Bill Text: CA SB1125 | 2009-2010 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Gambling Control Act.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2010-09-29 - In Senate. To unfinished business. (Veto) [SB1125 Detail]

Download: California-2009-SB1125-Amended.html

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BILL NUMBER: SB 1125	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  AUGUST 2, 2010
	AMENDED IN ASSEMBLY  JUNE 28, 2010
	AMENDED IN ASSEMBLY  JUNE 22, 2010
	AMENDED IN SENATE  MAY 27, 2010
	AMENDED IN SENATE  APRIL 20, 2010
	AMENDED IN SENATE  MARCH 22, 2010

INTRODUCED BY   Senator Florez

                        FEBRUARY 18, 2010

   An act to amend  Sections 19805 and   Section
 19867 of, and to add Sections 19843.5 and 19943.5 to, the
Business and Professions Code, relating to gaming.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1125, as amended, Florez. Gambling Control Act.
   (1) The Gambling Control Act provides for the licensure of certain
individuals and establishments involved in various gambling
activities, and for the regulation of those activities, by the
California Gambling Control Commission. Existing law provides for the
enforcement of those activities by the Department of Justice.
Existing law requires that an application for a license or a
determination of suitability be accompanied by a deposit that, in the
judgment of the head of the entity within the Department of Justice
that is responsible for fulfilling the obligations imposed by the
act, will be adequate to pay the anticipated costs and charges
incurred in the investigation and processing of the application.
Existing law requires the head of that entity to adopt a schedule of
costs and charges of investigation for use as guidelines in fixing
the amount of any required deposit under these provisions.
   This bill would require the department to establish an enhanced
fee schedule to provide for additional fees to be charged to
applicants who wish to have their applications processed and
background investigations conducted in an expedited manner.
   (2) Existing law permits the commission to adopt regulations
related to the operation of a gambling establishment, as provided.
   This bill would provide that jackpot funds, to which players have
made contributions, are considered trust funds that are held for the
benefit of the players and are not the property of the gambling
establishment.
   (3) Existing law requires the department to approve the play of
any controlled game, including, but not limited to, placing
restrictions and limitations on how a controlled game is played.
   This bill would provide that a gambling establishment that
conducts play of a controlled game that has been approved by the
department, but is later found to be unlawful, has an absolute
defense to any criminal, administrative, or civil action, so long as
the game was being played in the manner approved and during the time
for which it was approved. 
   (4) Existing law provides that a person is unsuitable to hold a
state gambling license if the person has any financial interest in
any business or organization that is engaged in any form of gambling,
as provided. However, existing law authorizes the commission to deem
an applicant suitable if the person has a 1% interest, or less, in a
business that conducts lawful gambling outside the state. 

   This bill would define financial interest for those purposes.

   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
   
  SECTION 1.    Section 19805 of the Business and
Professions Code is amended to read:
   19805.  As used in this chapter, the following definitions shall
apply:
   (a) "Affiliate" means a person who, directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under
common control with, a specified person.
   (b) "Applicant" means any person who has applied for, or is about
to apply for, a state gambling license, a key employee license, a
registration, a finding of suitability, a work permit, a manufacturer'
s or distributor's license, or an approval of any act or transaction
for which the approval or authorization of the commission or
department is required or permitted under this chapter.
   (c) "Banking game" or "banked game" does not include a controlled
game if the published rules of the game feature a player-dealer
position and provide that this position must be continuously and
systematically rotated amongst each of the participants during the
play of the game, ensure that the player-dealer is able to win or
lose only a fixed and limited wager during the play of the game, and
preclude the house, another entity, a player, or an observer from
maintaining or operating as a bank during the course of the game. For
purposes of this section, it is not the intent of the Legislature to
mandate acceptance of the deal by every player if the department
finds that the rules of the game render the maintenance of or
operation of a bank impossible by other means. The house shall not
occupy the player-dealer position.
   (d) "Chief" means the head of the entity within the department
that is responsible for fulfilling the obligations imposed upon the
department by this chapter.
   (e) "Commission" means the California Gambling Control Commission.

   (f) "Controlled gambling" means to deal, operate, carry on,
conduct, maintain, or expose for play any controlled game.
   (g) "Controlled game" means any controlled game, as defined by
subdivision (e) of Section 337j of the Penal Code.
   (h) "Department" means the Department of Justice.
   (i) "Director" means any director of a corporation or any person
performing similar functions with respect to any organization.
   (j) "Financial interest," as used in Sections 19858 and 19858.5,
means to operate or exercise control over the operation of a gambling
business and receive a pecuniary gain or sustain a pecuniary loss
from that gambling business. This definition only applies to a
qualified racing association or to an affiliate of a qualified racing
association.
   (k) "Finding of suitability" means a finding that a person meets
the qualification criteria described in subdivisions (a) and (b) of
Section 19857, and that the person would not be disqualified from
holding a state gambling license on any of the grounds specified in
Section 19859.
   (l) "Game" and "gambling game" means any controlled game.
   (m) "Gambling" means to deal, operate, carry on, conduct,
maintain, or expose for play any controlled game.
   (n) "Gambling enterprise" means a natural person or an entity,
whether individual, corporate, or otherwise, that conducts a gambling
operation and that by virtue thereof is required to hold a state
gambling license under this chapter.
   (o) "Gambling enterprise employee" means any natural person
employed in the operation of a gambling enterprise, including,
without limitation, dealers, floor personnel, security employees,
countroom personnel, cage personnel, collection personnel,
surveillance personnel, data-processing personnel, appropriate
maintenance personnel, waiters and waitresses, and secretaries, or
any other natural person whose employment duties require or authorize
access to restricted gambling establishment areas.
   (p) "Gambling establishment," "establishment," or "licensed
premises," except as otherwise defined in Section 19812, means one or
more rooms where any controlled gambling or activity directly
related thereto occurs.
   (q) "Gambling license" or "state gambling license" means any
license issued by the state that authorizes the person named therein
to conduct a gambling operation.
   (r) "Gambling operation" means exposing for play one or more
controlled games that are dealt, operated, carried on, conducted, or
maintained for commercial gain.
   (s) "Gross revenue" means the total of all compensation received
for conducting any controlled game, and includes interest received in
payment for credit extended by an owner licensee to a patron for
purposes of gambling, except as provided by regulation.
   (t) "Hours of operation" means the period during which a gambling
establishment is open to conduct the play of controlled games within
a 24-hour period. In determining whether there has been expansion of
gambling relating to "hours of operation," the department shall
consider the hours in the day when the local ordinance permitted the
gambling establishment to be open for business on January 1, 1996,
and compare the current ordinance and the hours during which the
gambling establishment may be open for business. The fact that the
ordinance was amended to permit gambling on a day, when gambling was
not permitted on January 1, 1996, shall not be considered in
determining whether there has been gambling in excess of that
permitted by Section 19961.
   (u) "House" means the gambling enterprise, and any owner,
shareholder, partner, key employee, or landlord thereof.
   (v) "Independent agent," except as provided by regulation, means
any person who does either of the following:
   (1) Collects debt evidenced by a credit instrument.
   (2) Contracts with an owner licensee, or an affiliate thereof, to
provide services consisting of arranging transportation or lodging
for guests at a gambling establishment.
   (w) "Initial license" means the license first issued to a person
authorizing that person to commence the activities authorized by that
license.
   (x) "Institutional investor" means any retirement fund
administered by a public agency for the exclusive benefit of federal,
state, or local public employees, any investment company registered
under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et
seq.), any collective investment trust organized by banks under Part
Nine of the Rules of the Comptroller of the Currency, any closed-end
investment trust, any chartered or licensed life insurance company or
property and casualty insurance company, any banking and other
chartered or licensed lending institution, any investment advisor
registered under the Investment Advisors Act of 1940 (15 U.S.C. Sec.
80b-1 et seq.) acting in that capacity, and other persons as the
commission may determine for reasons consistent with the policies of
this chapter.
   (y) "Key employee" means any natural person employed in the
operation of a gambling enterprise in a supervisory capacity or
empowered to make discretionary decisions that regulate gambling
operations, including, without limitation, pit bosses, shift bosses,
credit executives, cashier operations supervisors, gambling operation
managers and assistant managers, managers or supervisors of security
employees, or any other natural person designated as a key employee
by the department for reasons consistent with the policies of this
chapter.
   (z) "Key employee license" means a state license authorizing the
holder to be employed as a key employee.
   (aa) "License" means a gambling license, key employee license, or
any other license issued by the commission pursuant to this chapter
or regulations adopted pursuant to this chapter.
   (ab) "Licensed gambling establishment" means the gambling premises
encompassed by a state gambling license.
   (ac) "Limited partnership" means a partnership formed by two or
more persons having as members one or more general partners and one
or more limited partners.
   (ad) "Limited partnership interest" means the right of a general
or limited partner to any of the following:
   (1) To receive from a limited partnership any of the following:
   (A) A share of the revenue.
   (B) Any other compensation by way of income.
   (C) A return of any or all of his or her contribution to capital
of the limited partnership.
   (2) To exercise any of the rights provided under state law.
   (ae) "Owner licensee" means an owner of a gambling enterprise who
holds a state gambling license.
   (af) "Person," unless otherwise indicated, includes a natural
person, corporation, partnership, limited partnership, trust, joint
venture, association, or any other business organization.
   (ag) "Player" means a patron of a gambling establishment who
participates in a controlled game.
   (ah) "Player-dealer" and "controlled game featuring a
player-dealer position" refer to a position in a controlled game, as
defined by the approved rules for that game, in which seated player
participants are afforded the temporary opportunity to wager against
multiple players at the same table, provided that this position is
rotated amongst the other seated players in the game.
   (ai) "Publicly traded racing association" means a corporation
licensed to conduct horse racing and simulcast wagering pursuant to
Chapter 4 (commencing with Section 19400), as of July 1, 2010.
   (aj) "Qualified racing association" means a limited liability
company licensed to conduct horse racing and simulcast wagering
pursuant to Chapter 4 (commencing with Section 19400) that is a
wholly owned subsidiary of a corporation whose stock is publicly
traded.
   (ak) "Renewal license" means the license issued to the holder of
an initial license that authorizes the license to continue beyond the
expiration date of the initial license.
   (al) "Work permit" means any card, certificate, or permit issued
by the commission, or by a county, city, or city and county, whether
denominated as a work permit, registration card, or otherwise,
authorizing the holder to be employed as a gambling enterprise
employee or to serve as an independent agent. A document issued by
any governmental authority for any employment other than gambling is
not a valid work permit for the purposes of this chapter. 
   SEC. 2.   SECTION 1.   Section 19843.5
is added to the Business and Professions Code, to read:
   19843.5.  Jackpot funds held by a gambling establishment, to which
players have made contributions, following the deduction of any
administrative fee approved by the bureau, shall be considered to be
trust funds that are held for the benefit of the players. These
jackpot funds are not the property of the gambling establishment, but
are held solely for the benefit of the players.
   SEC. 3.   SEC. 2.   Section 19867 of the
Business and Professions Code is amended to read:
   19867.  (a) An application for a license or a determination of
suitability shall be accompanied by the deposit of a sum of money
that, in the judgment of the chief, will be adequate to pay the
anticipated costs and charges incurred in the investigation and
processing of the application. The chief shall adopt a schedule of
costs and charges of investigation for use as guidelines in fixing
the amount of any required deposit under this section. The schedule
shall distinguish between initial and renewal licenses with respect
to costs and charges.
   (b) During an investigation, the chief may require an applicant to
deposit any additional sums as are required by the department to pay
final costs and charges of the investigation.
   (c) Any money received from an applicant in excess of the costs
and charges incurred in the investigation or the processing of the
application shall be refunded pursuant to regulations adopted by the
department. At the conclusion of the investigation, the chief shall
provide the applicant a written, itemized accounting of the costs and
charges thereby incurred.
   (d) The department shall establish an enhanced fee schedule for
applicants who wish to have their applications processed and
background investigations conducted in an expedited manner. The
payment of those enhanced fees shall entitle the applicant to have
their applications processed in a shorter period of time than
normally would be the case.
   SEC. 4.   SEC. 3.   Section 19943.5 is
added to the Business and Professions Code, to read:
   19943.5.  If a gambling establishment conducts play of a
controlled game that has been approved by the department pursuant to
Section 19826, and the controlled game is subsequently found to be
unlawful, so long as the game was played in the manner approved, the
approval by the department shall be an absolute defense to any
criminal, administrative, or civil action that may be brought,
provided that the game is played during the time for which it was
approved by the department.