’s not a new license for the city,” Wasson said of the Elks Tower project. “There will still only be four card rooms. The Elks application is for the Casino Royale license. It has been submitted and it’s under review.”

Blanas and Kouretas couldn’t be reached for comment. Ayers told the Sacramento Bee in September he wanted to open a card room with adjoining bars that gave a nod to landmark’s century-old feel.

According to historian William Burg, the Elks Tower venue fits that image well. Burg noted the iconic building’s crimson quoins and terra-cotta flourishes were designed by Leonard Starks, the same architect behind the now-razed Alhambra Theater, the I Street post office and McClatchy High School. The Elks Tower, completed in 1926, was one of Starks’ more ornate visions.

“It was a private gentleman’s club known for its huge, elaborate ballroom on the second floor,” Burg told SN&R. “Later, in the 1940s and ‘50s, it was famous as having Sacramento’s first rooftop nightclub where you could listen to live jazz while looking out at these breathtaking views of the city after sundown.”

In 1968, the Elks Tower hosted a pioneering radio station for rock and roll, KZAP, whose disc jockeys worked under the tower’s Italian Renaissance-style cupola. Burg thinks that, while rock and roll associations to the building are strong, Jazz Age memories might be strongerer, which means utilizing the building’s vintage ambiance for a card room and bar makes thematic sense.

“Back in the early days, the Elks Tower certainly had that roaring ‘20s feel to it,” he said.

As the sale of the license pends, a separate card room experienced a different set of troubles on Sunday. Early that morning, a gunfight broke out between a Sacramento police officer and suspect in front of Capitol Casino Card Room on North 16th street, leaving an apparent bystander dead from a stray bullet.