BILL ANALYSIS Ó
Bill No: AB
241
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2011-2012 Regular Session
Bill Analysis
AB 241 Author: Hall
As Introduced: February 3, 2011
Hearing Date: June 28, 2011
Consultant: Paul Donahue
SUBJECT : Gambling moratorium
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) The Gambling Control Act (Act) generally regulates 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) Declares 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) Authorizes local governments to approve the existence
and expansion of gambling establishments.
4) 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.
5) Limits the authority of a local jurisdiction to expand
AB 241 (Hall) continued
Page 2
gambling, including the authority to increase the number of
tables that a gambling establishment may operate.
6) 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.
7) 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.
8) 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.
This bill : 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.
COMMENTS :
1) Background : There are currently two statutory
moratoriums in place that restrict the growth of card clubs
in California. One prohibits the state from issuing
licenses for new gambling establishments. The other limits
the amount by which controlled gambling can expand in local
jurisdictions to no more than 24.99%, compared to the
percentage amount that was in effect on January 1, 1999.
Most local jurisdictions have modified their gambling
ordinances to realize the maximum amount of growth
authorized by law. Both of these moratoriums expire on
January 1, 2015.
2) Rationale : The author states that California has had a
longstanding policy against expansion of gambling
establishments in the state. Since 1995, state law has
discouraged cities and counties from expanding gambling,
particularly in urban and suburban communities.
Extending the current prohibition will not impact existing
gambling facilities in California. Rather, this measure
will provide needed financial stability to local
AB 241 (Hall) continued
Page 3
governments that rely upon revenue from licensed gambling,
and it will continue the state's commitment to limit the
number of gambling facilities operated in the state.
3) Prior attempts to extend moratorium vetoed by previous
Governor : This bill is substantially similar to two
previous bills which were vetoed by Governor
Schwarzenegger: SB 213 (Florez) in 2009 and AB 2193 (Hall)
in 2010. The veto 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. 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."
4) Support : Supporters state that the card clubs in their
cities provide revenues that pay for important programs and
services, including public safety, parks, water delivery
systems, transportation, and the like. Supporters state
that the cities have millions of dollars in long-term debt
service that is financed in large part by club revenues.
Supporters claim that, if the licensing moratorium were to
expire, it would be quickly followed by expanded gaming
activities in adjacent areas and would negatively impact
the fiscal health of our community ÝHawaiian Gardens] and
many others across the state.
5) Opposition : Opponents believe that the existing
moratorium on the expansion of gambling already harms their
business, employees, the state and the local jurisdiction.
The rigid nature of the moratorium stifles innovation and
competition. By extending inflexible regulation for 5 more
years, AB 241 would prevent creation of additional jobs.
Opponents contend that this bill frustrates their ability
to compete and grow.
6) Related legislation :
AB 2193 (Hall, 2010) 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)
AB 241 (Hall) continued
Page 4
SB 213 (Florez, 2009) would have extended the moratorium on
the issuance of new gambling establishments from January 1,
2015 to January 1, 2020, among other provisions. (Vetoed)
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 enacted
numerous changes to the Gambling Control Act, including
replacing references to "gambling establishments" with
"gambling enterprises" in specific sections of the Act.
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 2007authorized
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 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 authorized
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
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
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Page 5
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. The bill extended the moratorium on
the expansion of gambling from January 1, 2007 to January
1, 2010.
SB 100 (Maddy) Chapter 387, Statutes of 1995 enacted the
original moratorium on card room expansion, prohibiting the
creation of new card rooms until January 1, 2001.
SUPPORT:
California Cities for Self Reliance Joint Powers Authority
California Gaming Association
City of Bell Gardens
City of Hawaiian Gardens
OPPOSE:
Sutter's Place, Inc. dba Bay 101
FISCAL COMMITTEE: Senate Appropriations Committee
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