SAN JOSE -- Casino M8trix on Monday put its ongoing lawsuit against the city on hold after San Jose leaders appeared primed to grant the eight-story card room a prize it has long coveted: top-floor gambling.

The latest development could finally end the long-running legal battle between the casino and the city, which initially banned eighth-floor gaming when M8trix opened next to Mineta San Jose International Airport on Aug. 8, 2012. That's been a sticking point for card-room owners who want to wow high rollers with poker games 135 feet up against the backdrop of sweeping views of the Santa Clara Valley.

But in recent months council members have become concerned that they might be overregulating an industry that provides $18 million in annual tax revenue to the city via M8trix and the city's other card room, Bay 101 Casino. A month ago, council members asked city regulators to work with M8trix to open up its vacant eighth floor for gambling by the end of April, though a final decision hasn't yet been made.

Encouraged, the casino owners on Monday filed a request in Santa Clara County Superior Court to put their lawsuit against the city on hold for 90 days. If the city allows for top-floor gambling, among other changes council members outlined, M8trix says it will likely drop its suit -- and its demand for financial damages it claims are tied to the city delaying its opening by four months.


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"It's beyond the eighth floor. It goes to fairness," said Sean Kali-rai, a spokesman for M8trix, which wants to be treated "like very other business in San Jose."

City Attorney Rick Doyle said it's still up to the casino owners to satisfy concerns from the police and City Hall about top-floor gaming. Namely, regulators fear they could not conduct surprise inspections because it would take them so long to get up to the eighth floor. Other sections of the top floor appear to be hidden from public view, obscuring the handling of cash.

"The ball is in their court," Doyle said. "Is there a way to get there? I'm sure there is. But it really is incumbent on the card room to craft a proposal to address the initial concerns that were pointed out."

M8trix and Bay 101 are each limited to 49 tables, and voters in 2012 rejected a proposed expansion. M8trix wants to redistribute its tables between two floors -- the first, where they are now, and the eighth. The second through fourth floors currently house gaming operations and offices, the fifth and sixth have banquet space and the seventh features karaoke.

Kali-rai said the casino still reaches its capacity of 2,400 on weekends. But its main competition is for "entertainment dollars," and the casino sees high-rise gambling as a difference maker, particularly as Bay 101 plans to open a new, bigger casino across the street in a few years.

"It would just be an interesting, cool, unique venue," Kali-rai said.

Contact Mike Rosenberg at 408-920-5705. Follow him at twitter.com/RosenbergMerc.