With Larry Flynt involved, controversy is inevitable. But Gardena likes its chances with his casino investment

Adult entertainment mogul Larry Flynt is no stranger to controversy, and less than eight months after taking over a struggling Gardena casino, his new enterprise has already sparked its share of strife.

But the working-class South Bay city is betting that Flynt’s gamble on the card club will pay off with an economic resurgence that will preserve hundreds of jobs and generate extra tax revenue for Gardena’s coffers.

On Saturday, Flynt plans to unveil the nearly $5 million in renovations he has made at the former Normandie Casino, which he renamed the Lucky Lady Casino and crowned with a neon sign depicting a scantily clad woman, swinging a bare leg.

In addition, Flynt has upgraded the 50,000-square-foot casino with a new paint job, fresh carpeting, chandeliers, furniture and flat-screen television sets. The casino added a new smoking area and remodeled its restaurant.

But Flynt, 74, said he isn’t done.

Architects are already drawing up plans for the possible addition of retail and office space on the 12.5 acres surrounding the casino, according to Flynt, who says he is willing to spend up to $60 million on the property over the next few years.

“It will do good for Gardena,” Flynt said in an interview from his ornate office on the 10th floor of a Beverly Hills building.

Gardena officials hope he is right. After disputes over his contributions to the city and the decency of his casino sign, Flynt and the city have reached an agreement that both sides anticipate will generate profits for Flynt and economic renewal for the city.

“I personally believe this will be a shot in the arm for the street,” Gardena City Manager Mitchell Lansdell said of West Rosecrans Avenue, where the Lucky Lady Casino is surrounded by strip malls, an aging apartment complex and a welding supply warehouse.

The casino is licensed to operate 60 tables and employs about 400 people.

Since the renovation work began in August, business has picked up by at least 10%, said Thomas Candy, Flynt’s executive vice president of gaming operations.

“It was very dull and drab before,” Candy said.

Players agree that the renovations have brightened the atmosphere in the casino.

“This is 100% better,” said Sue Laurie, a retiree who has been playing poker at the former Normandie Casino for decades. “Before, it was all dark.”

But like many of Flynt’s business endeavors, this one has been punctuated by conflict.

When the owners of the rival Normandie Casino pleaded guilty last year to shielding several high rollers from federal reporting requirements and violating the Bank Secrecy Act, Flynt bought the casino for an undisclosed amount.

Since 2000, Flynt has operated the Hustler Casino, which sits less than a mile from the Normandie Casino on West Redondo Beach Boulevard. The Hustler and Normandie casinos combined generate nearly 20% of Gardena’s general fund revenue, which is why the stakes were so high for both sides in the ensuing negotiations.

Once Flynt took over the Normandie, the city of Gardena proposed that Flynt give the city $800,000 a month from his two casinos.

Flynt rejected the deal and briefly closed the Normandie Casino, threatening to sell its gaming license. The city backed off on its proposal and, instead, the two sides reached an agreement to have Flynt pay 12% of his monthly gross gaming revenue for both casinos.

In addition, if the gross gaming revenue for the Lucky Lady exceeds $2 million in any month, the city must reimburse Flynt a portion of the 12% contribution in the form of loans and grants to pay for casino renovation work.

“They were trying to shake me down,” Flynt grumbled.

Lansdell shrugged off Flynt’s complaint, saying “I don’t want to go there.”

Shortly after the deal was approved, the Gardena City Council complained about the casino’s neon sign, saying it was offensive. Flynt refused to remove or redesign the sign, saying courts have determined that nudity is not obscene. The council backed down and allowed the sign.

“Who were they to tell me what kind of sign I can put up,” Flynt said.

In August, a St. Louis gaming company called Isle of Capri Casinos sued Flynt, claiming it owned the rights to the name “Lucky Lady Casino.” The company operates four casinos in Pennsylvania, Colorado, Mississippi and Missouri called “Lady Luck Casinos.”

A federal judge in Los Angeles denied a preliminary injunction in November that would have kept Flynt from using the name. The judge directed the case to be settled in private mediation, according to court records. A spokeswoman from Isle of Capri declined to comment on the litigation.

Although Flynt now owns two casinos just blocks apart, Flynt said he isn’t worried that either operation will steal customers from the other. There is enough demand in Southern California to keep both thriving, he said, noting that his Hustler Casino generated strong profits even during the recession.

“Gambling tends to be an industry that does well even when the economy is bad,” he said.

The key to drawing gamblers, he said, is offering good food.

To that end, the newly renovated restaurant at the Lucky Lady has a seven-page menu that includes New York Steak, shrimp chow mein and fish tacos — many items designed to be served to players at the card tables.

“If you can’t make it in the casino business, you can’t make it as a businessman,” Flynt opined.

For now, Flynt said, he doesn’t plan to buy more casinos. He said he wants to keep his investments diversified among his adult magazines, retail shops and casinos.

“I like,” he said, “to pick my spots.”

hugo.martin@latimes.com

To read more about the travel and tourism industries, follow @hugomartin on Twitter.

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