No-limit politics and Sacramento's newest casino

The first rule of poker is to play the person in front of you, not the cards you’re dealt. For a small north Sacramento community that’s used to crummy hands, politics is a lot like poker.

Woodlake residents learned last Thursday that they failed to stop Casino Royale, a card room, from staking its claim inside the Red Lion Woodlake Hotel a couple miles south of their community on Leisure Lane.

The emailed memorandum from City Manager John Shirey announcing the decision proved upsetting but not entirely surprising.

“They dump everything bad in our neighborhood,” Woodlake Neighborhood Association president Bill Farrell told SN&R. “It’s the Wild West out here.”

Citing a desire to be less obstructive to small businesses, Sacramento officials made relocation of the Auburn Boulevard card room substantially easier than in the past.

The city didn’t bother telling the affected neighborhood a move was in the offing, either.

And now that the relocation is official, neighbors and opponents worry the card room represents a first step in bringing destination resort-style gambling to their redheaded stepchild of a community.

“Who’s to say [that will happen]?” Farrell said. “We just have a feeling.”

Call it a hunch instead. Casino Royale’s wild card ride to the north Sacramento neighborhood is a modern-day tutorial in what it takes to get things done at City Hall. Hint: It helps to be on friendly terms with the dealer and start early with a big chip lead.

As Clarke Rosa can attest, it wasn’t that long ago that the city made it a lot tougher for card rooms to switch locations.

A dozen years ago, when Rosa moved his Capitol Casino business from Del Paso Boulevard to its current location on N. 16th Street, he had to jump through a number of hoops, said his attorney Tracey Buck-Walsh.

Then-City Manager Bill Edgar directed Rosa to win the support of three separate neighborhood associations, get the OK from the downtown Ford dealership down the block, and organize a public hearing presided over by an administrative-law judge.

Only after all this could Rosa take his relocation bid to the city council for a final decision. The whole process took 18 months.

“In the long run, it was worth it, because he got everyone’s support” and came up with a better project, Buck-Walsh said.

So when Rosa learned that his card room rivals at Casino Royale only had to submit an application and wait for an answer, he told his attorney it wasn’t “fair.”

“He wanted them to follow the same process he had to follow when he moved his card room,” Buck-Walsh said.

Casino Royale’s new neighbors agree. “From day one, all our association [wanted was] for this to be vetted through a process,” Farrell said. “I don’t think that’s too much.”

Farrell and his neighbors would have also appreciated hearing about the casino’s move from their city council representative, Sandy Sheedy, instead of the owners of Arden Fair mall, who tipped them off in late August after rebuffing Casino Royale’s earlier advances to move nearby.

“And if they did not, it would have never come to our attention. Never,” Farrell avowed. “Our own city council person would have never notified us.”

Sheedy didn’t alert her constituents, but city code doesn’t require her to. The city doesn’t have to notify residents about card-room developments since they went from being defined as “adult-related businesses” to the less restrictive “indoor entertainment,” even though no one under 21 is permitted to enter.

In fact, all discretion for deciding card-room relocations rests with the city manager’s office. Over the years, different city managers have administered their broadly defined powers in different ways. Shirey rendered his decision after soliciting feedback from the city’s community-development, finance and police departments. The process took roughly three months, didn’t require neighborhood approval and included only one disastrous community meeting.

The 50,000-square-foot conference center inside the rechristened Red Lion has borne witness to corporate retreats, dancing newlyweds and even boxing cops. Yet nothing could prepare it for the kangaroo-court atmosphere of October 15.

The hotel’s neighbors turned out in droves to get some answers about the proposed card-room-relocation bid. Instead, as one resident said in an email to Shirey, “the meeting itself caused much of the discontent you are now seeing in Woodlake.”

Those in attendance said the city sat by while proponents of the move ran “a highly choreographed, very sophisticated lobbying event”—on enemy territory, no less—and brushed aside their concerns about traffic, crime and increased gambling operations in the future.

The sideshow found a wild card in Bob Slobe, the outspoken north Sac businessman, who at the meeting threatened to burn down the house of one of his neighbors, casino-project consultant and former City Manager Bob Thomas. (Slobe was arrested that night, but no charges were filed after Thomas declined to press them.)

Thomas’ involvement in the relocation—along with that of Casino Royale minority owner William Blanas, son of former Sheriff Lou Blanas—has fueled charges of cronyism and speculation that the card-room relocation is an opening salvo for a bigger gambit.

“This is because Bob Thomas was the city manager and the sheriff’s son is part-owner,” Farrell asserted. “It’s the power elite pushing buttons.”

Sacramento’s big-time power brokers and bold-faced names began making their play for expanded card-room operations as early as the summer of 2011.

During a city council subcommittee meeting on August 4, 2011, ex-City Manager Thomas lobbied to allow individuals to operate more than one card room at a time. Sheedy made the request that led to this proposed amendment a year earlier. The change would allow one operator to put two card rooms right next door to each other, creating a 30-table “mega card room,” in the words of Buck-Walsh, who argued against the proposal.

While existing business regulations don’t forbid adjacently located card rooms, they do prohibit them from being controlled by the same financial interests. Thomas and the gambling businesses he represented asked to relax these restrictions so that they could better compete with the bigger poker halls and Indian casinos around the region.

“Las Vegas, Reno—all the gambling communities build their casinos side by side,” Thomas’ client, Casino Royale’s controlling owner Jim Kouretas, told the committee.

It was a grand allusion to make, comparing Sacramento’s quaint poker halls to the glitzy excesses of Nevada, but the implication was plain: The city’s small-time card-room industry needed to grow up.

As suggested by Thomas, the subcommittee decided not to schedule the matter for a public planning-commission hearing and slipped it onto the city council’s consent calendar instead. In October 2011, council members narrowly defeated the change in a 5-4 procedural vote.

One year later, Thomas and Kouretas successfully arranged Casino Royale’s move to its new, larger quarters. And now casino opponents worry that the small card room might soon metastasize into a resortlike destination.

In his memo to the city council announcing his decision, Shirey said he doesn’t support “co-location of card rooms and will not support a change in law with future applications.”

Shirey also granted the neighborhood and Councilman Kevin McCarty’s request for a formal public review of card-room relocation applications—starting with the next one.

As for why such a process didn’t happen this time, city spokeswoman Linda Tucker said the current ordinance required the city to “respond to an applicant in a timely manner.”

In the meantime, the deal makers behind Casino Royale’s move are already looking to the future.

Shirey’s decision frees Casino Royale’s 15-table operation to set up shop inside a Leisure Lane hotel that has been saddled with dwindling occupancy rates, according to its owner, Kumar Sharma.

“It was just a business decision, because business is so slow,” said Sharma, who initially tried to shepherd Casino Royale to his Clarion Hotel on Arden Way.

Sharma told SN&R that he’s hoping the card room will help the struggling hotel become a “destination resort.”

That term would at least violate the spirit of the city’s card-room regulations, which say the businesses should have only local appeal.

Buck-Walsh said this conflict between local hangout and destination resort could expose Casino Royale to legal challenges. She notes that Kouretas and the owner of The Limelight on Alhambra Boulevard are old high-school buddies.

Both operations are represented by Thomas, which only fans conspiracy theories of a “mega card room” even more.

Neither Thomas nor Kouretas responded to SN&R’s requests for comment.

Sharma insists the card-room transfer isn’t a toehold into a bigger gambling footprint at the hotel.

“Even if the law changes, my lease would be only one card room. We don’t have enough room,” he said, before clarifying, “I am only the landlord.”