Will Cafe Arizona become minicasino?
June 13, 2008 · Updated 10:05 AM
"Café Arizona General Manager John Chong hopes to begin operating the dance club as a minicasino later this month.The proposal again places the city and club at odds. Cafe Arizona, 2012 S. 320th St., would be the fourth minicasino in the city. PJ Pockets Casino opened in June, 1998 and has provided the city the bulk of its gambling tax revenue. Players Casino opened in April, 1999, closed four months later and re-opened under new ownership in June of this year. New Sonny's Casino opened in January.Ken Kagan, the club's attorney, says the minicasino format would change the customer mix, something that should please the city. The minicasino would attract an older crowd that would probably drink less than the 20- and 30-somethings who now dance at the club, Kagan says.Instead of focusing on hip-hop music, the club's lounge, which would shrink to make room for 10 card tables and an expanded restaurant, would play disco, top 40, country and other musical styles, Chong says. The idea is to be more like an everybody nightclub for the locals.The minicasino is a totally different type of business, he said. We can't concentrate just on the young person. We have to target demographically, age 21 to 60. ... We can't dominate with one music but have everything so everyone can enjoy.But Interim City Attorney Bob Sterbank says the proposed change to a minicasino troubles the city, in part due to the cafe's history.City officials' worries about crime generated by club customers led the three-member Liquor Control Board to vote last year to not renew the club's annual liquor license. The club appealed and is operating with a temporary license. When you have an atmosphere where there are already problems, where there's noncompliance with the law based on alcohol, the potential for other illegal activity is a bad mix in our view, Sterbank said. In a five-page letter to the Washington State Gambling Commission dated Sept. 13, City Manager David Moseley writes that commission staff have acknowledged that the commission regulates minicasinos because money laundering, prostitution and drugs often follow them. In his letter, Moseley asks the commission to wait to decide on the club's minicasino application until the Liquor Control Board issues its verdict on the liquor license. That isn't likely to come until early next year. The Gambling Commission will consider whether to approve the club's application to operate as a house-banked card room at its next meeting on Oct. 12. The public will have a chance to comment. Commission officials have conducted the criminal and financial background checks necessary. Now the application awaits the blessing of the commissioners, who can approve it, reject it or hold it over for the next meeting, said Susan Arland, the commission's rules coordinator. If approved, a commission agent will do a last walk-thru of Café Arizona.Arland said she doesn't know how many applications have not received that final blessing, but estimates it's been fewer than five. If Café Arizona receives the nod, its managers could start operating as a minicasino immediately, she said. Usually they start the next day (after the approval), she said. This is kind of like their final stamp of approval until it's up and running.Chong says the decision to operate Café Arizona as a minicasino has nothing to do with the club's ongoing tensions with the city. When the club opened six years ago, it used to operate a non-banked card room, in which players pay an hourly fee to play against each other. The club had no stake in the game.When tribal casinos curtailed the club's card room profits, club managers focused on building the lounge portion of the business. Between 60 percent and 70 percent of the club's profits ultimately came from liquor sales, Chong said.About two years ago, club representatives began studying how to duplicate the successful, non-tribal minicasinos popping up all over the state, Chong said. About a third of the club's business would be a restaurant, a third would be the minicasino and a third would be the lounge. As the minicasino grows, it would expand into the lounge. This is a long time planned, he said. When we started this business, we never intended to be a nightclub.Not all the club's customers will be happy with the change in business focus and music format, Chong said. Some say they'll continue to visit the club. Others aren't sure.Some think this will work really good and talk about how they are still planning to eat in here and have a social life, he said. Some of the customers are complaining you guys are going to reduce the dance club. That's really bad.At a recent hearing on the liquor license appeal, Tacoma resident David Johnson testified that he and his wife appreciate that they can drive to a hip-hop dance club so close to home.I used to like to drive to Seattle but I got burned out on that, Johnson said.At the hearing, Kevin Turner, president of Sunrise Entertainment, an independent record company, said the club is one of the few places black people can go between Seattle and Tacoma that's on the pulse of hip-hop music.A nightclub is a very important part of our culture, Turner said.--------------Have your sayThe public can offer opinions on whether the Washington State Gambling Commission should license Cafe Arizona to operate as a minicasino. The commission will meet at 1:30 p.m. on Oct. 12 to discuss the dance club's application. The meeting will be at the Double Tree Guest Suites & Inn, 16500 Southcenter Parkway, Tukwila. For more information, call the commission at (360) 438-7654 or visit the commission's website at www.wsgc.wa.gov. Minicasinos by the numbers* The Washington State Gambling Commission has approved 63 minicasinos since the Legislature relaxed gambling laws to allow them in 1997; seven of them have since closed.* The state's 56 minicasinos grossed $51.7 million for the quarter ending March 31, 2000. They awarded $87,037 in cash and $33,293 in merchandise.* Twenty-eight minicasinos are licensed to operate in King County. For the quarter ending March 31, 2000, those minicasinos grossed $23.3 million and awarded $13,979 in cash prizes. After expenses and cash prizes, those businesses netted $5.99 million in income.* This year, the city of Federal Way has collected $526,417 in gambling taxes from cardrooms through June, according to the city's June financial report. The city collected $1.07 million in gambling taxes from cardrooms in 1999. Source: Washington State Gambling Commission and city of Federal Way "