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.




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          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.





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          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)





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           SUPPORT:   

          None on file

           OPPOSE:   

          None on file

           FISCAL COMMITTEE:   Yes



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