Casino M8trix in the Crosshairs

Casino M8trix promised to bring a Las Vegas-fashioned corporate environment to San Jose gaming. The card club, formerly known as Garden City, rebranded nearly two years ago in a swank new high-rise near the airport. The goal was to get away from the Goodfellas image of corruption under former owner Nick Dalis and family, who were caught buying political favors and skimming several million off the top. In hindsight, Dalis’ scheming looks downright cute compared to the Goldman Sachs-level fraud alleged against current cardroom owners Eric Swallow and Peter and Jeanine Lunardi. State Attorney General Kamala Harris and Gambling Control chief Wayne Quint Jr. accuse M8trix owners of orchestrating a $119 million shell game (start on page 4) to avoid paying city taxes and contributing to a local nonprofit’s gambling addiction programs. Rather than mounting a full-scale PR campaign to combat the allegations through consultants Sean Kali-Rai and Rich de la Rosa, the casino has buttoned up under the advice of superstar attorney Allen Ruby. The state gaming commission is scheduled to meet May 29 to decide whether to renew M8trix’s annual permit beyond the end of this month. Roughly 800 jobs stand in limbo. But while most city officials are in a holding pattern to see if the allegations are true, an upcoming election has one mayoral candidate springing into action. Councilman Sam Liccardo authored a memo to Wednesday's Rules Committee calling for an internal investigation while also demanding the casino shut down in 30 days if it doesn’t pay restitution to the city and Asian Americans for Community Involvement. That didn’t sit well with Liccardo’s colleague Pete Constant, whose council district was once home to Garden City. Constant says Liccardo’s plan is a “wholly inappropriate” political ploy, designed to help him score points in the mayor's race. “If we don’t trust our police chief and city manager to investigate and determine what’s appropriate, we have a much bigger problem,” Constant says. Swallow and the Lunardis could also have bigger problems than simply paying back money, or even shutting down for that matter. If the allegations are true, serious criminal charges would likely follow. City officials won’t be off the hook either. M8trix’s opening was delayed four months in 2012 as former police chief Chris Moore, police gaming admin Richard Teng and recently appointed City Manager Ed Shikada tried to sift through the casino’s complex financial structure. Quint’s allegations suggest the city botched its investigation or simply gave up trying to figure it out.

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2 Comments

  1. That’s why cities shouldn’t rely on tax revenues from casinos and pot clubs. There’s too much money, and local politicians can’t say no to that money.

  2. “The card club, formerly known as Garden City, rebranded nearly two years ago in a swank new high-rise near the airport. ” Has the definition of swank changed? From the outside, the building looks like an apartment block in Cold War East Berlin. Inside, it’s cheesy at best. Swank it is not.

    San Jose has a crack City Auditor. Give her and her team the charge to audit M8Trix’s books quarterly, all paid for by M8trix.There could even be a dedicated team, like Harvey Rose for the County, all paid for 100%, including full burden, by M8trix, as a further condition of maintaining its city license to operate. Constant vigilence and oversight are the keys regarding any gaming operation.

    While they’re at at, what demonstrable benefit has been obtained from the $125k/year given to Asian Americans for Community Involvement? Do they have any metrics to allow outsiders to see what good, if any, they have done/like how many gambleaholics they have “cured”? Sounds like a black hole for money to me, unless AACI can demonstrate definable “gains”.