BILL ANALYSIS �
Bill No: AB
820
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2013-2014 Regular Session
Staff Analysis
AB 820 Author: Gomez
As Amended: June 17, 2013
Hearing Date: June 25, 2013
Consultant: Paul Donahue
SUBJECT
Gambling Control Act: card player fees
DESCRIPTION
Changes the statutory rules governing card player fees.
Specifically, this bill:
1)Repeals provisions of existing law authorizing a gambling
establishment to waive the collection of fees.
2)Repeals statutes authorizing the assessment of flat fees
for each wager.
3)Specifies that, in games that feature a player-dealer
position, the player-dealer shall be required to pay a
fee to the gambling establishment for each hand or round
of play.
4)Requires each player to pay a fee from his or her own
funds to the gambling establishment for each wager made
in every hand or round of play.
5)Requires all player fees to be approved by the Department
of Justice (DOJ), but would prohibit DOJ from approving a
fee schedule for any player-dealer game unless the fee
paid by each player on each wager is not less than 1/3 of
the amount of the fee paid by the player-dealer in each
hand or round of play.
AB 820 (Gomez) continued
PageB
6)Repeals provisions of existing law specifying that if a
gambling establishment waives its collection fee, this
fee does not constitute one of the five authorized
collection rates.
EXISTING LAW
1)Regulates, as part of a comprehensive regulatory
framework for gambling activities, the collection of card
player fees in gambling establishments (card rooms), as
follows:<1>
a) Prohibits a player fee from being calculated as a
fraction or percentage of wagers made or winnings
earned.
b) Requires the amount of fees to be charged for all
wagers to be determined prior to the start of play of
any hand or round.
c) Authorizes a gambling establishment to waive
collection of the fee, or portion of the fee, in any
hand or round of play, after the hand or round has
begun, pursuant to the published rules of the game and
the notice provided to the public.
d) Authorizes flat fees on each wager to be assessed
at different collection rates, but specifies that no
more than 5 collection rates may be established per
table.
e) Declares that the statute establishing the
regulatory framework is intended to be dispositive of
the law relating to the collection of player fees in
gambling establishments.
BACKGROUND
In general : As noted above, existing law regulates the
collection of player fees in gambling establishments, and
authorizes a gambling establishment to waive collection of
the fee or portion of the fee in any hand or round of play
after the hand or round has begun pursuant to the published
rules of the game and the notice provided to the public. It
should be noted that the statute governing player fees
-------------------------
<1> See, subdivision (f), Penal Code � 337j
AB 820 (Gomez) continued
PageC
contains a provision stating that "[t]his subdivision is
intended to be dispositive of the law relating to the
collection of player fees in gambling establishments."<2>
Possible amendments to AB 820 : Proponents and sponsors of
this bill have reportedly drafted amendments to the bill
that would limit the authorization in existing law to
freely waive collection of player fees, rather than repeal
the authorization to waive fees altogether, which is the
current version of the bill.
Because these amendments have not been submitted to the
Committee offices, the proposed language is not reflected
in this analysis, except in this comment. Reportedly,
however, the amendments would authorize a waiver of the
fees, as opposed to banning fee waivers outright, but only
on the first $100 wagered by the player-dealer in order to
aid in the rotation of the player-dealer position at the
table.
Furthermore, the proposed amendments reportedly would amend
existing law governing what does or does not constitute a
"banking game" or a "banked game" with respect to rotation
of the player-dealer position.
Statements of supporters : Proponents of AB 820 state that
the law is ambiguous regarding waiver of fees for card
players, and that this bill is needed to clarify existing
statutes for the benefit of the regulators and the
regulated card rooms.
Supporters also note that recently, a number of card clubs
have stopped charging the players a collection fee,
"raising the question as to how the card clubs are making a
living since collection fees are their primary source of
revenue." Supporters state that charging of a collection
fee is one of the main differences between the play of
games in card clubs versus that in tribal casinos, which
have the exclusive right to offer banking and percentage
games. They note that card clubs are not allowed to have an
interest in the outcome of a card game, and are prohibited
from banking the games or from taking a percentage of the
player's wagers. Instead, card clubs make a living by
charging a fixed fee from each player, gaining the same
-------------------------
<2> Subdivision (f), Penal Code � 337j
AB 820 (Gomez) continued
PageD
revenue regardless of who wins or loses.
Statements in opposition : Opponents to AB 820 state that
the bill would undo over a decade of sound policy, and
would severely limit a card room's ability to operate by
mandating that each card room charge customers certain
collection fees per wager. They state that for the past
decade, card rooms have had the ability to waive collection
fees for their customers, and there is no valid policy
reason why card rooms should be forced to charge their
customers more than other gaming businesses in the state.
Opponents to the bill complain that, since the rise of
tribal gaming after the passage of Proposition 1A in 2000,
their businesses have been forced to compete against tribal
casinos located nearby that have the ability to offer games
they are prohibited from offering. They contend that the
tribal casinos and the "mammoth sized cardrooms in Los
Angeles, both of whom have vast resources, have been
pushing around smaller operators for decades." Finally,
opponents state that "special interests should not be
permitted to abuse the legislative process to solely
benefit themselves to the detriment of every other card
room. This proposal is a form of legislative price fixing,
and it should not be tolerated."
PRIOR/RELATED LEGISLATION
AB 278 (Bermudez), Chapter 756, Statutes of 2003. Allows a
gambling establishment to waive the collection of described
player fees collected by the club for any hand or round of
play pursuant to the published rules of the game and public
notice.
SUPPORT:
Bicycle Casino
California Tribal Business Alliance
Commerce Casino
Hawaiian Gardens Casino
Hustler Casino
Viejas Band of Kumeyaay Indians
OPPOSE:
Artichoke Joe's
AB 820 (Gomez) continued
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Capitol Casino
Casino Club
Certified Players, Inc.
Citrus Heights Chamber of Commerce
City of Chula Vista - Mayor Cheryl Cox
City of Oceanside - Councilmembers Jack Feller and Jerome
Kern
Clovis Club 500 Casino
Communities for California Cardrooms
Crystal Casino
Hollywood Park Casino
Lake Elsinore Hotel & Casino
Lucky Chances Casino
Lucky Derby
Oceans 11 Casino
Qualified Player Services
Rhino Gaming Inc.
Village Club
FISCAL COMMITTEE: Senate Appropriations Committee
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