Sarantos family to transfer 500 Club ownership to K & M Casinos

The Clovis city council approved the transfer of the 500 Club Casino (Shaw & Willow) from the Sarantos family to K & M Casinos Inc. (Daniel Leon/Clovis Roundup)

The historic 500 Club Casino in Clovis is currently in the process of being sold by longtime owner Louis Sarantos to K & M Casinos Inc., which already operates seven casinos across the state.

The first step in the ownership transfer was taken Monday evening, when Clovis officials voted 4-1 to approve the change of ownership.

Louis Sarantos, the present owner of 500 Club Casino, delivers a statement at the Jan. 8 Clovis city council meeting. (Ron Sundquist/Clovis Roundup)

The Sarantos family, which has operated gambling in Clovis since 1953, first at the historic Old Town site at 500 Clovis Ave., now simply a bar and grill establishment, and now, since 2012, at the expanded cardroom at Willow and Shaw Avenue, said they have full faith in new owners Mike LeBlanc and Kevin Barclay to continue the club’s traditions and maintain a spirit of giving back to the local community.

“I’ve been a big supporter for the city and for the rodeo association and [K & M Casinos] is going to accept those responsibilities and I think they will be very good for the city,” Louis Sarantos said. “I’ve known Mike for the last six or seven years and Kevin grew up a mile away from my home on Academy [Avenue]. I’ve known him since he was a youngster and the work we’ve done together has always been positive. I think they will be very positive for the city and I think very highly of them.”

LeBlanc said he and his business partner fully understand the historical significance of the casino and its place as a supporter of the Clovis community, and he said they plan to continue the Sarantos legacy as well as revamp the casino somewhat to drum up more business.

Michael LeBlanc and K & M Casinos Inc. received approval from the City of Clovis to purchase the 500 Club Casino on Willow and Shaw avenues. (Ron Sundquist/Clovis Roundup)

“We think the 500 Club has been an important part of the community and plan on continuing that as far as working with charities. We definitely think there are some improvements we can make to hopefully make it more profitable,” LeBlanc said.

When asked by councilmember Drew Bessinger whether or not K & M Casinos will consider introducing online gaming and horse race betting to the club should those forms of gambling become legal for such establishments, LeBlanc said that those – as well as other sports betting – are always on the table legislatively and would certainly be considered for future expansion on business should the gambling commission permit them down the line. LeBlanc also said there is early stage legislation to expand tables as well, which he is keeping an eye on.

Churning new business for the 500 Club is especially critical at this time as business has seen a decrease in recent months since the Department of Justice closed the 18-table cardroom in August 2017 for three weeks.

Sarantos said the DOJ allowed him to reopen the casino without recommending any changes, so he is operating just as before without issue. However, as a result of the closure, business was not only lost for those three weeks but is down overall. For this reason, Sarantos and LeBlanc urged the council not to require a 10 percent licensing fee, which mirrors the percentage Club One pays the City of Fresno, while the new owners get the casino back on its feet.

“If you take into consideration what we made the first couple years compared to what we’ve made this past year, I would think that you would be generous enough to allow them to get on their feet,” Sarantos said. “Having 10 percent expense right off the top from Day 1 is a big expense.”

“The 500 Club profits have depreciated every year [since 2012] so the increase staff is suggesting is pretty hefty, nearly 50 percent [of the profit] and we are buying a depressed asset because things did dip after the closure and business has been down,” LeBlanc added.

Assistant City Manager John Holt said staff recommended the 10 percent of gross licensing fee on the club when the Sarantos family first moved to the new location, but negotiated with the family at the time to gradually increase up to that amount every year while they established the business at that location. Currently, the Sarantos are paying 9 percent on the gross after the first $2.5 million made each fiscal year, meaning they are paying the city 6.25 percent of their gross currently. The intent, Holt said, was also to ramp up that amount to the full 10 percent, which is why it was recommended with the new owners.

At 10 percent, Holt said the city would be making an additional $250,000 a year from the 500 Club for an estimated total between $600,000 and $650,000 of revenue each year from the club. Currently, the city gets between $400,000 and $500,000 from the 500 Club on an annual basis.

Council members expressed mixed feelings on what would be fair to charge the new owners.

Mayor Bob Whalen was the solo no vote on the transfer itself and said he just isn’t comfortable with having a casino of this scope in Clovis whatsoever and he certainly doesn’t think the city should cut any vice-based business any slack.

“My opinion is it was kind of a novelty in an Old Town like Clovis, which has a western theme to have a cardroom where people could play poker. I get that as a novelty it fit with our theme, but then when the expansion idea came in it was a lot different casino operating in Clovis,” Whalen said. “The city of Clovis to a large degree historically has tried to really define itself and when the city was selected through data as the best place in California to raise a family, we found our niche … I think having gambling within our community beyond the novelty of the 500 Club when it was in Old Town Clovis is something that is inconsistent with the theme for the city of Clovis as being a great place to raise a family.

“This is nothing against the Sarantos family, I’m thankful for all the contributions that they’ve made. But, I think at this point, if someone was to come before this council and say we’re going to drop a cardroom in your gateway to the city of Clovis off of the freeway along Shaw Avenue coming from Fresno, which is a highly trafficked area, we would probably say no.”

Councilmember Jose Flores agreed with Whalen that gambling is a vice, but commented that the council “cannot legislate morality.” Although he himself does not gamble, he does know people who consider it a fun recreational activity and while it can lead some to addiction issues, for the most part that does not occur and if “someone wants to gamble, they will.”

While Flores felt morality could not be legislated from the dais, he did feel that the business should be highly taxed at the 10 percent licensing fee recommended by city staff.

From a business perspective, however, the three remaining councilmembers Lynne Ashbeck, Vong Mouanoutoua and Drew Bessinger, agreed to compromise with the new owners by allowing them to continue to pay only 6.25 percent their first year as owners, which would then increase to 8 percent the second year and to the full 10 percent in Year 3.

“I think we need to make it to where we do take business away from Club One and since we do have a casino, we need to make it the best one so that everyone is coming off the freeway to play here in Clovis,” Mouanoutoua said. “I think that is what happened in the beginning, everyone was coming here, but they stopped and we can’t impede these new owners from being able to compete against Club One in downtown Fresno.”

Mouanoutoua said he hopes the council’s generosity to the new owners will translate to them continuing the club’s charitable activities in the community.

“My encouragement is that the 500 Club will continue to give back and do more within the city of Clovis in supporting the Marjaree Mason Center and our senior center,” Mouanoutoua said. “I’ve only been recently involved when they had a tournament that raised money for the new Hmong minor scholarship of $15,000, which created an endowed scholarship – the first one for Fresno State’s Hmong minor. I think if you keep doing that, there are many nonprofits within the community who would see that this is a way to use the casino to generate funds.”

The council’s vote is just the first step in the transfer process. The California Gambling Control Commission will also need to approve the transfer of the license in the coming months before the sale can be finalized.

Valerie Shelton :