BILL ANALYSIS Ó
AB 241
Page 1
Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 241 (Hall) - As Introduced: February 3, 2011
Policy Committee: Governmental
Organization Vote: 16 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill extends a moratorium on the issuance of new gambling
licenses for card rooms from January 1, 2015 to January 1, 2020.
FISCAL EFFECT
As this bill prohibits the expansion of existing card rooms and
the issuance of licenses for new card rooms, it results in
forgone revenues for the Gambling Control Fund from 2014-15
through 2019-20.
Currently, there are approximately 90 licensed card rooms in the
state. Annually, those clubs generate $13.7 million in revenue
for the Gambling Control Commission (GCC) through various
licensing fees and interest income. The card rooms vary in size,
from 1 table to 243 poker tables. Assuming an average size card
room of 20 tables, each additional card room would generate in
excess of $150,000 in revenue for the Gambling Control
Commission Fund.
A portion of that revenue would be offset by additional workload
costs for the GCC.
COMMENTS
1)Rationale . According to supporters of this legislation, the
existing moratorium that is not set to expire for another four
years needs to be extended at this point for an additional
five years because communities that benefit from card room
revenues currently are unwilling to commit to long term local
public building projects unless they can be assured that the
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revenue will continue to be available for at least another 10
years. Supporters contend that doing away with the moratorium
and allowing additional card rooms to open would dilute the
revenue within existing communities.
2)Gambling in California . The Gambling Control Act of 1998 (GCA)
was established to provide a comprehensive scheme for
statewide regulation of legal gambling. Among other things,
GCA provided that no new gambling establishment may be opened
in a city, county, or city and county, in which a gambling
establishment was not operating on and before January 1, 1984,
except upon the affirmative vote of the electors of that local
jurisdiction. Local jurisdictions may adopt a gambling
ordinance governing items such as the hours of operation of
gambling at those premises, patron security, location of
premises, wagering limits and the number of tables permitted
in those premises and in the jurisdiction as a whole.
3)California Card Clubs . There are currently two statutory
moratoriums that restrict the growth of card clubs in
California. One moratorium prohibits the state from issuing
licenses for new gambling establishments. The other limits
the amount that controlled gambling can expand in local
jurisdictions to no more than 24.99% (tables) compared to the
amount that was authorized on January 1, 1999. Most local
jurisdictions have modified their gambling ordinances to
realize the maximum amount of growth authorized by law. There
are currently 91 licensed card clubs in the state.
The California Constitution prohibits house-banked games in
gambling establishments in California, except in Indian
casinos on Indian lands. As such, players in California card
clubs do not wager bets against the gambling establishment
(the house), rather placing wagers against other players.
Gambling establishments are authorized to assess player fees
based on the amount of each patron's wager.
4)Similar Legislation . AB 2193 (Hall), 2010, was vetoed by the
governor. In his veto message, Governor Schwarzenegger wrote,
"There is no compelling rationale for extending the gambling
moratorium at this time, as a similar extension was approved
just three years ago. The gambling moratorium under existing
law does not expire until 2015, which gives the Legislature
ample time to evaluate whether the existing moratorium should
be extended."
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SB 213 (Florez), 2009, was vetoed. In his veto message the
governor stated the same reason he gave for vetoing AB 2193,
above.
5)Related legislation . SB 40 (Correa), pending in the Senate
Governmental Organization committee, would legalize internet
poker and would limit the licensing authority for internet
poker to California's gaming tribes and those card rooms that
are licensed as of January 1, 2011.
SB 45 (Wright), also pending in the Senate Governmental
Organization committee, would legalize internet poker but
would not limit the licenses to the existing card room
licensees and gaming tribes.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081