BILL NUMBER: SB 1369 CHAPTERED
BILL TEXT
CHAPTER 748
FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2008
APPROVED BY GOVERNOR SEPTEMBER 30, 2008
PASSED THE SENATE AUGUST 29, 2008
PASSED THE ASSEMBLY AUGUST 27, 2008
AMENDED IN ASSEMBLY AUGUST 25, 2008
AMENDED IN ASSEMBLY AUGUST 20, 2008
AMENDED IN ASSEMBLY AUGUST 18, 2008
AMENDED IN SENATE APRIL 10, 2008
AMENDED IN SENATE MARCH 27, 2008
INTRODUCED BY Senators Cedillo and Battin
(Principal coauthor: Assembly Member Torrico)
(Coauthors: Senators Cogdill, Denham, Ducheny, Florez, Maldonado,
Padilla, Runner, and Wyland)
(Coauthors: Assembly Members Adams, Aghazarian, Anderson, Benoit,
Berryhill, Cook, Emmerson, Furutani, Garcia, Horton, Keene, La Malfa,
Lieu, Plescia, Silva, and Smyth)
FEBRUARY 21, 2008
An act to add Sections 19850.5 and 19850.6 to the Business and
Professions Code, and to amend Sections 326.5 and 337j of, and to add
Sections 326.3 and 326.4 to, the Penal Code, relating to bingo, and
making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 1369, Cedillo. Remote caller bingo.
Existing law permits cities, counties, and cities and counties to
allow bingo games to be conducted by specified organizations for
charitable purposes, subject to provisions of law which, if violated,
constitute a crime. Existing law defines bingo for the purposes of
these provisions as a game of chance in which prizes are awarded on
the basis of designated numbers or symbols on a card that conform to
numbers or symbols that are selected at random. Existing law
prohibits the total value of prizes awarded for any bingo game from
exceeding $250 in cash or kind, or both, for each separate game that
is held. Existing law prohibits any person from receiving or paying a
profit, wage, or salary from any bingo game, except that security
personnel employed by the organization conducting the bingo game may
be paid from bingo game revenues. A violation of this provision is a
misdemeanor.
This bill would also permit cities, counties, and cities and
counties to allow bingo games to be conducted by charitable
organizations affiliated with a school district for charitable
purposes. The bill would modify the definition of bingo to mean a
game of chance in which prizes are awarded on the basis of designated
numbers or symbols that are marked or covered by the player on a
tangible card in the player's possession and that conform to numbers
or symbols, selected at random and announced by a live caller. The
bill would prohibit the use of electronics or video displays in
connection with a bingo game, except as specified, and would also
increase the allowable value of prizes for a bingo game to $500. By
changing the definition of a crime, this bill would impose a
state-mandated local program.
This bill would also permit cities, counties, and cities and
counties to allow remote caller bingo games, defined as bingo games
in which the organization conducting the game uses audio or video
technology to link electronically any of its in-state facilities for
the purpose of the remote calling of a game from a single location to
multiple locations owned, leased, or rented by that organization or
pursuant to specified agreements. The bill would limit the operation
of remote caller bingo games to organizations that have been
incorporated or in existence for 3 years or more, and would allow the
organization conducting the game to pay administrative, managerial,
technical, financial, and security personnel reasonable fees for
services rendered from bingo game revenues, with certain limitations.
The bill would prohibit the value of prizes awarded during the
conduct of any remote caller bingo game from exceeding 37% of the
gross receipts for that game, and would require that all prize money
exceeding state and federal exemption limits on prize money be
subject to income tax reporting and withholding requirements under
applicable state and federal laws and regulations. The bill would
require remote caller bingo games to be played using traditional
paper or other tangible bingo cards and daubers and would prohibit
certain locations from participating in the games. The bill would
provide for the regulation of remote caller bingo by the California
Gambling Control Commission, as specified. The bill would make
related changes.
By changing the definition of a crime, this bill would impose a
state-mandated local program.
This bill would also provide that players who are physically
present at a bingo game may use hand-held, portable, card-minding
devices, as described, to assist in monitoring the numbers or symbols
announced in a live game. The bill would provide for the regulation
of card-minding devices by the California Gambling Control
Commission, as specified.
The bill would allow the commission to adopt emergency regulations
implementing these provisions.
The bill would establish the California Bingo Fund and would
authorize a loan from the Gambling Control Fund to the California
Bingo Fund, on or after January 1, 2009, in an amount of up to
$500,000 to fund operating, personnel, and other startup costs
incurred by the Gambling Control Commission relating to this act, as
specified.
This bill would also establish the Charity Bingo Mitigation Fund.
The bill would loan $5,000,000 from the Indian Gaming Special
Distribution Fund to the Charity Bingo Mitigation Fund to make
mitigation payments to eligible nonprofit organizations, as
specified. The bill would also appropriate $5,000,000 from that loan
to the Gambling Control Commission for the purposes of providing
mitigation payments to certain charitable organizations, as
described.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known, and may be cited, as the
California Remote Caller Bingo Act.
SEC. 2. Section 19850.5 is added to the Business and Professions
Code, to read:
19850.5. Notwithstanding Section 19850 or any other provision of
law, this chapter shall apply to both of the following:
(a) The operation, regulation, and enforcement of remote caller
bingo, as defined in paragraph (1) of subdivision (t) of Section
326.3 of the Penal Code, to the extent expressly made applicable by
Section 326.3 of the Penal Code. No requirement contained in this
chapter shall apply to remote caller bingo unless expressly made
applicable by Section 326.3 of the Penal Code.
(b) The regulation of card-minding devices as provided in
subdivision (p) of Section 326.5 of the Penal Code, to the extent
expressly made applicable by Section 326.5 of the Penal Code. No
requirement contained in this chapter shall apply to card-minding
devices unless expressly made applicable by Section 326.5 of the
Penal Code.
SEC. 3. Section 19850.6 is added to the Business and Professions
Code, to read:
19850.6. (a) In order to avoid delays in implementing the
California Remote Caller Bingo Act, including implementing remote
caller bingo, testing and certifying card-minding devices, and to
avoid disruption of fundraising efforts by nonprofit organizations,
the Legislature finds and declares that it is necessary to provide
the commission with a limited exemption from normal rulemaking
procedural requirements. The commission is directed to adopt
appropriate emergency regulations as soon as possible, the initial
regulatory action to be filed with the Office of Administrative Law
no later than May 1, 2009. The commission is further directed to
complete the normal public notice and comment process, giving careful
consideration to the comments of all interested parties. It is the
intent of the Legislature to provide the commission with full
authority and sufficient flexibility to adopt all needed regulations.
These regulations may be adopted in a series of regulatory actions.
Subsequent regulatory actions may amend or repeal earlier regulatory
actions, as necessary, to reflect program experience and concerns of
the regulated public.
(b) The commission shall adopt emergency regulations concerning
remote caller bingo and concerning card-minding devices no later than
May 1, 2009. The adoption, amendment, repeal, or readoption of a
regulation authorized by this section is deemed to address an
emergency, for purposes of Sections 11346.1 and 11349.6 of the
Government Code, and the commission is hereby exempted for this
purpose from the requirements of subdivision (b) of Section 11346.1
of the Government Code, but shall otherwise be subject to the review
and approval of the Office of Administrative Law.
(c) The emergency regulations adopted pursuant to this section
shall be effective initially for a period of 180 days from the date
the regulations are filed with the Secretary of State by the Office
of Administrative Law or upon any later date specified by the
commission in a written instrument filed with, or as part of, the
regulation. Notwithstanding subdivision (h) of Section 11346.1 of the
Government Code, the regulations may be readopted only once pursuant
to this section for a period of not more than 180 days. The
exemption created by this section applies to all emergency
regulations readopted by the commission pursuant to this section
until December 31, 2009.
SEC. 4. Section 326.3 is added to the Penal Code, to read:
326.3. (a) The Legislature finds and declares all of the
following:
(1) Nonprofit organizations provide important and essential
educational, philanthropic, and social services to the people of the
State of California.
(2) One of the great strengths of California is a vibrant
nonprofit sector.
(3) Nonprofit and philanthropic organizations touch the lives of
every Californian through service and employment.
(4) Many of these services would not be available if nonprofit
organizations did not provide them.
(5) There is a need to provide methods of fundraising to nonprofit
organizations to enable them to provide these essential services.
(6) Historically, many nonprofit organizations have used
charitable bingo as one of their key fundraising strategies to
promote the mission of the charity.
(7) Legislation is needed to provide greater revenues for
nonprofit organizations to enable them to fulfill their charitable
purposes, and especially to meet their increasing social service
obligations.
(8) Legislation is also needed to clarify that existing law
requires that all charitable bingo must be played using a tangible
card and that the only permissible electronic devices to be used by
charitable bingo players are card-minding devices.
(b) Neither the prohibition on gambling in this chapter nor in
Chapter 10 (commencing with Section 330) applies to any remote caller
bingo game that is played or conducted in a city, county, or city
and county pursuant to an ordinance enacted under Section 19 of
Article IV of the California Constitution, if the ordinance allows a
remote caller bingo game to be played or conducted only in accordance
with the requirements of this section, including the following
requirements:
(1) The game may be conducted only by the following organizations:
(A) An organization that is exempted from the payment of the bank
and corporation tax by Section 23701a, 23701b, 23701d, 23701e,
23701f, 23701g, 23701k, 23701w, or 23701 of the Revenue and Taxation
Code.
(B) A mobilehome park association.
(C) A senior citizens organization.
(D) Charitable organizations affiliated with a school district.
(2) The organization conducting the game shall have been
incorporated or in existence for three years or more.
(3) The organization conducting the game shall be licensed
pursuant to subdivision (l) of Section 326.5.
(4) The receipts of the game shall be used only for charitable
purposes. The organization conducting the game shall determine the
disbursement of the net receipts of the game.
(5) The operation of bingo may not be the primary purpose for
which the organization is organized.
(c) It is a misdemeanor for any person to receive or pay a profit,
wage, or salary from any remote caller bingo game, provided that
administrative, managerial, technical, financial, and security
personnel employed by the organization conducting the bingo game may
be paid reasonable fees for services rendered from the revenues of
bingo games, as provided in subdivision (l), except that fees paid
under those agreements shall not be determined as a percentage of
receipts or other revenues from, or be dependant on the outcome of,
the game.
(d) A violation of subdivision (c) shall be punishable by a fine
not to exceed ten thousand dollars ($10,000), which fine shall be
deposited in the general fund of the city, county, or city and county
that enacted the ordinance authorizing the remote caller bingo game.
A violation of any provision of this section, other than subdivision
(c), is a misdemeanor.
(e) The city, county, or city and county that enacted the
ordinance authorizing the remote caller bingo game, or the Attorney
General, may bring an action to enjoin a violation of this section.
(f) No minors shall be allowed to participate in any remote caller
bingo game.
(g) A remote caller bingo game shall not include any site that is
not located within this state.
(h) An organization authorized to conduct a remote caller bingo
game pursuant to subdivision (b) shall conduct the game only on
property that is owned or leased by the organization, or the use of
which is donated to the organization, provided that the operation of
bingo games may not be a primary purpose for which the organization
is organized. Nothing in this subdivision shall be construed to
require that the property that is owned or leased by, or the use of
which is donated to, the organization be used or leased exclusively
by, or donated exclusively to, that organization.
(i) (1) All remote caller bingo games shall be open to the public,
not just to the members of the authorized organization.
(2) No more than 750 players may participate in a remote caller
bingo game in a single location.
(3) If the Governor of California or the President of the United
States declares a state of emergency in response to a natural
disaster or other public catastrophe occurring in California, an
organization authorized to conduct remote caller bingo games may,
while that declaration is in effect, conduct those games pursuant to
this section with more than 750 participants in a single venue if the
net proceeds of the games, after deduction of prizes and overhead
expenses, are donated to or expended exclusively for the relief of
the victims of the disaster or catastrophe, and the organization
gives the California Gambling Control Commission at least 10 days'
written notice of the intent to conduct those games.
(4) An organization authorized to conduct remote caller bingo
games shall provide the commission with at least 30 days' advance
written notice of its intent to conduct those games. That notice
shall include all of the following:
(A) The legal name of the organization and the address of record
of the agent upon whom legal notice may be served.
(B) The locations of the caller and remote players, whether the
property is owned by the organization or donated, and if donated, by
whom.
(C) The name of the licensed caller and site manager.
(D) The names of administrative, managerial, technical, financial,
and security personnel employed.
(E) The name of the vendor and any person or entity maintaining
the equipment used to operate and transmit the game.
(F) The name of the person designated as having a fiduciary
responsibility for the game pursuant to paragraph (2) of subdivision
(j).
(G) The license numbers of all persons specified in subparagraphs
(A) to (F), inclusive, who are required to be licensed.
(H) A copy of the local ordinance for the counties in which the
game will be played. The commission shall post the ordinance on its
Internet Web site.
(j) (1) A remote caller bingo game shall be operated and staffed
only by members of the authorized organization that organized it.
Those members shall not receive a profit, wage, or salary from any
bingo game. Only the organization authorized to conduct a remote
caller bingo game shall operate that game, or participate in the
promotion, supervision, or any other phase of a remote caller bingo
game. Subject to the provisions of subdivision (l), this subdivision
shall not preclude the employment of administrative, managerial,
technical, financial, or security personnel who are not members of
the authorized organization at a location participating in the remote
caller bingo game by the organization conducting the game.
Notwithstanding any other provisions of law, exclusive or other
agreements between the authorized organization and other entities or
persons to provide services in the administration, management, or
conduct of the game shall not be considered a violation of the
prohibition against holding a legally cognizable financial interest
in the conduct of the remote caller bingo game by persons or entities
other than the charitable organization, or other entity authorized
to conduct the remote caller bingo games, provided that those persons
or entities obtain the gambling licenses, the key employee licenses,
or the work permits required by, and otherwise comply with, Chapter
5 (commencing with Section 19800) of Division 8 of the Business and
Professions Code. Fees to be paid under any such agreements shall be
reasonable and shall not be determined as a percentage of receipts or
other revenues from, or be dependent on the outcome of, the game.
(2) An organization that conducts a remote caller bingo game shall
designate a person as having fiduciary responsibility for the game.
(k) No individual, corporation, partnership, or other legal
entity, except the organization authorized to conduct or participate
in a remote caller bingo game, shall hold a legally cognizable
financial interest in the conduct of such a game.
(l) An organization authorized to conduct a remote caller bingo
game pursuant to this section shall not have overhead costs exceeding
20 percent of gross sales, except that the limitations of this
section shall not apply to one-time, nonrecurring capital
acquisitions. For purposes of this subdivision, "overhead costs"
includes, but is not limited to, amounts paid for rent and equipment
leasing and the reasonable fees authorized to be paid to
administrative, managerial, technical, financial, and security
personnel employed by the organization pursuant to subdivision (c).
(m) No person shall be allowed to participate in a remote caller
bingo game unless the person is physically present at the time and
place where the remote caller bingo game is being conducted. A person
shall be deemed to be physically present at the place where the
remote caller bingo game is being conducted if he or she is present
at any of the locations participating in the remote caller bingo game
in accordance with this section.
(n) (1) An organization shall not cosponsor a remote caller bingo
game with one or more other organizations unless one of the following
is true:
(A) All of the cosponsors are affiliated under the master charter
or articles and bylaws of a single organization.
(B) All of the cosponsors are affiliated through an organization
described in paragraph (1) of subdivision (b), and have the same
Internal Revenue Service activity code.
(2) Notwithstanding paragraph (1), a maximum of 10 unaffiliated
organizations described in paragraph (1) of subdivision (b) may enter
into an agreement to cosponsor a remote caller game, provided the
game shall have not more than 10 locations.
(3) An organization shall not conduct remote caller bingo more
than one day per week.
(4) Before sponsoring or operating any game authorized under
paragraph (1) or (2), each of the cosponsoring organizations shall
have entered into a written agreement, a copy of which shall be
provided to the commission, setting forth how the expenses and
proceeds of the game are to be allocated among the participating
organizations, the bank accounts into which all receipts are to be
deposited and from which all prizes are to be paid, and how game
records are to be maintained and subjected to annual audit.
(o) The value of prizes awarded during the conduct of any remote
caller bingo game shall not exceed 37 percent of the gross receipts
for that game. Every remote caller bingo game shall be played until a
winner is declared. Progressive prizes are prohibited. The declared
winner of a remote caller bingo game shall provide his or her
identifying information and a mailing address to the onsite manager
of the remote caller bingo game. Prizes shall be paid only by check;
no cash prizes shall be paid. The organization conducting the remote
caller bingo game may issue a check to the winner at the time of the
game, or may send a check to the declared winner by United States
Postal Service certified mail, return receipt requested. All prize
money exceeding state and federal exemption limits on prize money
shall be subject to income tax reporting and withholding requirements
under applicable state and federal laws and regulations and those
reports and withholding shall be forwarded, within 10 business days,
to the appropriate state or federal agency on behalf of the winner. A
report shall accompany the amount withheld identifying the person on
whose behalf the money is being sent. Any game interrupted by a
transmission failure, electrical outage, or act of God shall be
considered void in the location that was affected. A refund for a
canceled game or games shall be provided to the purchasers.
(p) (1) The California Gambling Control Commission shall regulate
remote caller bingo, including, but not limited to, licensure and
operation. The commission shall establish reasonable criteria
regulating, and shall require the licensure and registration of, the
following:
(A) Any person who conducts remote caller bingo games pursuant to
this section, including, but not limited to, owners, employees,
persons having fiduciary responsibility for remote caller bingo
games, site managers, and bingo callers.
(B) Any person who directly or indirectly manufactures,
distributes, supplies, vends, leases, or otherwise provide supplies,
devices, services, or other equipment designed for use in the playing
of bingo games by any nonprofit organization registered to conduct
bingo games.
(C) Beginning January 31, 2009, or a later date as may be
established by the commission, all persons described in subparagraph
(A) or (B) may submit to the commission a letter of intent to submit
an application for registration or licensure. The letter shall
clearly identify the principal applicant, all categories under which
the application will be filed, and the names of all those particular
individuals who are applying. Each charitable organization shall
provide an estimate of the frequency with which it plans to conduct
remote caller bingo operations, including the number of locations.
The letter of intent may be withdrawn or updated at any time.
(2) (A) The Department of Justice shall conduct background
investigations and conduct field enforcement as it relates to remote
caller bingo consistent with the Gambling Control Act (Chapter 5
(commencing with Section 19800) of Division 8 of the Business and
Professions Code) and as specified in regulations promulgated by the
commission.
(B) Fees to cover background investigation costs shall be paid and
accounted for in accordance with Section 19867 of the Business and
Professions Code.
(3) (A) Every application for a license or approval shall be
accompanied by a nonrefundable fee, the amount of which shall be
adopted by the commission by regulation.
(B) Fees and revenue collected pursuant to this paragraph shall be
deposited in the California Bingo Fund, which is hereby created in
the State Treasury. The funds deposited in the California Bingo Fund
shall be available, upon appropriation by the Legislature, for
expenditure by the commission and the department exclusively for the
support of the commission and department in carrying out their duties
and responsibilities under this section and Section 326.5.
(C) A loan is hereby authorized from the Gambling Control Fund to
the California Bingo Fund on or after January 1, 2009, in an amount
of up to five hundred thousand dollars ($500,000) to fund operating,
personnel, and other startup costs incurred by the commission
relating to this act. Funds from the California Bingo Fund shall be
available to the commission upon appropriation by the Legislature in
the annual Budget Act. The loan shall be subject to all of the
following conditions:
(i) The loan shall be repaid to the Gambling Control Fund as soon
as there is sufficient money in the California Bingo Fund to repay
the amount loaned, but no later than five years after the date of the
loan.
(ii) Interest on the loan shall be paid from the California Bingo
Fund at the rate accruing to moneys in the Pooled Money Investment
Account.
(iii) The terms and conditions of the loan are approved, prior to
the transfer of funds, by the Department of Finance pursuant to
appropriate fiscal standards.
The commission may assess and collect reasonable fees and deposits
as necessary to defray the costs of regulation and oversight.
(q) The administrative, managerial, technical, financial, and
security personnel employed by an organization that conducts remote
caller bingo games shall apply for, obtain, and thereafter maintain
valid work permits, as defined in Section 19805 of the Business and
Professions Code.
(r) An organization that conducts remote caller bingo games shall
retain records in connection with the remote caller bingo game for
five years.
(s) (1) All equipment used for remote caller bingo shall be
approved in advance by the California Gambling Control Commission
pursuant to regulations adopted pursuant to subdivision (r) of
Section 19841 of the Business and Professions Code.
(2) The California Gambling Control Commission shall monitor
operation of the transmission and other equipment used for remote
caller bingo, and monitor the game.
(t) (1) As used in this section, "remote caller bingo game" means
a game of bingo, as defined in subdivision (o) of Section 326.5, in
which the numbers or symbols on randomly drawn plastic balls are
announced by a natural person present at the site at which the live
game is conducted, and the organization conducting the bingo game
uses audio and video technology to link any of its in-state
facilities for the purpose of transmitting the remote calling of a
live bingo game from a single location to multiple locations owned,
leased, or rented by that organization, or as described in
subdivision (n). The audio or video technology used to link the
facilities may include cable, Internet, satellite, broadband, or
telephone technology, or any other means of electronic transmission
that ensures the secure, accurate, and simultaneous transmission of
the announcement of numbers or symbols in the game from the location
at which the game is called by a natural person to the remote
location or locations at which players may participate in the game.
The drawing of each ball bearing a number or symbol by the natural
person calling the game shall be visible to all players as the ball
is drawn, including through a simultaneous live video feed at remote
locations at which players may participate in the game.
(2) The caller in the live game must be licensed by the California
Gambling Control Commission. A game may be called by a nonlicensed
caller if the drawing of balls and calling of numbers or symbols by
that person is observed and personally supervised by a licensed
caller.
(3) Remote caller bingo games shall be played using traditional
paper or other tangible bingo cards and daubers, and shall not be
played by using electronic devices, except card-minding devices, as
described in paragraph (1) of subdivision (p) of Section 326.5.
(4) Prior to conducting a remote caller bingo game, the
organization that conducts remote caller bingo shall submit to the
commission the controls, methodology, and standards of game play,
which shall include, but not be limited to, the equipment used to
select bingo numbers and create or originate cards, control or
maintenance, distribution to participating locations, and
distribution to players. Those controls, methodologies, and standards
shall be subject to prior approval by the commission, provided that
the controls shall be deemed approved by the commission after 90 days
from the date of submission unless disapproved.
(u) A location shall not be eligible to participate in a remote
caller bingo game if bingo games are conducted at that location in
violation of Section 326.5 or any regulation adopted by the
commission pursuant to Section 19841 of the Business and Professions
Code, including, but not limited to, a location at which unlawful
electronic devices are used.
(v) (1) The vendor of the equipment used in a remote caller bingo
game shall have its books and records audited at least annually by
an independent California certified public accountant and shall
submit the results of that audit to the California Gambling Control
Commission within 120 days after the close of the vendor's fiscal
year. In addition, the California Gambling Control Commission shall
audit the books and records of the vendor at any time.
(2) An organization that conducts remote caller bingo games shall
provide copies of the records pertaining to those games to the
California Gambling Control Commission within 30 days after the end
of each calendar quarter. In addition, those records shall be audited
by an independent California certified public accountant at least
annually and copies of the audit reports shall be provided to the
California Gambling Control Commission within 120 days after the
close of the organization's fiscal year.
(3) The costs of the licensing and audits required by this section
shall be borne by the person or entity required to be licensed or
audited. The audit shall enumerate the receipts for remote caller
bingo, the prizes disbursed, the overhead costs, and the amount
retained by the nonprofit organization. The commission may audit the
books and records of an organization that conducts remote caller
bingo games at any time.
(4) If, during an audit, the commission identifies practices in
violation of this section, the license for the audited entity may be
suspended pending review and hearing before the commission for a
final determination.
(5) No audit required to be conducted by the commission shall
commence before January 1, 2010.
(w) (1) The provisions of this section are severable. If any
provision of this section or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
(2) Notwithstanding paragraph (1), if paragraph (1) or (3) of
subdivision (t), or the application of either of those provisions, is
held invalid, this entire section shall be invalid.
(x) The commission shall submit a report to the Legislature, on or
before January 1, 2012, on the fundraising effectiveness and
regulation of remote caller bingo, and other matters that are
relevant to the public interest regarding remote caller bingo.
(y) The following definitions apply for purposes of this section:
(1) "Commission" means the California Gambling Control Commission.
(2) "Person" includes a natural person, corporation, limited
liability company, partnership, trust, joint venture, association, or
any other business organization.
SEC. 5. Section 326.4 is added to the Penal Code, to read:
326.4. 326.4. (a) Consistent with the Legislature's finding that
card-minding devices, as described in subdivision (p) of Section
326.5, are the only permissible electronic devices to be used by
charity bingo players, and in an effort to ease the transition to
remote caller bingo on the part of those nonprofit organizations
that, as of July 1, 2008, used electronic devices other than
card-minding devices to conduct games in reliance on an ordinance of
a city, county, or city and county that, as of July 1, 2008,
expressly recognized the operation of electronic devices other than
card-minding devices by organizations purportedly
authorized to conduct bingo in the
city, county or city and county, there is hereby created the Charity
Bingo Mitigation Fund.
(b) The Charity Bingo Mitigation Fund shall be administered by the
Gambling Control Commission.
(c) Mitigation payments to be made by the Charity Bingo Mitigation
Fund shall not exceed five million dollars in the aggregate.
(d) (1) To allow the Charity Bingo Mitigation Fund to become
immediately operable, five million dollars ($5,000,000) shall be
loaned from the accrued interest in the Indian Gaming Special
Distribution Fund to the Charity Bingo Mitigation Fund on, or after
January 1, 2009, to make mitigation payments to eligible nonprofit
organizations. Five million dollars ($5,000,000) of this loan amount
is hereby appropriated to the Gambling Control Commission for the
purposes of providing mitigation payments to certain charitable
organizations, as described in subdivision (e). Pursuant to Section
16304 of the Government Code, after three years the unexpended
balance shall revert back to the Charity Bingo Mitigation Fund.
(2) To reimburse the Special Distribution Fund, those nonprofit
organizations that conduct a remote caller bingo game pursuant to
Section 326.3 shall pay to the Gambling Control Commission an amount
equal to 5 percent of the gross revenues of each remote caller bingo
game played until that time as the full advanced amount plus interest
on the loan at the rate accruing to moneys in the Pooled Money
Investment Account is reimbursed.
(e) (1) An organization meeting the requirements in subdivision
(a) shall be eligible to receive mitigation payments from the Charity
Bingo Mitigation Fund only if the city, county, or city and county
in which the organization is located maintained official records of
the net revenues generated for the fiscal year ending June 30, 2008,
by the organization from the use of electronic devices or the
organization maintained audited financial records for the fiscal year
ending June 30, 2008, which show the net revenues generated from the
use of electronic devices.
(2) In addition, an organization applying for mitigation payments
shall provide proof that its board of directors has adopted a
resolution and its chief executive officer has signed a statement
executed under penalty of perjury stating that, as of January 1,
2009, the organization has ceased using electronic devices other than
card-minding devices, as described in subdivision (p) of Section
326.5, as a fundraising tool.
(3) Each eligible organization may apply to the Gambling Control
Commission no later than January 31, 2009, for the mitigation
payments in the amount equal to net revenues from the fiscal year
ending June 30, 2008, by filing an application, including therewith
documents and other proof of eligibility, including any and all
financial records documenting the organization's net revenues for the
fiscal year ending June 30, 2008, as the Gambling Control Commission
may require. The Gambling Control Commission is authorized to access
and examine the financial records of charities requesting funding in
order to confirm the legitimacy of the request for funding. In the
event that the total of those requests exceeds five million dollars
($5,000,000), payments to all eligible applicants shall be reduced in
proportion to each requesting organization's reported or audited net
revenues from the operation of electronic devices.
SEC. 6. Section 326.5 of the Penal Code is amended to read:
326.5. (a) Neither the prohibition on gambling in this chapter
nor in Chapter 10 (commencing with Section 330) applies to any bingo
game that is conducted in a city, county, or city and county pursuant
to an ordinance enacted under Section 19 of Article IV of the State
Constitution, if the ordinance allows games to be conducted only in
accordance with this section and only by organizations exempted from
the payment of the bank and corporation tax by Sections 23701a,
23701b, 23701d, 23701e, 23701f, 23701g, 23701k, 23701w, and 23701 of
the Revenue and Taxation Code and by mobilehome park associations,
senior citizens organizations, and school districts; and if the
receipts of those games are used only for charitable purposes.
(b) It is a misdemeanor for any person to receive or pay a profit,
wage, or salary from any bingo game authorized by Section 19 of
Article IV of the State Constitution. Security personnel employed by
the organization conducting the bingo game may be paid from the
revenues of bingo games, as provided in subdivisions (j) and (k).
(c) A violation of subdivision (b) shall be punishable by a fine
not to exceed ten thousand dollars ($10,000), which fine is deposited
in the general fund of the city, county, or city and county that
enacted the ordinance authorizing the bingo game. A violation of any
provision of this section, other than subdivision (b), is a
misdemeanor.
(d) The city, county, or city and county that enacted the
ordinance authorizing the bingo game may bring an action to enjoin a
violation of this section.
(e) No minors shall be allowed to participate in any bingo game.
(f) An organization authorized to conduct bingo games pursuant to
subdivision (a) shall conduct a bingo game only on property owned or
leased by it, or property whose use is donated to the organization,
and which property is used by that organization for an office or for
performance of the purposes for which the organization is organized.
Nothing in this subdivision shall be construed to require that the
property owned or leased by, or whose use is donated to, the
organization be used or leased exclusively by, or donated exclusively
to, that organization.
(g) All bingo games shall be open to the public, not just to the
members of the authorized organization.
(h) A bingo game shall be operated and staffed only by members of
the authorized organization that organized it. Those members shall
not receive a profit, wage, or salary from any bingo game. Only the
organization authorized to conduct a bingo game shall operate such a
game, or participate in the promotion, supervision, or any other
phase of a bingo game. This subdivision does not preclude the
employment of security personnel who are not members of the
authorized organization at a bingo game by the organization
conducting the game.
(i) No individual, corporation, partnership, or other legal
entity, except the organization authorized to conduct a bingo game,
shall hold a financial interest in the conduct of a bingo game.
(j) With respect to organizations exempt from payment of the bank
and corporation tax by Section 23701d of the Revenue and Taxation
Code, all profits derived from a bingo game shall be kept in a
special fund or account and shall not be commingled with any other
fund or account. Those profits shall be used only for charitable
purposes.
(k) With respect to other organizations authorized to conduct
bingo games pursuant to this section, all proceeds derived from a
bingo game shall be kept in a special fund or account and shall not
be commingled with any other fund or account. Proceeds are the
receipts of bingo games conducted by organizations not within
subdivision (j). Those proceeds shall be used only for charitable
purposes, except as follows:
(1) The proceeds may be used for prizes.
(2) (A) Except as provided in subparagraph (B), a portion of the
proceeds, not to exceed 20 percent of the proceeds before the
deduction for prizes, or two thousand dollars ($2,000) per month,
whichever is less, may be used for the rental of property and for
overhead, including the purchase of bingo equipment, administrative
expenses, security equipment, and security personnel.
(B) For the purposes of bingo games conducted by the Lake Elsinore
Elks Lodge, a portion of the proceeds, not to exceed 20 percent of
the proceeds before the deduction for prizes, or three thousand
dollars ($3,000) per month, whichever is less, may be used for the
rental of property and for overhead, including the purchase of bingo
equipment, administrative expenses, security equipment, and security
personnel. Any amount of the proceeds that is additional to that
permitted under subparagraph (A), up to one thousand dollars
($1,000), shall be used for the purpose of financing the rebuilding
of the facility and the replacement of equipment that was destroyed
by fire in 2007. The exception to subparagraph (A) that is provided
by this subparagraph shall remain in effect only until the cost of
rebuilding the facility is repaid, or January 1, 2019, whichever
occurs first.
(3) The proceeds may be used to pay license fees.
(4) A city, county, or city and county that enacts an ordinance
permitting bingo games may specify in the ordinance that if the
monthly gross receipts from bingo games of an organization within
this subdivision exceed five thousand dollars ($5,000), a minimum
percentage of the proceeds shall be used only for charitable purposes
not relating to the conducting of bingo games and that the balance
shall be used for prizes, rental of property, overhead,
administrative expenses, and payment of license fees. The amount of
proceeds used for rental of property, overhead, and administrative
expenses is subject to the limitations specified in paragraph (2).
() (1) A city, county, or city and county may impose a license fee
on each organization that it authorizes to conduct bingo games. The
fee, whether for the initial license or renewal, shall not exceed
fifty dollars ($50) annually, except as provided in paragraph (2). If
an application for a license is denied, one-half of any license fee
paid shall be refunded to the organization.
(2) In lieu of the license fee permitted under paragraph (1), a
city, county, or city and county may impose a license fee of fifty
dollars ($50) paid upon application. If an application for a license
is denied, one-half of the application fee shall be refunded to the
organization. An additional fee for law enforcement and public safety
costs incurred by the city, county, or city and county that are
directly related to bingo activities may be imposed and shall be
collected monthly by the city, county, or city and county issuing the
license; however, the fee shall not exceed the actual costs incurred
in providing the service.
(m) No person shall be allowed to participate in a bingo game,
unless the person is physically present at the time and place where
the bingo game is being conducted.
(n) The total value of prizes available to be awarded during the
conduct of any bingo games shall not exceed five hundred dollars
($500) in cash or kind, or both, for each separate game which is
held.
(o) As used in this section, "bingo" means a game of chance in
which prizes are awarded on the basis of designated numbers or
symbols that are marked or covered by the player on a tangible card
in the player's possession and that conform to numbers or symbols,
selected at random and announced by a live caller. Notwithstanding
Section 330c, as used in this section, the game of bingo includes
tangible cards having numbers or symbols that are concealed and
preprinted in a manner providing for distribution of prizes.
Electronics or video displays shall not be used in connection with
the game of bingo, except in connection with the caller's drawing of
numbers or symbols and the public display of that drawing, and except
as provided in subdivision (p). The winning cards shall not be known
prior to the game by any person participating in the playing or
operation of the bingo game. All preprinted cards shall bear the
legend, "for sale or use only in a bingo game authorized under
California law and pursuant to local ordinance." Only a covered or
marked tangible card possessed by a player and presented to an
attendant may be used to claim a prize. It is the intention of the
Legislature that bingo as defined in this subdivision applies
exclusively to this section and shall not be applied in the
construction or enforcement of any other provision of law.
(p) (1) Players who are physically present at a bingo game may use
hand-held, portable card-minding devices, as described in this
subdivision, to assist in monitoring the numbers or symbols announced
by a live caller as those numbers or symbols are called in a live
game. Card-minding devices may not be used in connection with any
game where a bingo card may be sold or distributed after the start of
the ball draw for that game. A card-minding device shall do all of
the following:
(A) Be capable of storing in the memory of the device bingo faces
of tangible cards purchased by a player.
(B) Provide a means for bingo players to input manually each
individual number or symbol announced by a live caller.
(C) Compare the numbers or symbols entered by the player to the
bingo faces previously stored in the memory of the device.
(D) Identify winning bingo patterns that exist on the stored bingo
faces.
(2) A card-minding device shall perform no functions involving the
play of the game other than those described in paragraph (1).
Card-minding devices shall not do any of the following:
(A) Be capable of accepting or dispensing any coins, currency, or
other representative of value or on which value has been encoded.
(B) Be capable of monitoring any bingo card face other than the
faces of the tangible bingo card or cards purchased by the player for
that game.
(C) Display or represent the game result through any means,
including, but not limited to, video or mechanical reels or other
slot machine or casino game themes, other than highlighting the
winning numbers or symbols marked or covered on the tangible bingo
cards or giving an audio alert that the player's card has a
prize-winning pattern.
(D) Determine the outcome of any game or be physically or
electronically connected to any component that determines the outcome
of a game or to any other bingo equipment, including, but not
limited to, the ball call station, or to any other card-minding
device. No other player-operated or player-activated electronic or
electromechanical device or equipment is permitted to be used in
connection with a bingo game.
(3) (A) A card-minding device shall be approved in advance by the
commission as meeting the requirements of Section 326.5 and any
additional requirements stated in regulations adopted by the
commission. Any proposed material change to the device, including any
change to the software used by the device, shall be submitted to the
commission and approved by the commission prior to implementation.
(B) In accordance with Chapter 5 (commencing with Section 19800)
of Division 8 of the Business and Professions Code, the commission
shall establish reasonable criteria for, and require the licensure
and registration of, any person that directly or indirectly
manufacturers, distributes, supplies, vends, leases, or otherwise
provides card-minding devices or other supplies, equipment, or
services designed for use in the playing of bingo games by any
nonprofit organization registered to conduct bingo games.
(C) A person or entity that supplies or services any card-minding
device shall meet all licensing or registration requirements
established by the commission in regulations.
(4) The costs of any testing, certification, license, or
determination required by this subdivision shall be borne by the
person or entity seeking it.
(5) On and after January 1, 2010, the commission and the
Department of Justice may inspect all card-minding devices at any
time without notice, and may immediately prohibit the use of any
device that does not comply with the requirements of subdivision (r)
of Section 19841 of the Business and Professions Code. The Department
of Justice may at any time, without notice, impound any device the
use of which has been prohibited by the commission.
(6) The California Gambling Control Commission shall issue
regulations to implement the requirements of this subdivision and may
issue regulations regarding the means by which the operator of a
bingo game, as required by applicable law, may offer assistance to a
player with disabilities in order to enable that player to
participate in a bingo game, provided that the means of providing
that assistance shall not be through any electronic,
electromechanical, or other device or equipment that accepts the
insertion of any coin, currency, token, credit card, or other means
of transmitting value, and does not constitute or is not a part of a
system that constitutes a video lottery terminal, slot machine, or
devices prohibited by Chapter 10 (commencing with Section 330).
(7) The following definitions apply for purposes of this
subdivision:
(A) "Commission" means the California Gambling Control Commission.
(B) "Person" includes a natural person, corporation, limited
liability company, partnership, trust, joint venture, association, or
any other business organization.
SEC. 7. Section 337j of the Penal Code is amended to read:
337j. (a) It is unlawful for any person, as owner, lessee, or
employee, whether for hire or not, either solely or in conjunction
with others, to do any of the following without having first procured
and thereafter maintained in effect all federal, state, and local
licenses required by law:
(1) To deal, operate, carry on, conduct, maintain, or expose for
play in this state any controlled game.
(2) To receive, directly or indirectly, any compensation or reward
or any percentage or share of the revenue, for keeping, running, or
carrying on any controlled game.
(3) To manufacture, distribute, or repair any gambling equipment
within the boundaries of this state, or to receive, directly or
indirectly, any compensation or reward for the manufacture,
distribution, or repair of any gambling equipment within the
boundaries of this state.
(b) It is unlawful for any person to knowingly permit any
controlled game to be conducted, operated, dealt, or carried on in
any house or building or other premises that he or she owns or
leases, in whole or in part, if that activity is undertaken by a
person who is not licensed as required by state law, or by an
employee of that person.
(c) It is unlawful for any person to knowingly permit any gambling
equipment to be manufactured, stored, or repaired in any house or
building or other premises that the person owns or leases, in whole
or in part, if that activity is undertaken by a person who is not
licensed as required by state law, or by an employee of that person.
(d) Any person who violates, attempts to violate, or conspires to
violate this section shall be punished by imprisonment in a county
jail for not more than one year or by a fine of not more than ten
thousand dollars ($10,000), or by both imprisonment and fine. A
second offense of this section is punishable by imprisonment in a
county jail for a period of not more than one year or in the state
prison or by a fine of not more than ten thousand dollars ($10,000),
or by both imprisonment and fine.
(e) (1) As used in this section, "controlled game" means any poker
or Pai Gow game, and any other game played with cards or tiles, or
both, and approved by the Department of Justice, and any game of
chance, including any gambling device, played for currency, check,
credit, or any other thing of value that is not prohibited and made
unlawful by statute or local ordinance.
(2) As used in this section, "controlled game" does not include
any of the following:
(A) The game of bingo conducted pursuant to Section 326.3 or
326.5.
(B) Parimutuel racing on horse races regulated by the California
Horse Racing Board.
(C) Any lottery game conducted by the California State Lottery.
(D) Games played with cards in private homes or residences, in
which no person makes money for operating the game, except as a
player.
(f) This subdivision is intended to be dispositive of the law
relating to the collection of player fees in gambling establishments.
A fee may not be calculated as a fraction or percentage of wagers
made or winnings earned. The amount of fees charged for all wagers
shall be determined prior to the start of play of any hand or round.
However, the gambling establishment may waive collection of the fee
or portion of the fee in any hand or round of play after the hand or
round has begun pursuant to the published rules of the game and the
notice provided to the public. The actual collection of the fee may
occur before or after the start of play. Ample notice shall be
provided to the patrons of gambling establishments relating to the
assessment of fees. Flat fees on each wager may be assessed at
different collection rates, but no more than five collection rates
may be established per table. However, if the gambling establishment
waives its collection fee, this fee does not constitute one of the
five collection rates.
SEC. 8. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.