BILL ANALYSIS Ó
AB 1691
Page 1
Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1691 (Jones-Sawyer) - As Amended: May 6, 2014
Policy Committee: Governmental
Organization Vote: 11-2
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill authorizes a private, nonprofit organization
established by, or affiliated with, one of the following
professional sports organizations to conduct a 50/50 raffle to
directly support charitable purposes in California:
1)A team from Major League Baseball, the National Hockey League,
the National Basketball Association, the National Football
League, the Women's National Basketball Association, or Major
League Soccer.
2)The Professional Golfers Association, Ladies Professional
Golfers Association, or National Association for Stock Car
Auto Racing.
In summary, this bill places the following additional
restrictions on the raffles:
1)50% of the gross receipts shall be used to benefit the
charitable organization, and in no event may any compensation
be paid to the persons operating the raffle from the proceeds
required to be dedicated to beneficial or charitable purposes.
2)Only one raffle may be conducted per home game, and must be
conducted by manual draw.
3)No raffle may be conducted nor may tickets for a raffle be
sold at a satellite wagering facility or racetrack, within a
gambling establishment, or over the internet, although the
organization may advertise its raffle tickets over the
internet.
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4)Specifies the Department of Justice (DOJ) may require an
eligible organization to pay an annual registration fee of $10
to cover enforcement and administration costs, and allows the
DOJ to adjust the annual registration fee by regulation to
ensure that amounts collected fully offset actual costs.
5)All organizations conducting the raffles must register with
the DOJ via a registration form available on the internet and
provide annual reports to the DOJ regarding the net receipts,
costs, and charitable uses of the proceeds from the raffles
conducted.
The bill requires the DOJ to conduct a study on the effects of
this bill, including the number of raffles per year, amounts
raised for charities, a comparison of moneys raised under this
provision compared with other raffles, other impacts on
charitable giving, and consumer complaints, and report it to the
Assembly Committee on Governmental Organization prior to March
31, 2017.
The bill sunsets on December 31, 2017.
Because this bill amends the percentage of gross receipts from a
raffle required to be dedicated to beneficial or charitable
purposes, the California Constitution requires a 2/3 vote of
each house of the Legislature.
FISCAL EFFECT
1)General Fund costs to the DOJ for Charitable Trusts Section
staffing, administration of the charitable organization
registry and annual reporting, and ongoing enforcement of
approximately $350,000 to $475,000 per year. Those costs may
be recovered, at least in part, through annual registration
fees.
2)Potentially significant GF costs to the DOJ to compile and
analyze the data, and produce the report on the effects of
this bill.
COMMENTS
1) Purpose. According to the author, this bill would allow
professional sports franchises to operate game-day 50/50
AB 1691
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charitable raffles, in which 50% of the proceeds are awarded
to the winning ticket holder and 50% of the proceeds are
donated to local charities. The author contends AB 1691 will
maintain current legal protections while making charitable
raffles more attractive to participants and raising additional
contribution money. The author asserts the current 90/10
restriction limits charities' ability to attract
participation, reducing the overall amount of contributions.
According to the author, advances in raffle technologies allow
for secure, real-time transactions and auditing. This
technology has proven to be popular in several other states,
and has helped generate considerable interest in professional
sports charitable raffles of the type proposed in this bill.
2) Existing Law. The California Constitution permits charitable
organizations to conduct raffles to raise contribution funding
if at least 90% of the gross receipts from the raffle go
directly to the beneficial or charitable purposes in
California. The Constitution permits the Legislature to amend
the percentage of gross receipts required by statute exacted
with a 2/3 vote of each house.
3) 50/50 Raffles. According to the author, 50/50 raffles
conducted at sports teams in Arizona have been very
successful. The Phoenix Coyotes, a professional hockey team,
conducted several 50/50 raffles during the 2013-14 season,
averaging around $18,000 in gross receipts per raffle with a
high of $38,000 on one occasion. The Arizona Diamondbacks, a
professional baseball team with a considerably larger stadium
and greater number of attendees, received approximately
$100,000 in gross receipts on one occasion.
Analysis Prepared by : Joel Tashjian / APPR. / (916) 319-2081