BILL ANALYSIS Ó AB 156 Page 1 Date of Hearing: May 18, 2011 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 156 (Lara) - As Amended: March 14, 2011 Policy Committee: Governmental Organization Vote: 17 - 0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill amends the Gambling Control Act by adding a "hold harmless" provision if a controlled game that had previously been found to be lawful is subsequently determined to be unlawful. In addition, in circumstances where the sale or lease of property requires the approval of the Gambling Control Commission (GCC), this bill permits the contract to have a closing date of less than 90 days if both parties agree and GCC has approved the contract. FISCAL EFFECT There are no significant costs associated with this legislation. COMMENTS 1)Rationale . According to the bill's sponsor, Commerce Club Casino, this bill will provide that if a card club is playing a controlled game approved by the Bureau of Gambling Control within the Department of Justice in the manner in which it was approved, the approval by DOJ shall be an absolute defense to any action that is brought through the criminal courts, administrative courts, or civil courts if the game being played is later ruled to be deemed unlawful. In at least one situation, a game approved by DOJ was subsequently found to be unlawful by the Court of Appeal. The Attorney General then brought administrative action against numerous card clubs for playing a game which they had approved. This bill seeks to insulate a club from criminal, civil and administrative action if a game has been approved by AB 156 Page 2 DOJ and is played in the manner in which it was approved. 2)Related Legislation . In 2010, SB 1125 (Florez), contained the same "absolute defense" language that is contained in this bill. That bill was vetoed. In his veto message, Governor Schwarzenegger wrote, "This past legislative session, my Administration sponsored several bills to address the issue of tort reform. Similar to this measure, one of these measures provided for limited immunity for businesses that engaged in conduct that was approved by a federal or state agency. However, even this modest reform contained a provision that prevented an absolute defense if the business in question intentionally misrepresented material information or defrauded the public entity that gave its approval. "I am unable to sign this bill because, unlike the measure previously mentioned, this bill does not take into account possible misconduct by a gambling establishment that may have induced the Bureau to erroneously approve a controlled game. In addition, there may be other instances where a gambling establishment may be playing a controlled game in bad faith and in violation of other provisions of existing law. Notwithstanding the fact that the Bureau may have approved such conduct, that approval alone should not constitute an absolute defense to all civil, criminal, or administration actions." Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081