BILL ANALYSIS Ó Bill No: SB 374 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION Senator Roderick D. Wright, Chair 2011-2012 Regular Session Bill Analysis SB 374 Author: Strickland Introduced: February 15, 2011 Hearing Date: April 26, 2011 Consultant: Paul Donahue SUBJECT : Gambling control: Key employees SUMMARY : Authorizes a key employee with a valid personal portable license to work as a key employee in any key employee position in more than one gambling establishment. Existing law : 1) The Gambling Control Act provides for the licensure of certain individuals and establishments involved in various gambling activities, and for the regulation of those activities, by the California Gambling Control Commission. 2) Requires certain people employed in the operation of a gambling enterprise, known as "key employees,"<1> to apply for and obtain a key employee license. 3) Entitles the holder of a key employee license to work in any key employee position at any gambling establishment, provided that the key employee terminates employment with one gambling establishment before commencing work for another. ------------------------- <1> Business and Professions Code § 19805 defines a "key employee" to mean any natural person employed in the operation of a gambling enterprise, in a supervisory capacity, or empowered to make discretionary decisions that regulate gambling operations, including, without limitation, pit bosses, shift bosses, credit executives, cashier operations supervisors, gambling operation managers and assistant managers, managers or supervisors of security employees, etc. SB 374 (Strickland) continued PageB 4) Requires the Gambling Control Commission to establish a program for portable personal licenses for key employees. This bill : 1) Authorizes a key employee with a valid personal portable license to work as a key employee in any key employee position in more than one gambling establishment. COMMENTS : 1) Regulation of card club gaming and employees : Prior to 1998, California's gambling industry was essentially unregulated. In 1984, the Legislature enacted the Gaming Registration Act, which required the Attorney General's office to provide uniform, minimum regulation of California's card rooms. However, the scope of the Attorney General's authority was extremely limited and funding was inadequate. In 1997 the Legislature enacted the Gambling Control Act (Stats. 1997, ch. 867), which created a comprehensive scheme for statewide regulation of legal gambling under a bifurcated system of administration involving the Division of Gambling Control<2> within the Attorney General's Office and the five-member California Gambling Control Commission appointed by the governor.<3> The commission is authorized to establish minimum regulatory standards for the gambling industry, and ensure that state gambling licenses are not issued to or held by unsuitable or unqualified individuals. The Department of Justice (DOJ) is responsible for conducting background investigations into applicants seeking key employee licenses. The DOJ assesses the integrity of the applicant, general character, reputation, ------------------------- <2> In 2007, the Attorney General redefined the Division as a Bureau. The Bureau of Gambling Control resides within the Division of Law Enforcement at the Department of Justice. <3> Both the Bureau of Gambling Control and the Gambling Control Commission are special fund agencies whose budgets are funded by fees imposed upon the regulated industry. SB 374 (Strickland) continued PageC habits, and financial and criminal history. 2) Purpose of the bill : According to the author, existing law only allows a key employee to work at one gambling establishment at a time. Thus, individuals may not work at multiple gambling sites even though the sites may have the same owner. The author wants to remove this statutory restriction to assist these employees, who may not be able to work full-time at one location. 3) Related legislation : AB 1418 (Assembly G.O. Committee, 2011) revises the definition of key employee as any natural person employed in the operation of a gambling enterprise in a supervisory capacity or empowered to make discretionary decisions with regard to gambling operations. (Pending in Assembly) SB 730 (Florez, 2007) required the California Gambling Control Commission to establish a program for portable personal licenses for key employees. (Stats. 2008, ch. 438) AB 1620 (Klehs, 2006) changed the license fee structure for card rooms licensed by the Gambling Control Commission. (Stats. 2006, ch. 721) SB 1198 (Florez, 2006) removed wagering limits from the list of items that are considered to be an "expansion of gambling" pursuant to the current moratorium on the expansion of gambling in local cities and counties. (Stats. 2006, ch. 181) AB 1753 (Assembly G.O. Committee, 2005) removed the residency requirement for key employees of California card rooms. The bill also revised penalties for violations of state gambling laws, and enacted related provisions. (Stats. 2006, ch. 546) SB 8 (Lockyer, 1997) repealed the Gaming Registration Act and enacted the Gambling Control Act, under which the Department of Justice investigates and enforces controlled gambling in the state. It also established the Gambling Control Commission to among other things issue, suspend, or revoke gambling licenses. (Stats. 1997, ch. 867) SB 374 (Strickland) continued PageD SUPPORT: None on file OPPOSE: None on file FISCAL COMMITTEE: Yes **********