BILL ANALYSIS                                                                                                                                                                                                    






                                                       Bill No:  AB  
          441
          
                 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                       Senator Roderick D. Wright, Chair
                           2009-2010 Regular Session
                                 Staff Analysis


          AB 441  Author:  Hall
          As Amended:  March 4, 2010
          Hearing Date:  June 22, 2010
          Consultant:  Art Terzakis

                                     SUBJECT  
                                  Local Gaming

                                   DESCRIPTION
           
          AB 441 makes the following modification to the Gambling  
          Control Act as it relates to the limit on increases in the  
          number of gambling tables that a local jurisdiction may  
          authorize without voter approval: 

          1.  Deletes an existing provision of the Act that allows a  
            local jurisdiction to increase the number of gambling  
            tables by two, regardless of whether that increase would  
            equal or exceed 25% of the number of tables authorized on  
            January 1, 1996 and instead, authorizes a local  
            jurisdiction to amend its local gaming ordinance, without  
            voter approval, to permit an increase by two gaming  
            tables that may be operated in a gambling establishment  
            compared to the number authorized on January 1, 2010.

          2.  Makes it explicit that a local jurisdiction may  
            exercise the authority provided by this section only one  
            time, but this authority shall be in addition to any  
            authorization under any other law for a local  
            jurisdiction to increase the number of gambling tables  
            that may be operated.
                                         
                                  EXISTING LAW

           Existing law provides for the licensure and regulation of  
          various legalized gambling activities and establishments by  
          the California Gambling Control Commission (CGCC) and the  




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          enforcement of those activities by the Department of  
          Justice (DOJ).  [Gambling Control Act, Section 19801, et  
          seq. of the Business and Professions Code]

          Existing law authorizes a local jurisdiction to permit  
          controlled gambling, consistent with state law, if it has a  
          local gambling ordinance in effect, as specified.   
          [Business and Professions Code 19960]

          Existing law provides that an amendment of an ordinance  
          permitting an increase of gambling of less than 25 percent  
          when compared to that authorized on January 1, 1996 may  
          occur without voter approval.  [Business and Professions  
          Code 19961]

          Existing law authorizes a local jurisdiction to increase  
          that number referenced in Business and Professions Code  
          19961 by two tables, regardless of whether that increase  
          would equal or exceed 25% of the number of tables  
          authorized on January 1, 1996.  [Business and Professions  
          Code 19961.05]

          Existing law requires that any amendment to a local  
          jurisdiction ordinance relating to gambling establishments  
          or the Gambling Control Act is required to be submitted to  
          DOJ for review and comment before the ordinance is adopted  
          by the local jurisdiction.  [Business and Professions Code  
          19961.1]

          Existing law places a moratorium on the authorization of  
          legal gaming by a local governing body or local electors  
          and an expansion of gambling, as defined, until January 1,  
          2015.  [Business and Professions Code 19962]

                                    BACKGROUND
          
           Purpose of AB 441:   According to the author's office, this  
          measure is necessary to clarify some confusion in the  
          provisions of current law that allow for adding gaming  
          tables at card clubs. The existing moratorium prohibits  
          local jurisdictions from amending ordinances to authorize  
          additional gaming without voter approval.  However, there  
          are exceptions.  Currently, local jurisdictions may allow  
          card clubs to increase the number of tables in their  
          establishments by 24.99 percent.  If they have 12 or fewer  
          tables, they can authorize an increase of up to four  




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          tables.  These are two separate sections and some have  
          argued that a local jurisdiction is not restricted from  
          invoking both in order to allow for such expansion without  
          voter approval.

          AB 441 is intended to clarify that local jurisdictions can  
          amend the provisions of their ordinances to allow for such  
          expansion only once.  As currently drafted, AB 441 would  
          provide that any such expansion is based on the number of  
          tables authorized as of January 1, 2010, so as to allow the  
          two-table expansion on top of any expansion that has been  
          authorized already.

           Arguments in Support:   Proponents argue that this measure  
          is necessary to correct a problem created by ambiguous and  
          poorly drafted law.  Two separate sections of law provide  
          for a modest expansion in the number of tables an existing  
          card club may put into service and two conflicting legal  
          opinions on the implementation of those two sections have  
          left card clubs and local jurisdictions unsure of what they  
          can and cannot do.  Proponents claim that this measure is  
          designed to bring clarity to the provisions authorizing  
          local jurisdictions to amend their ordinances for a modest  
          expansion of existing card clubs.  Proponents contend that  
          this measure will prevent some card clubs from being  
          considered in violation of current law even though current  
          law is confusing and conflicting.

           Arguments in Opposition:   Writing in opposition, the  
          California Coalition Against Gambling Expansion (CCAGE),  
          emphasizes that, "AB 441 allows for an increase in the  
          number of allowed tables in cardrooms/clubs without the  
          voters' consent, as required under current law."   
           
                                        
                           PRIOR/RELATED LEGISLATION
           
           SB 213 (Florez) 2009-10 Session.   Among other things, would  
          have extended the moratorium on the issuance of new  
          gambling establishments from January 1, 2015 to January 1,  
          2020.  (Vetoed - Governor's message stated, "There is no  
          compelling rationale for extending the gambling moratorium  
          at this time, as a similar extension was approved just  
          three years ago.")  
           
          AB 2193 (Hall) 2009-10 Session.   Extends the moratorium on  




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          the issuance of new gambling establishments from January 1,  
          2015 to January 1, 2020.  (Pending in this Committee)
           
          AB 293 (Mendoza) Chapter 233, Statutes of 2009.   Made  
          numerous changes to the Gambling Control Act, including  
          replacing references to "gambling establishments" with  
          "gambling enterprises" in specific sections of the Act.  
          
           SB 1697 (Florez) 2007-2008 Session  .  Among other things,  
          would have allowed CGCC to consider applications to  
          activate expired gambling licenses.  (Died in Assembly G.O.  
          Committee)
           
          AB 560 (Richardson) 2007-2008 Session  .  Among other things,  
          would have allowed CGCC to consider applications to  
          activate expired gambling licenses provided that the card  
          club remains in the same city, county, or city and county  
          in which it was located.  (Died in Assembly G.O. Committee)
          
           AB 163 (Mendoza) Chapter 647, Statutes of 2008.   Authorized  
          a city or county, without voter approval, to amend an  
          ordinance to increase the number of gambling tables that  
          may be operated in a gambling establishment by 3 tables if  
          the ordinance in effect on July 1, 2007, provided for 5 to  
          8 tables, and by 4 tables if the ordinance in effect on  
          July 1, 2007, provided for 9 to 12 tables.
           
          SB 730 (Florez) Chapter 438, Statutes of 2007  .  Among other  
          things, authorized CGCC to issue licenses for a two-year  
          period and required CGCC to establish a portable key  
          employee license program.

           AB 1973 (Bermudez) Chapter 854, Statutes of 2006  .  Among  
          other things, extended the moratorium on the expansion of  
          gambling from January 1, 2010, to January 1, 2015.

           SB 1198 (Florez) Chapter 181, Statutes of 2006  .  Deleted  
          "wagering limits" from the list of items that are  
          considered expansion of gambling pursuant to the moratorium  
          on the expansion of existing gaming in a locality.

           AB 635 (Bermudez) Chapter 694, Statutes of 2005  .  Permitted  
          local governments to revise their ordinances limiting the  
          number of tables in card rooms by 24.99 percent or two  
          tables, whichever is greater, as compared with the level or  
          number operated or authorized on January 1, 1996, without  




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          voter approval.  
           
          AB 864 (Firebaugh) Chapter 872, Statutes of 2004  .   
          Permitted cities and counties to adopt ordinances  
          permitting the expansion of gambling that result in less  
          than a 25 percent increase, without voter approval.  
           
          SB 814 (Vincent) Chapter 799, Statutes of 2003  .  Authorized  
          CGCC to renew gambling licenses for a period of up to 2  
          years.  Specified that for any license issued for more than  
          one year the licensee shall continue to pay the annual  
          gambling license fee.  Also, extended the moratorium on the  
          expansion of gambling from January 1, 2007 to January 1,  
          2010.

           AB 2431 (Governmental Organization Committee) Chapter 738,  
          Statutes of 2002  .  Made numerous clarifying, technical and  
          code maintenance changes within the Gambling Control Act.

           SB 952 (Governmental Organization Committee) Chapter 945,  
          Statutes of 2001.   Made numerous changes pertaining to the  
          CGCC and the duties of the Division of Gambling Control.
           
          SB 8 (Lockyer) Chapter 867, Statutes of 1997  .  Repealed the  
          Gaming Regulation Act, and instead enacted the Gambling  
          Control Act, which provided for DOJ to investigate and  
          enforce controlled gambling in the state.  It also  
          established CGCC to regulate gambling in this state to  
          issue, suspend, or revoke gambling licenses.

           SB 100 (Maddy) Chapter 387, Statutes of 1995.   Established  
          the original moratorium on card room expansion, prohibiting  
          the creation of new card rooms until January 1, 2001.
           
          SUPPORT:   As of June 18, 2010:

          California Gaming Association
          Capital Casino Card Club
          Lucky Derby Card Club
          Lucky Lady Card Club
          Village Club

           OPPOSE:   As of June 18, 2010:

          California Coalition Against Gambling Expansion





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           FISCAL COMMITTEE:   Senate Appropriations Committee

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