A new minicasino has opened in Lakewood – or, by some accounts, an old minicasino has re-opened – even as the city considers what to do with its questionable ban on new cardrooms and looks at how other cities have tried to block them from opening.

Happy Days Casino, Bar & Restaurant opened June 8 with different ownership than it had when it shut down under a dark cloud 11/2 years ago.

The new owners had to apply for a new business license from the city, as well as a new gambling license from the Washington State Gambling Commission.

As far as the state is concerned, Happy Days is a new minicasino.

But under the rules of Lakewood’s moratorium, which stretches back to 2005, new gambling businesses aren’t allowed.

City Manager Andrew Neiditz explained that officials let Happy Days reopen because it was one of six minicasinos in business at the time of the original moratorium.

“The question was, Did we want to take a hard-line action to prevent it from opening? The answer was no,” Neiditz said.

Amy Hunter, spokeswoman for the state Gambling Commission, said the agency can’t control how local governments interpret local ordinances. In the state’s eyes, however, Happy Days is a new minicasino.

“How we count it as a new business and how they count it as a separate business are definitely two separate things,” Hunter said.

Neiditz said the city’s key consideration was location.

Not only did Lakewood leaders want no cardrooms beyond the original six, but also they didn’t want any of them to move to another part of the city, Neiditz said. All are located along Interstate 5, next to busy thoroughfares.

Even though Happy Days had been out of business since January 2008 and is under new ownership, “we viewed it as one of the pre-existing businesses,” Neiditz said.

Today, Bolero Lanes is the only one of the original six not operating as a minicasino. If someone wanted to open a cardroom in the same building, Lakewood would likely allow it, Neiditz said.

Happy Days’ previous incarnation as a minicasino did not end well. Employees complained they were shorted on their pay. The owner owed the city more than $29,000 in interest and late payment penalties on gambling taxes. The two sides agreed on a settlement of about half that sum, which has never been paid.

Likewise, the previous owner didn’t pay half of a $24,000 settlement agreement with the state for failing to disclose financial statements.

David Anderson, the Tillicum resident who spearheaded a 2008 ballot measure to ban all minicasinos in Lakewood, said he isn’t surprised the city allowed Happy Days to open.

“The moratorium, in everybody’s memory bank, means nothing,” he said. “Never has, never will. The city will never wean itself off gambling tax revenue as long as they’re allowed to operate.”

MOVE ON FROM MORATORIUM?

Lakewood leaders have long sought to stop new cardroom development while allowing the now-five minicasinos in town to stay in business.

One of the main ways they have tried to hold the line on gambling is through the moratorium, which the City Council is scheduled to discuss Monday.

Officials have said it serves more as a statement than an enforceable law. On Monday, they will discuss how at least three other cities have tried to use zoning and other tactics to regulate minicasinos.

Neiditz and City Attorney Heidi Wachter told the council earlier this month that the moratorium has outlived its usefulness and it’s time for the city to move on.

But city leaders view state law as a major roadblock to doing so.

In the wake of government gambling corruption scandals in the 1960s and 1970s, legislators created the Gambling Commission.

One of the commission’s rules says that local governments must either allow all minicasinos or else ban them outright.

Governments are not supposed to show favoritism to existing cardrooms by allowing them to stay open.

It’s a Catch-22 for Lakewood officials, who have said they don’t want to become the South Sound’s gambling destination, yet risk losing some $2.8 million in annual gambling tax revenue if the existing ones closed.

Lakewood also has a backup method to limit cardroom development, restricting eating and drinking establishments of more than 10,000 square feet in size in certain neighborhoods. That almost guarantees a new cardroom would be unprofitable by today’s standards.

Over the last decade, the city has joined other local governments in lobbying the Legislature to allow zoning of gambling establishments. Each time, state lawmakers rejected it.

Lakewood, says Wachter, is “trying to assert its ability to regulate.”

The all-or-nothing nature of state law has contributed to a sometimes-heated debate in Lakewood.

Last November, supporters of an outright ban on minicasinos collected enough signatures to send an initiative to the ballot. Voters rejected it by almost a 2-to-1 margin.

PREVIOUS WORKERS RETURN

Douglas Searle’s goal isn’t to change laws. He just wants to operate an “old-fashioned” gambling business where people address each other by first name.

Searle, 51, owns the new Happy Days, which he purchased using a line of credit from his home in Sonoma County, Calif.

The previous owner, Jerry Bolser, closed in early 2008 during what some former employees call an ugly episode.

Bolser said he lost $3 million to $4 million and wouldn’t reopen because it would be throwing good money after bad, according to previous News Tribune reports.

Some employees didn’t receive paychecks, and they tried to confront Bolser the day the casino closed. Representatives of a vendor came in, took the card- shuffling machines from a dozen gambling tables, and cut its logo out of the felt that covered some tables.

Now those tables have new green covers, and they are staffed by some of the dealers from the old regime.

Searle said he has helped open casinos in Arizona, Nevada and California and has worked in the gambling business 31 years. He said he learned about Happy Days’ collapse during a convention in Las Vegas last year.

After buying the 11,000-square-foot building for $1.6 million and going through business records left by the previous owner, Searle learned of the displaced employees.

“It was heart-breaking,” he said.

The new management contacted many of them. More than half of the re-opened casino’s 100 employees worked under the previous ownership. Business has been slow so far, although Searle said he purposefully didn’t hold a large grand opening to help employees get acclimated.

Outside, passers-by on Bridgeport Way Southwest might notice a new sign. Inside, they’ll find a freshly painted cardroom and a remodeled restaurant and kitchen area.

“I’m really proud to be part of this team,” said Dusty Schuler, a 32-year-old casino manager who was previously employed at Happy Days. “I really couldn’t say that before.”

Brent Champaco: 253-597-8653

brent.champaco@thenewstribune.com

WHAT: Lakewood City Council meeting, including a discussion on how some other cities have tried to regulate gambling

WHEN: 7 p.m. Monday

WHERE: Council chambers, Lakewood City Hall, 6000 Main St. S.W.