The city council of Gardena, California has blinked first in its tax standoff with casino operator Larry Flynt (pictured).

It was only last week that Flynt, founder of the Hustler adult entertainment empire and owner of the Hustler-branded casino in Gardena, threatened to walk away from his purchase of the Normandie Casino if the city didn’t scrap plans to boost his gaming taxes.

On Thursday, the Los Angeles Times reported that Gardena city council held a meeting Wednesday night, during which it walked back its demands that Flynt make a monthly minimum payment of $800k instead of the traditional 12% gaming revenue tax.

The city argued that the $9.6m minimum annual payment was only $100k more than the two casinos had collectively paid the city in 2014. Flynt countered that the plan didn’t take into account the possibility of another serious economic downturn, after which a minimum tax obligation would render both properties unprofitable.