BILL ANALYSIS Ó
AB 241
Page 1
ASSEMBLY THIRD READING
AB 241 (Hall)
As Introduced February 3, 2011
Majority vote
GOVERNMENTAL ORGANIZATION 16-0APPROPRIATIONS 17-0
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|Ayes:|Hall, Nestande, Atkins, |Ayes:|Fuentes, Harkey, |
| |Block, Blumenfield, | |Blumenfield, Bradford, |
| |Chesbro, Cook, Valadao, | |Charles Calderon, Campos, |
| |Gatto, Hill, Bill | |Davis, Donnelly, Gatto, |
| |Berryhill, Ma, Perea, V. | |Hall, Hill, Lara, |
| |Manuel Pérez, Silva, | |Mitchell, Nielsen, Norby, |
| |Torres | |Solorio, Wagner |
| | | | |
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SUMMARY : Extends the gambling moratorium related to the
expansion of card rooms and the issuance of new card room
licenses from January 1, 2015, to January 1, 2020.
EXISTING LAW :
1)Regulates, under the Gambling Control Act (Act), the licensing
and operation of gambling establishments. The Act is
administered by the California Gambling Control Commission
(CGCC) and is enforced by the Department of Justice (DOJ)
2)Expresses the intent of the Legislature that nothing in the
Act shall be construed to preclude any city, county, or city
and county from prohibiting any gambling activity, from
imposing more stringent local controls or conditions upon
gambling than are imposed by the Act or by CGCC.
3)Addresses, under Business and Professions Code, Article 13
Section 19960, the authority of local governments to approve
the existence and expansion of gambling establishments.
Article 13 prohibits a local jurisdiction from issuing a
gambling license with respect to any gambling establishment
unless a specified measure was adopted by the voters of that
jurisdiction, or the gambling establishment is located in a
jurisdiction that, prior to January 1, 1984, expressly
authorized the operation of one or more card rooms. In
addition, Business and Professions Code Sections 19961 and
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19962 limit the authority of a local jurisdiction to expand
gambling, including the authority to increase the number of
tables that a gambling establishment may operate.
4)Imposes a moratorium on the authority of a local jurisdiction
to amend its gambling ordinance to provide for an expansion of
gambling. This moratorium remains in effect until January 1,
2015.
5)Defines an "expansion of gambling," in part, as a change that
results in an increase of 25% or more in the number of tables
a gambling establishment may operate based on the number of
tables authorized on January 1, 1996.
6)Prohibits CGCC, until January 1, 2015, from issuing a gambling
license for a gambling establishment that was not licensed to
operate on December 31, 1999, unless an application to operate
that establishment was on file with DOJ prior to September 1,
2000.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, 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 Commission
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 CGCC through various licensing fees and interest income.
The card rooms vary in size, from one 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 CGCC.
COMMENTS : 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% 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
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law. Both of these moratoriums are set expire on January 1,
2015.
Purpose of the bill : According to proponents of this bill, the
existing moratorium that is set to expire on January 1, 2015,
needs to be extended at this point for an additional five years
because communities that currently benefit from a stable card
room revenue source are unwilling to commit to long-term civic
projects and activities unless they can be assured that the
revenue stream from card rooms will continue to be
available for at least another 10 years. Proponents contend
that eliminating the moratorium altogether and allowing
additional card rooms to open would simply dilute the revenue
within existing communities.
Prior attempts to extend moratorium vetoed by previous Governor :
This bill is substantially similar to two previous bill
which were vetoed by Governor Arnold Schwarzenegger: SB 213
(Florez) of 2009 and AB 2193 (Hall) of 2010. In his veto
message the Governor stated, "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."
Prior legislation : AB 2193 (Hall) of 2009 would have extended
the gambling moratorium related to the expansion of card rooms
and the issuance of new card room licenses from January 1, 2015,
to January 1, 2020. (Vetoed by Governor)
SB 213 (Florez) of 2009 would have among other things extended
the moratorium on the issuance of new gambling establishments
from January 1, 2015, to January 1, 2020. (Vetoed by Governor)
AB 441 (Hall), Chapter 530, Statutes of 2010 modifies provisions
of the Act as it relates to the limit on increases in the number
of gambling tables that a local jurisdiction may authorize
without voter approval.
AB 293 (Mendoza), Chapter 233, Statutes of 2009 makes numerous
changes to the Act, including replacing references to "gambling
establishments" with "gambling enterprises" in specific sections
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of the Act.
AB 163 (Mendoza), Chapter 647, Statutes of 2008 authorizes 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 three tables if the ordinance in
effect on July 1, 2007, provided for five to eight tables, and
by four tables if the ordinance in effect on July 1, 2007,
provided for nine to 12 tables.
SB 730 (Florez), Chapter 438, Statutes of 2007 among other
things, authorizes 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, extends the moratorium on the expansion of gambling from
January 1, 2010, to January 1, 2015.
SB 1198 (Florez), Chapter 181, Statutes of 2006 deletes
"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 permits local
governments to revise their ordinances limiting the number of
tables in card rooms by 24.99% or two tables, whichever is
greater, as compared with the level or number operated or
authorized on January 1, 1996, without voter approval.
AB 864 (Firebaugh), Chapter 872, Statutes of 2004 permits cities
and counties to adopt ordinances permitting the expansion of
gambling that result in less than a 25% increase, without voter
approval.
SB 814 (Vincent), Chapter 799, Statutes of 2003 authorizes CGCC
to renew gambling licenses for a period of up to two years.
Specifies that for any license issued for more than one year the
licensee shall continue to pay the annual gambling license fee.
Also, extends the moratorium on the expansion of gambling from
January 1, 2007, to January 1, 2010.
SB 100 (Maddy), Chapter 387, Statutes of 1995 establishes the
original moratorium on card room expansion and prohibits the
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creation of new card rooms until January 1, 2001.
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531
FN: 0000958