BILL ANALYSIS AB 1753 Page 1 Date of Hearing: April 21, 2010 ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION Joe Coto, Chair AB 1753 (Hall) - As Introduced: April 14, 2010 SUBJECT : Slot machines. SUMMARY : Increases the misdemeanor penalties on non-casino businesses who possess and uses a "slot machine or device," as specified. Specifically, this bill : 1)Increases the misdemeanor penalties to provide that a first offense would be punishable by a fine of not less than $500 nor more than $1,000, or by imprisonment in a county jail not exceeding six months, or by both that fine and imprisonment. 2)Increases the misdemeanor penalties to provide that a second offense would be punishable by a fine of not less than $1,000 nor more than $10,000, or by imprisonment in a county jail not exceeding six months, or by both that fine and imprisonment. 3)Increases the misdemeanor penalties to provide that a third or subsequent offense would be punishable by a fine of not less than $10,000 nor more than $25,000, or by imprisonment in a county jail not exceeding one year, or by both that fine and imprisonment. 4)Provides if the offense involves more than one machine or more than one location, an additional fine of not less than $1,000 nor more than $5,000 would be imposed per machine and per location. 5)Makes relating technical changes. EXISTING LAW : 1)Prohibits the possession and use of a "slot machine or device" as defined under Sections 330a, 330b, and 330.1 of the California Penal Code. 2)Prohibits certain activities and transactions pertaining to "slot machines or devices" as long as they do not apply to a manufacturer's business activities that are conducted in accordance with the terms of a license issued by a tribal AB 1753 Page 2 gaming agency pursuant to the tribal-state gaming compacts entered into in accordance with the federal Indian Gaming Regulatory Act (18 U.S.C. Sec. 1166 to 1168, inclusive, and 25 U.S.C. Sec. 2701 et seq.). 3)Provides varying definitions of "slot machine or device." 4)Stipulates that individuals who violate provisions of existing state law is guilty of a misdemeanor and punishable by a fine not less than $100 nor more than $1,000, or by imprisonment in the county jail not exceeding six months, or by both such fine and imprisonment. 5)Defines, under federal law, a "gambling machine" (15 U.S.C. Sec. 1171 (a) (1)) as- a) Any so-called "slot machine" or any other machine or mechanical device an essential part of which is a drum or reel with insignia thereon, and i) which when operated may deliver, as the result of the application of an element of chance, any money or property, or ii) by the operation of which a person may become entitled to receive, as the result of the application of an element of chance, any money or property; or b) Any other machine or mechanical device (including, but not limited to, roulette wheels and similar devices) designed and manufactured primarily for use in connection with gambling, and i) which when operated may deliver, as the result of the application of an element of chance, any money or property, or ii) by the operation of which a person may become entitled to receive, as the result of the application of an element of chance, any money or property; or c) Any subassembly or essential part intended to be used in connection with any such machine or mechanical device, but which is not attached to any such machine or mechanical device as a constituent part. AB 1753 Page 3 FISCAL EFFECT : Unknown. COMMENTS : This bill revises the fines for the possession of unlicensed slot machines or similar devices. According to the author, "The revision of these fines will deter the proliferation of illegal slot machines at non-tribal gaming facilities and provide law enforcement agencies with an important tool to reaffirm the appropriate use and location of slot machines in California." Background . "Skill based" slot machines look and act nearly identical to licensed slot machine devices found at tribal gaming facilities. These mechanical devices are being placed in bars, restaurants, liquor stores and tobacco shops in various places throughout the state. These mechanical devices are sometimes disguised as video arcade games, which, allows these illegal machines to be placed in public view without being easily detected. Business owners who operate these machines can switch the machine from arcade game to video slot machine through the use of a remote control. Individuals who sell these mechanical devices, and business owners who have these machines in their establishments, claim that California's gaming laws do not apply to them because their slots are games of "skill" and not games of "chance." As a result, revenues received from these devices are unregulated and go unreported and untaxed. According to the Los Angeles Sheriff's Department, this bill's sponsor, law enforcement has lacked the tools necessary to deter and halt these illegal "skill based" slot devices from operation at non-tribal gaming facilities by organized groups. Author and sponsor assert that this bill's intent to increase penalties and fines will better deter people from engaging in this activity and help prevent the victimization of lower income individuals. REGISTERED SUPPORT / OPPOSITION : Support Los Angeles County Sheriff's Department California State Sheriffs' Association AB 1753 Page 4 Opposition None on file Analysis Prepared by : Rod Brewer / G. O. / (916) 319-2531