Bill Text: CA SB819 | 2021-2022 | Regular Session | Chaptered

California Senate Bill 819 (Prior Session Legislation)

Bill Title: Gambling Control Act.

Spectrum: Committee Bill

Status: (Passed) 2021-10-05 - Chaptered by Secretary of State. Chapter 553, Statutes of 2021. [SB819 Detail]

Download: California-2021-SB819-Chaptered.html

Senate Bill No. 819

CHAPTER 553

An act to amend Sections 19805, 19876, 19931, and 19984 of, and to add Section 19876.5 to, the Business and Professions Code, relating to gambling.

[ Approved by Governor October 05, 2021. Filed with Secretary of State October 05, 2021. ]

LEGISLATIVE COUNSEL'S DIGEST

SB 819, Committee on Governmental Organization. Gambling Control Act.

Existing law, the Gambling Control Act, provides for the licensure and regulation of various legalized gambling activities and establishments by the California Gambling Control Commission and the investigation and enforcement of those activities and establishments by the Department of Justice. Existing law requires specified employees of a gambling enterprise to apply for and obtain from the commission a valid key employee license or a work permit.

Existing law defines “gambling enterprise employee” for purposes of the act to mean a natural person employed in the operation of a gambling enterprise, including, among others, dealers, floor personnel, security employees, and waiters and waitresses, or any other natural person whose employment duties require or authorize access to restricted gambling establishment areas.

This bill would exclude from the definition of “gambling enterprise employee” a natural person employed solely to serve or prepare food or beverages if those duties are performed only in areas of the establishment in which gambling is not authorized.

Existing law defines “key employee” for purposes of the act to mean 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, among others, pit bosses, shift bosses, and gambling operation managers and assistant managers, or any other natural person designated as a key employee by the department for reasons consistent with the act.

This bill would exclude from the definition of “key employee” a natural person who is employed solely to supervise employees whose duties are solely to serve or prepare food or beverages if the supervisor and the employees perform their duties only in areas of the establishment in which gambling is not authorized.

Existing law requires a license issued by the commission to be renewed biennially, and provides a process for license renewal. Existing law authorizes the commission to extend a license held by an owner licensee for up to 180 days if the commission is unable to act on the application for renewal before its expiration.

This bill instead would authorize the commission to extend a license held by any applicant for up to 180 days if the commission is unable to act on the application for renewal before its expiration. The bill would enact similar provisions for work permits and findings of suitability, allowing for extension by the commission beyond the expiration date.

Existing law authorizes the department to issue any emergency orders against an owner licensee of a gambling establishment, or any person involved in a transaction requiring prior approval, that the department deems reasonably necessary for the immediate preservation of the public peace, health, safety, or general welfare. Existing law requires the emergency order to remain effective until further order of the commission or final disposition of a proceeding, as specified.

This bill would require the further order of the commission to occur at a meeting.

Existing law allows a gambling enterprise to contract with a third party for the purpose of providing proposition player services, subject to specified conditions. Existing law requires those employed by a third-party provider of proposition player services, including owners, supervisors, observers, and players, to wear a badge that clearly identifies them as proposition players whenever they are present within a gambling establishment.

This bill would instead require a person who owns or is employed by a third-party provider of proposition player services, including, but not limited to, an owner, supervisor, observer, or player, to wear a badge that clearly identifies them as providing proposition player services, in a location that allows for public view, at all times while in a gambling establishment for which their third-party proposition player services company has a current contract.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES 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 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 a person who has applied 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 a director of a corporation or a person performing similar functions with respect to any organization.

(j) “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.

(k) “Game” and “gambling game” means a controlled game.

(l) “Gambling” means to deal, operate, carry on, conduct, maintain, or expose for play a controlled game.

(m) “Gambling enterprise” means a natural person or an entity, whether individual, corporate, or otherwise, that conducts a gambling operation and that by virtue is required to hold a state gambling license under this chapter.

(n) “Gambling enterprise employee” means a 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. “Gambling enterprise employee” does not include a natural person employed solely to serve or prepare food or beverages if those duties are performed only in areas of the establishment in which gambling is not authorized.

(o) “Gambling establishment,” “establishment,” or “licensed premises,” except as otherwise defined in Section 19812, means one or more rooms where a controlled gambling or activity directly related to controlled gambling occurs.

(p) “Gambling license” or “state gambling license” means a license issued by the state that authorizes the person named therein to conduct a gambling operation.

(q) “Gambling operation” means exposing for play one or more controlled games that are dealt, operated, carried on, conducted, or maintained for commercial gain.

(r) “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.

(s) “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.

(t) “House” means the gambling enterprise, and any owner, shareholder, partner, key employee, or landlord thereof.

(u) “Independent agent,” except as provided by regulation, means a 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.

(v) “Initial license” means the license first issued to a person authorizing that person to commence the activities authorized by that license.

(w) “Institutional investor” means a retirement fund administered by a public agency for the exclusive benefit of federal, state, or local public employees, an investment company registered under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.), a collective investment trust organized by banks under Part 9 of the Rules of the Comptroller of the Currency, a closed-end investment trust, a chartered or licensed life insurance company or property and casualty insurance company, a banking and other chartered or licensed lending institution, an investment adviser registered under the Investment Advisers 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.

(x) “Key employee” means a 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. “Key employee” does not include a natural person who is employed solely to supervise employees whose duties are solely to serve or prepare food or beverages if the supervisor and the employees perform their duties only in areas of the establishment in which gambling is not authorized.

(y) “Key employee license” means a state license authorizing the holder to be employed as a key employee.

(z) “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.

(aa) “Licensed gambling establishment” means the gambling premises encompassed by a state gambling license.

(ab) “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.

(ac) “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.

(2) To exercise any of the rights provided under state law.

(ad) “Owner licensee” means an owner of a gambling enterprise who holds a state gambling license.

(ae) “Person,” unless otherwise indicated, includes a natural person, corporation, partnership, limited partnership, trust, joint venture, association, or any other business organization.

(af) “Player” means a patron of a gambling establishment who participates in a controlled game.

(ag) “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.

(ah) “Publicly traded racing association” means a corporation licensed to conduct horse racing and simulcast wagering pursuant to Chapter 4 (commencing with Section 19400) whose stock is publicly traded.

(ai) “Qualified racing association” means a corporation 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.

(aj) “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.

(ak) “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 19876 of the Business and Professions Code is amended to read:

19876.

(a) Subject to the power of the commission to deny, revoke, suspend, condition, or limit any license, as provided in this chapter, a license shall be renewed biennially.

(b) An application for renewal of a gambling license shall be filed by the owner licensee or key employee with the department no later than 120 calendar days prior to the expiration of the current license. The commission shall act upon any application for renewal prior to the date of expiration of the current license. Upon renewal of any owner license, the commission shall issue an appropriate renewal certificate or validating device or sticker.

(c) Notwithstanding the provisions of subdivision (b), if an applicant has submitted an application for renewal prior to the original expiration date of the current license and the commission is unable to act on the application prior to the expiration date, the commission may extend the current license for up to 180 days.

(d) Unless the commission determines otherwise, renewal of an owner’s gambling license shall be deemed to effectuate the renewal of every other gambling license endorsed thereon.

(e) In addition to the penalties provided by law, any owner licensee who deals, operates, carries on, conducts, maintains, or exposes for play any gambling game after the expiration date of the gambling license is liable to the state for all license fees and penalties that would have been due upon renewal.

(f) If an owner licensee fails to renew the gambling license as provided in this chapter, the commission may order the immediate closure of the premises and a cessation of all gambling activity therein until the license is renewed.

(g) If an owner licensee applicant submits an application for renewal of the gambling license after the deadline described in subdivision (b) but before the original expiration date of the license, the commission may assess reasonable delinquency fees not to exceed three times the usual application fee.

SEC. 3.

Section 19876.5 is added to the Business and Professions Code, to read:

19876.5.

If an applicant has submitted an application for renewal prior to the original expiration date of a work permit or finding of suitability and the commission is unable to act on the application prior to the expiration date, the commission may extend the current work permit or finding of suitability for up to 180 days. The commission may adopt regulations to provide for the extension of other approvals.

SEC. 4.

Section 19931 of the Business and Professions Code is amended to read:

19931.

(a) The department may issue any emergency orders against an owner licensee, or any person involved in a transaction requiring prior approval, that the department deems reasonably necessary for the immediate preservation of the public peace, health, safety, or general welfare.

(b) The emergency order shall set forth the grounds upon which it is based, including a statement of facts constituting the alleged emergency necessitating the action.

(c) The emergency order is effective immediately upon issuance and service upon the owner licensee or any agent of the licensee registered with the department for receipt of service, or, in cases involving prior approval, upon issuance and service upon the person or entity involved, or upon an agent of that person or entity authorized to accept service of process in this state. The emergency order may suspend, limit, condition, or take other action in relation to the license of one or more persons in an operation without affecting other individual licensees, registrants, or the licensed gambling establishment. The emergency order remains effective until further order of the commission at a meeting or final disposition of a proceeding conducted pursuant to subdivision (d).

(d) Within two calendar days after issuance of an emergency order, the department shall file an accusation with the commission against the person or entity involved. Thereafter, the person or entity against whom the emergency order has been issued and served is entitled to a hearing that, if so requested, shall commence within 10 business days of the date of the request if a gambling operation is closed by the order, and in all other cases, within 30 calendar days of the date of the request. On application of the department, and for good cause shown, a court may extend the time within which a hearing is required to be commenced, upon those terms and conditions that the court deems equitable.

SEC. 5.

Section 19984 of the Business and Professions Code is amended to read:

19984.

Notwithstanding any other law, a licensed gambling enterprise may contract with a third party for the purpose of providing proposition player services at a gambling establishment, subject to the following conditions:

(a) Any agreement, contract, or arrangement between a gambling enterprise and a third-party provider of proposition player services shall be approved in advance by the department, and in no event shall a gambling enterprise or the house have any interest, whether direct or indirect, in funds wagered, lost, or won.

(b) (1) The commission shall establish reasonable criteria for, and require the licensure and registration of, any person or entity that provides proposition player services at gambling establishments pursuant to this section, including owners, supervisors, and players. The commission may impose licensing requirements, disclosures, approvals, conditions, or limitations as it deems necessary to protect the integrity of controlled gambling in this state, and may assess, and the department may collect, reasonable fees and deposits as necessary to defray the costs of providing this regulation and oversight.

(2) A person who owns or is employed by a third-party provider of proposition player services, including, but not limited to, an owner, supervisor, observer, or player, shall wear a badge that clearly identifies them as providing proposition player services, in a location that allows for public view, at all times while in a gambling establishment for which their third-party proposition player services company has a current contract.

(c) The department, pursuant to regulations of the commission, is empowered to perform background checks, financial audits, and other investigatory services as needed to assist the commission in regulating third-party providers of proposition player services, and may assess and collect reasonable fees and deposits as necessary to defray the costs of providing this regulation and oversight. The department may adopt emergency regulations in order to implement this subdivision.

(d) No agreement or contract between a licensed gambling enterprise and a third party concerning the provision of proposition player services shall be invalidated or prohibited by the department pursuant to this section until the commission establishes criteria for, and makes determinations regarding the licensure or registration of, the provision of these services pursuant to subdivision (b).