AB 2291, as introduced, Jones-Sawyer. Gambling: Internet poker: unlawful gambling activity.
(1) The Gambling Control Act provides for the licensure of certain individuals and establishments that conduct controlled games, as defined, and for the regulation of these gambling activities by the California Gambling Control Commission. The Department of Justice has related investigatory and enforcement duties under the act. Any violation of these provisions is punishable as a misdemeanor, as specified.
This bill would establish a framework to authorize intrastate Internet poker, as specified. The bill would authorize eligible entities to apply to the commission for a 10-year nontransferable license to operate an intrastate Internet poker Web site offering the play of authorized Internet poker games to registered players within California, as specified. The bill would require that the license be automatically renewed every 10 years upon application, as specified. The bill would prohibit the offer or play of any gambling game provided over the Internet that is not an authorized Internet poker game permitted by the state pursuant to this bill. The bill would prohibit, among others, a federally recognized California Indian tribe that operates a gaming facility that accepts bets from players within the state but who are not physically present on Indian lands when making bets from operating an Internet poker Web site. The bill also would provide that it is unlawful for a person to patronize, or to own or operate, a place of public accommodation within this state in which computer terminals, laptop computers, hand-held devices, or similar devices are made available for accessing Internet Web sites to play gambling games, or where those devices are otherwise empowered or enabled to access Internet Web sites to play gambling games. The bill would provide that it is unlawful for a person to aggregate computers or other access devices in a public setting within this state for the purpose of playing a gambling game on the Internet, or to promote, facilitate, or market that activity. The bill would provide that any violation of these provisions is punishable as a misdemeanor. By creating new crimes, the bill would impose a state-mandated local program.
This bill would require the commission, and any other state agency with a duty pursuant to these provisions, to adopt regulations within 270 days after the operative date of this bill, in consultation with the department and federally recognized California Indian tribes, to implement these provisions, and to facilitate the operation of intrastate Internet poker Web sites and expedite the state’s receipt of revenues. The bill would require a license applicant to apply to the commission and pay a registration fee sufficient to cover all costs associated with the issuance of the license, for deposit into the Internet Poker Fund, as created by the bill, to be continuously appropriated to the department and the commission in the amounts reasonably necessary to investigate and evaluate the suitability of the licensee’s subcontractors. An applicant that is a federally reorganized Indian tribe also would be required to submit a limited waiver of its sovereign immunity.
This bill would require the payment of an unspecified annual regulatory fee, for deposit into the Internet Poker Fund, to be continuously appropriated for the actual costs of license oversight, consumer protection, state regulation, problem gambling programs, and other purposes related to this bill. The bill would require each licensee to pay a one-time license fee in the amount of $5,000,000 for deposit in the General Fund. The license fee would be credited against quarterly fees equivalent to 5% of the licensee’s gross gaming revenue proceeds, as specified. The bill would require an applicant for an intrastate Internet Poker license to provide documentation establishing that the applicant is qualified to pay the one-time license fee from its own assets, or its owner’s assets, or through credit extended to the entity, as specified.
This bill would establish the Unlawful Gambling Enforcement Fund as a special fund within the General Fund for purposes of ensuring adequate resources for law enforcement charged with enforcing the prohibitions and protections of the provisions described above. The bill would authorize the Attorney General, and other public prosecutors, as specified, to bring a civil action to recover a civil penalty in an unspecified amount against a person who engages in those prohibited activities described above, or other specified unlawful gambling activities involving lotteries and slot machines. The bill would provide for an unspecified percentage of revenues from civil penalties collected to be deposited into the fund and used for law enforcement activities pursuant to these provisions, upon appropriation by the Legislature.
This bill would require the commission, in consultation with the department, the Treasurer, and the Franchise Tax Board, to issue a report to the Legislature describing the state’s efforts to meet the policy goals articulated in this bill within one year of the operative date of this bill and, annually, thereafter. The bill would also require the Bureau of State Audits, at least 4 years after the issue date of any license by the state, but no later than 5 years after that date, to issue a report to the Legislature detailing the implementation of this bill, as specified.
This bill would prohibit the state from affirmatively electing to be subject to a federal Internet gambling law, as specified, and would require the state to opt out of, or would prohibit the state from opting into, any federal Internet gambling scheme. The bill would provide that if the state violates these prohibitions, a licensee shall not be required to pay the one-time license fee or the quarterly fees described above and would require the state to refund within 30 days all unused license fees paid to the state, as specified. The bill would authorize a licensee to enforce this provision in state court. The bill also would prohibit the state from participating in any Internet gambling agreement between states or foreign jurisdictions.
This bill authorizes the department to revoke or suspend any license or work permit upon reaching a finding that the licensee or employee is in violation of the provisions described above, or any regulation adopted pursuant to these provisions. However, the bill would prohibit a tribal licensee from having its license suspended or revoked, or be fined or otherwise penalized for complying with any applicable federal law or regulation when operating an Internet poker Web site on Indian lands. The bill would specify that to the extent that any state requirement is more strict than any applicable federal law requirement, the tribal licensee is required to comply with the state requirement.
(2) Existing law, subject to exceptions, generally prohibits the possession and use of a “slot machine or device,” as defined, and prohibits certain other acts and transactions pertaining to slot machines or devices. Existing law provides varying definitions of “slot machine or device” for these purposes. A violation of these provisions is punishable as a misdemeanor.
This bill would provide that an “electronic sweepstakes device,” as defined, is a slot machine or device within the meaning of these provisions. By expanding the scope of existing crimes, the bill would impose a state-mandated local program.
(3) The bill would provide that its provisions are not severable.
(4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
(5) This bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2⁄3. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Chapter 5.2 (commencing with Section 19990.01)
2is added to Division 8 of the Business and Professions Code, to
This chapter shall be known and may be cited as the
12Internet Poker Consumer Protection Act of 2014.
The Legislature hereby finds and declares all of the
P5 1(a) Since the development of the Internet, Web sites offering
2gambling have raised consumer protection and enforcement
3concerns for federal and state governments as these Web sites are
4often operated by unknown persons located in many different
5countries, subject to little or no oversight, and have sought to attract
6customers from the United States.
7(b) Californians participate in illegal online gambling on
8unregulated Internet Web sites every week. Neither federal nor
9California laws provide any consumer protections for California
10players. California players assume all risks, any negative social or
11financial impacts are borne by the citizens of California, and the
12revenues generated from online gambling are being realized by
13offshore operators and do not provide any benefits to the citizens
15(c) The presence, operation, and expansion of offshore,
16unlicensed, and unregulated Internet gambling Web sites available
17to Californians endanger Californians because the current Internet
18gambling Web sites operate illegally and without regulation as
19demonstrated by criminal prosecutions of some Internet gambling
20purveyors, and questions often arise about the honesty and the
21fairness of the games played on these Internet gambling Web sites
22as well as the true purpose for, and use of, proceeds generated by
23these unregulated Internet gambling Web sites. In addition, some
24of the unlicensed and unregulated Internet gambling activity
25interferes with rights Californians preserved to federally recognized
26tribal governments when amending the state’s Constitution, with
27that amendment providing federally recognized tribes the sole and
28exclusive right to engage in slot machine and house-banked
29casino-style gaming in California.
30(d) These rights were separately guaranteed in 1999 and at
31various times thereafter, when the state negotiated and entered into
32compacts with tribes pursuant to the federal Indian Gaming
33Regulatory Act of 1988 (IGRA), under which signatory tribes
34possess the exclusive right within the state to operate “gaming
35devices,” defined to include any slot machines, and specifically,
36among other things, any electronic device enabling a player to
37participate in games involving an element of chance for the possible
38delivery of a prize or something of value, as well as house-banked
39and percentage games. The authorization of certain types of online
P6 1gaming, including slot machine or house-banked casino-style
2games, could impinge upon these rights.
3(e) Tribally owned and operated casinos have contributed to
4local economies, generated tens of thousands of jobs for
5Californians, and provided hundreds of millions of dollars in
6revenues for the state since the advent of Indian gaming, and are
7entitled to the full protection of the laws of this state. As such, the
8state is presently engaged in regulatory and enforcement efforts
9to combat the rise of illegal gambling activity that threatens not
10only protected rights, but the health and welfare of all Californians.
11(f) In October 2006, Congress passed the SAFE Port Act (Public
12Law 109-347), to increase the security of United States ports.
13Embedded within the language of that act was a section entitled
14the Unlawful Internet Gambling Enforcement Act of 2006
15(UIGEA), which prohibits the use of banking instruments,
16including credit cards, checks, or fund transfers, for interstate
17Internet gambling. UIGEA includes exceptions, including, but not
18limited to, one that permits individual states to create a regulatory
19framework to enable intrastate Internet gambling, provided the
20bets or wagers are made exclusively within a single state whose
21state laws or regulations comply with all of the following:
22(1) Contain certain safeguards regarding those transactions,
23including both of the following:
24(A) Age and location verification requirements.
25(B) Data security standards designed to prevent access to minors
26and persons located outside of that state.
27(2) Expressly authorize the bet or wager and the method by
28which the bet or wager is made.
29(3) Do not violate any federal gaming statutes, including all of
31(A) The Interstate Horseracing Act of 1978.
32(B) The Professional and Amateur Sports Protection Act.
33(C) The Gambling Devices Transportation Act.
35(g) State authorization to operate Internet poker consistent with
36federal law, and heightened regulation and enforcement regarding
37Internet gambling activity that goes beyond poker, provides
38California with the means to protect its citizens and consumers
39under certain conditions by providing a framework to ensure that,
40among other things, the state is not subject to an unnecessary and
P7 1unprecedented expansion of gambling, minors are prevented from
2gambling, citizens participating in Internet poker activities are
3protected, and the state is not deprived of income tax revenues to
4which it would otherwise be entitled from these activities.
5(h) The Legislature recognizes that the regulation of gambling
6activities within the state’s jurisdiction is of particular concern to
7the public interest, particularly with the advent of the Internet, and
8inherent dangers associated with online gambling activities, and
9accordingly recognizes the need to protect Californians from an
10unprecedented expansion of gambling activities within the state.
11This chapter is a vehicle to generate additional resources to protect
12Californians from this increased illegal Internet gambling activity.
13(i) At the same time, the Legislature recognizes that
14 nonhouse-banked poker, as compared to other forms of gaming,
15poses less risk to the general public given the element of skill
16involved. Poker is unlike casino house-banked games or sports
17betting, in that poker operators are not participants in the games
18and only receive a set fee for hosting them. Poker players’ winnings
19come not from the house, but from the pool of other players. In
20addition, winning at poker involves some measure of skill. Skillful
21poker players can earn winnings in the long term, while players
22of house-banked games will always play against odds favoring the
24(j) The state currently maintains and implements substantial
25regulatory and law enforcement efforts to protect thousands of
26Californians who gamble and play, among other things, real-money
27poker in licensed California card rooms.
28(k) Federally recognized Indian tribes in California offer
29real-money poker, including electronically aided poker, on their
30Indian lands as a “class II” game under IGRA.
31(l) While the state, federal
government, and tribal governments
32exercise regulatory authority over various real-money poker games
33offered in California, none of those entities presently provide
34licensing requirements, regulatory structure, or law enforcement
35tools to protect millions of Californians who play the same games
36daily for money on the Internet.
37(m) In order to protect Californians who gamble online, allow
38state law enforcement to ensure consumer protection, ensure
39compliance with the California Constitution and negotiated
40compacts, and keep the revenues generated from Internet gambling
P8 1in California, it is in the best interest of the state and its citizens
2to authorize, implement, and create a legal system for intrastate
3Internet gambling that is limited to the game of poker.
4(n) The California Gambling Control Commission and the
5Department of Justice, in conjunction with other state agencies
6and tribal governmental gaming regulators, have the expertise to
7issue licenses to conduct intrastate Internet poker to existing
8operators of regulated gaming that are otherwise eligible to conduct
9real-money poker games in California.
10(o) The state also possesses a legitimate interest in protecting
11the integrity of state-authorized intrastate Internet poker by
12licensing only those entities that are otherwise eligible to offer
13real-money poker games within the state that have significant
14experience operating in a regulated land-based gaming facility
15environment. The state’s interests are best met, therefore, by
16licensing only those entities in California that have experience
17operating card rooms and tribal gaming facilities that are currently
18permitted to offer live real-money poker games and are in good
19standing with the appropriate state, federal, and tribal regulatory
21(p) This chapter will permit a qualified card room to obtain a
22license from the state to operate poker games via the Internet for
23players within the jurisdiction of California. In addition, the chapter
24will permit a qualified federally recognized California Indian tribe
25to obtain a license from the state to operate poker games via the
26Internet for players located within the jurisdiction of California.
27(q) Participation by tribes will further the interests of the state
28because tribes have significant experience operating and regulating
30(r) The authorization of intrastate Internet poker pursuant to this
31chapter does not violate any tribal-state compact or the California
32Constitution. Application of UIGEA in California, as set forth in
33this chapter, also does not violate federal Indian law by impinging
34upon protected tribal sovereignty. Accordingly, nothing in this
35chapter shall alter, diminish, or impact the rights and obligations
36of tribes in existing tribal-state compacts approved pursuant to
37IGRA, or require that those compacts be renegotiated. At the same
38time, a tribal licensee does not relinquish any rights under its
39compact with the state by virtue of participating in intrastate
40Internet poker pursuant to this chapter, which is intended to respect
P9 1the regulatory obligations and responsibilities of state, tribal, and
3(s) The state can only protect Californians from the increased
4onslaught of unlawful Internet gambling activity through diligent
5and comprehensive enforcement efforts, and in particular, through
6heightened enforcement efforts against unauthorized slot machines,
7lotteries, sweepstakes cafés offering slot machine gambling and
8games that mimic slot machines under the guise of selling Internet
9usage, time, or other illusory items, and card rooms that play
10baccarat and other banked or percentage card games.
It is the intent of the Legislature to create a licensing
12and regulatory framework and enforcement mechanisms to do all
13of the following:
14(a) Ensure that authorized Internet poker games are offered for
15play only in a manner that is consistent with federal and state law.
16(b) Ensure the state possesses sufficient resources to enforce
17prohibitions of illegal gambling activity, in part, by establishing
18a special regulatory enforcement fund and by empowering the
19department to retain a portion of receipts collected from illegal
20operations and, as necessary, receipts collected in accordance with
22(c) Authorize and direct the
commission to issue a license to
23certain existing operators of regulated real-money poker games in
24California that meet the eligibility requirements and timely submit
25the required application and registration fees.
26(d) Include all of the provisions in this chapter as terms of the
27license between the state and each licensee, subject to the
28enforcement provisions delineated in this chapter.
29(e) Ensure that each licensee complies with applicable laws and
31(f) Grant power to the state agencies authorized in this chapter
32to oversee the operations of each licensee and to enforce the
33provisions of this chapter to ensure that the interests of the state
34and registered players are protected.
35(g) Establish a process that includes a background
36and requires that each employee of each licensee or subcontractor
37receives all necessary work permits from the state and, in the case
38of a qualified Indian tribe, as applicable, from that tribe’s gaming
P10 1(h) Ensure that the state is able to collect income tax revenues
2from registered players participating in Internet poker activity in
4(i) Distribute regulatory fees collected by the state from each
5licensee to the Internet Poker Fund, as established in Section
619990.75, which shall be administered by the Controller, subject
7to annual appropriation by the Legislature for the following:
8(1) The actual costs of license oversight, consumer protection,
9state regulation, and problem gambling programs.
purposes related to this chapter as the Legislature may
11decide, including, but not limited to, enforcement efforts related
12to illegal Internet gambling activities.
13(j) Create systems to protect each registered player’s private
14information and prevent fraud and identity theft.
15(k) Ensure that registered players are able to have their financial
16transactions processed in a secure, timely, and transparent fashion.
17(l) Require that each licensee provide registered players with
18accessible customer service.
19(m) Require that each licensee’s Internet poker Web site contain
20information relating to problem gambling, including a telephone
21number that an individual may call to seek information and
22assistance for a potential gambling addiction.
23(n) Require that each licensee, or consortia of eligible licensees,
24be organized in California or be a federally recognized Indian tribe
25located in California. The licensee, its facilities, other than
26redundant servers, its bank accounts and accounting records related
27to its intrastate Internet poker operations, and its registered players’
28deposits, shall be located entirely within the state.
29(o) Ensure that each licensee is the primary beneficiary and
30majority owner of the Internet poker business. The Internet poker
31Web site domain shall be owned by the licensee to ensure
32protection of players by readily identifying who is the actual
34(p) Ensure that all employees of the licensee are physically
35present in the state when working on the licensee’s Internet poker
36Web site or in its facilities connected to the play of Internet poker
37in this state, or when in contact with registered players. However,
38the licensee shall have discretion to use the expertise of personnel
39not physically present in the state when necessary to protect
40registered players and state interests, including, but not limited to,
P11 1for the purposes of diagnosing and addressing technological
2problems, investigating fraud and collusion, and developing and
3supervising software and configuration changes.
4(q) Create an express exemption from disclosure, pursuant to
5the California Public Records Act under subdivision (b) of Section
66253 of the Government Code, that exempts from public disclosure
7proprietary information of a license applicant or a licensee in order
8to permit disclosure of confidential information to state agencies
9while achieving the public policy goals of deploying secure systems
10that protect the interests of both the state and players.
11(r) Require the state to opt out of, and decline to opt into, any
12federal framework for Internet gambling.
13(s) As a matter of statewide concern, preempt any city, county,
14or city and county from enacting any law or ordinance regulating
15or taxing any matter covered in this chapter.
For the purposes of this chapter, the following words
20have the following meanings:
21(a) “Authorized Internet poker game” means any of several card
22games, duly authorized by the commission and played on an
23Internet poker Web site, that meets all of the following criteria:
24(1) Commonly understood to be a “poker game” that is legal
25under state law as of the effective date of this chapter, including,
26but not limited to, all of the following:
31(2) Not a percentage game or banked game in which a licensee,
32player, or combination of players operates as the bank or house at
33any time during the course of the game.
34(3) Played by individual players against one another, and never
35by a field of players against one player, including, but not limited
36to, Pai Gow poker, Three Card poker, and other poker variants
37with similar rules.
38(b) “Background investigation” means a process of reviewing
39and compiling personal and criminal history and financial
40information through inquiries of various law enforcement and
P12 1public sources to establish a person’s qualifications and suitability
2for any necessary license or employee work permit issued pursuant
3to this chapter.
4(c) “Bet” means the placement of a wager in a game.
5(d) “Card room” means a gambling establishment, as defined
6in subdivision (o) of Section 19805.
7(e) “Commission” means the California Gambling Control
9(f) “Core functions” and “core functioning” mean any of the
11(1) The management, administration, or control of wagers on
12authorized Internet poker games.
13(2) The management, administration, or control of the games
14with which those wagers are associated.
15(3) The development, maintenance, provision, or operation of
16a gaming system.
17(g) “Department” means the Department of Justice.
18(h) (1) “Eligible Entity” includes only (A) a card room operated
19pursuant to Chapter 5 (commencing with Section 19800) whose
20owner or owners have been authorized, subject to oversight by,
21and in good standing with the applicable state regulatory
22authorities, or (B) a federally recognized California Indian tribe
23that operates a gaming facility pursuant to a facility license issued
24in accordance with a tribal gaming ordinance approved by the
25Chair of the National Indian Gaming Commission and that is
26eligible to conduct real-money poker at that facility. An entity
27identified in this paragraph shall have operated its gaming facility
28for at least five years immediately preceding its application to
29secure a license to operate an Internet poker Web site pursuant to
30this chapter, and shall be in good standing during that time period
31with the applicable federal, state, and tribal regulatory authorities.
32(2) A group of federally recognized California tribes or
33California card rooms is eligible to jointly apply for a license
34pursuant to this chapter, through an entity organized under state
35or federal law, if each entity within the group independently
36satisfies the requisite eligibility requirements identified in this
38(3) Subject to any applicable limited waiver of sovereign
39immunity as set forth in subdivision (c) of Section 19990.21, this
40chapter does not restrict a tribal licensee from participating as an
P13 1instrumentality of a tribal government or a political subdivision
2of a tribe, or from forming a separate business entity organized
3under federal, state, or tribal law.
4(i) “Employee” means any natural person employed in, or
5 serving as a consultant or independent contractor with respect to,
6the core functioning of the actual operation of an intrastate Internet
7poker Web site.
8(j) “Employee work permit” means a permit issued to an
9employee of the licensee or a subcontractor by the commission or,
10if applicable, tribal gaming regulatory authority, after a background
12(k) “Finding of suitability” means a finding by the commission
13that a subcontractor meets the qualification criteria described in
14Article 4 (commencing with Section 19990.20), and that the person
15would not be disqualified on any of the grounds specified in Article
164 (commencing with Section 19990.20).
17(l) “Gambling” means to deal, operate, carry on, conduct,
18maintain, or expose for play any game for money.
19(m) “Game” means any gambling game.
20(n) “Gaming system” means the technology, including hardware
21and software, used by a licensee to facilitate the offering of
22authorized Internet poker games to registered players.
23(o) “Good standing” means that a person has not had a gambling
24license suspended or revoked by a final decision of the commission
25or been finally ordered by a court of competent jurisdiction to
26cease conducting gaming activities.
27(p) “Gross gaming revenues” means the total amount of money
28paid to, and retained by, a licensee in connection with the operation
29of authorized Internet poker games under this chapter before
30deducting the cost of operating those authorized Internet poker
31games. Gross gaming revenues shall not include player account
32deposits, amounts wagered, except any portion of the amount
33wagered that is retained by the licensee as permitted by this chapter,
34discounts on goods or services, rebates or promotional discounts
35or stakes provided to players, or revenues from nongaming sources.
36(q) “Internet access device” means a personal computer or
37mobile communications device used primarily for connection to
38the Internet, and incidentally used for the purpose of playing
39authorized Internet poker games offered by a licensee.
P14 1(r) “Internet Poker Fund” means the fund established pursuant
2to Section 19990.75 for annual appropriation by the Legislature.
3(s) “Internet poker Web site” means an Internet Web site, or
4similar communications facility approved by the commission,
5through which a bet or wager is initiated, received, or otherwise
6made for an authorized Internet poker game.
7(t) “Intrastate” means within the borders and jurisdiction of
9(u) “Key employee” means any natural person employed by a
10licensee, subcontractor, or player recruiter, or by a holding or
11intermediary company of a licensee, subcontractor, or player
12recruiter, who is an officer or director of the licensee or certificate
13holder, or who, in the judgment of the commission, has the
14authority to exercise significant influence over decisions
15concerning the operation of the licensee or certificate holder as
16that operation relates to the Internet poker authorized by this
18(v) “Land-based gaming facility” means a card room operated
19pursuant to Chapter 5 (commencing with Section 19800) or a
20casino operated by a federally recognized Indian tribe on Indian
21land in California.
22(w) “Licensee” means an eligible entity licensed pursuant to
23this chapter to offer the play of authorized Internet poker games
24to registered players on an intrastate Internet poker Web site.
25(x) “Online self-exclusion form” means a form on which an
26individual notifies a licensee that he or she must be excluded from
27participation in authorized Internet poker games for a stated period
29(y) “Owner” means any person that has a financial interest in,
30or control of, a subcontractor or other entity required to be found
31suitable under this chapter. An owner of a licensee shall include
32only those persons eligible to own a land-based gaming facility in
33California. Owner does not include the members or government
34officials of a federally recognized California Indian tribe.
35(z) “Per hand charge” means the amount charged by the licensee
36for registered players to play in a per hand game.
37(aa) “Per hand game” means an authorized Internet poker game
38for which the licensee charges the player for each hand played.
39(ab) “Person” means an individual, corporation, business trust,
40estate, trust, partnership, limited liability company, association,
P15 1joint venture, government, governmental subdivision, agency, or
2instrumentality, public corporation, or any other legal or
3commercial entity, including any federally recognized California
4Indian tribe, or an entity that is wholly owned by the tribe.
5(ac) “Play settings” means the options and default parameters
6made available by a licensee to a registered player in the play of
7authorized Internet poker games.
8(ad) “Proprietary information” means and includes all
9information that, whether or not patentable or registerable under
10patent, copyright, trademark, or similar statutes, (1) can be
11protected as a trade secret under California law or any other
12applicable state law, federal law, or foreign law, or (2) derives
13independent economic value, actual or potential, from not being
14generally known to the public or to other persons that can obtain
15economic value from its disclosure or use. “Proprietary
16information” includes, but is not limited to, computer programs,
17databases, data, algorithms, formulae, expertise, improvements,
18discoveries, concepts, inventions, developments, methods, designs,
19analyses, drawings, techniques, strategies, new products, reports,
20unpublished financial statements, budgets, projections, billing
21practices, pricing data, contacts, client and supplier lists, business
22and marketing records, working papers, files, systems, plans, and
23all registrations and applications related thereto.
24(ae) “Proxy player” means the use of a machine, device, or
25agent, other than the registered player, to play an authorized
26Internet poker game.
27(af) “Registered player” means a player who has registered with
28a licensee to play authorized Internet poker games on the licensee’s
29intrastate Internet poker Web site.
30(ag) “Registration information” means the information provided
31by a person to a licensee in order to become a registered player.
32(ah) “Robotic play” means the use of a machine or software by
33a registered player or licensee to automate the next player action
34at any point in a game, including the use of a proxy player.
35(ai) “State” means the State of California.
36(aj) (1) “Subcontractor” means any person, other than an
37employee, that does any of the following:
38(A) On behalf of a licensee, manages, administers, or controls
39wagers on authorized Internet poker games provided over the
40Internet by a licensee pursuant to this chapter.
P16 1(B) On behalf of a licensee, manages, administers, or controls
2the games with which those wagers are associated.
3(C) On behalf of a licensee, develops, maintains, provides, or
4operates a gaming system.
5(D) Sells, licenses, or otherwise receives compensation for
6selling or licensing information on individuals in California who
7made wagers on games over the Internet that were not licensed
8under this chapter via a database or customer lists.
9(E) Provides any product, service, financing, or asset to a
10licensee and is paid a percentage of gaming revenue by the licensee,
11not including fees to financial institutions and payment providers
12for facilitating a deposit by a customer.
13(F) Provides intellectual property, including the trademarks,
14trade names, service marks, or similar intellectual property under
15which a licensee identifies its games to its customers.
16(G) Receives compensation as part of an affiliate marketing
17program for bringing players or potential players to a licensee’s
18intrastate Internet poker Web site.
19(2) “Subcontractor” shall not include a provider of goods or
20services that provides similar goods or services to the public for
21purposes other than the operation of Internet gambling activities,
22and is not otherwise directly or indirectly involved in the operation
23of an Internet poker Web site pursuant to a license issued under
26agreement offered by a licensee and accepted by a registered player
27delineating, among other things, permissible and impermissible
28activities on an intrastate Internet poker Web site and the
29consequences of engaging in impermissible activities.
30(al) “Tournament” means a commission-approved competition
31in which registered players play a series of authorized Internet
32poker games to decide the winner.
33(am) “Tournament charge” means the amount charged by the
34licensee for registered players to play in a tournament.
35(an) “Tournament winnings” means the amount of any prize
36awarded to a registered player in a tournament.
37(ao) “Tribal gaming regulatory authority” means the gaming
38regulatory authority of a federally recognized California Indian
39tribe that has the authority to regulate gaming on the tribe’s Indian
P17 1lands pursuant to the federal Indian Gaming Regulatory Act of
3(ap) “Tribe” means a federally recognized California Indian
4tribe, including, but not limited to, the governing body of that tribe
5or any entity that is wholly owned by the tribe.
6(aq) “Unlawful Gambling Enforcement Fund” means the special
7fund established pursuant to Section 19990.77, the revenue of
8which are dedicated to enforcing the prohibitions of this chapter.
Under the federal Unlawful Internet Gambling
14Enforcement Act of 2006, California is permitted to authorize
15games played via the Internet as long as all players and the online
16wagering is located within the jurisdiction of the state and the
17games are not played by minors.
Notwithstanding any other law, a person in
19California 21 years of age or older is hereby permitted to participate
20as a registered player in an authorized Internet poker game provided
21over the Internet by a licensee on an approved intrastate Internet
22poker Web site as described in this chapter.
(a) A person shall not offer any game of poker on
24the Internet in this state, other than a game operated pursuant to
25federal law that is confined to Indian lands with all players
26physically present on the Indian lands within this state, unless that
27person holds a valid license issued by the state to offer the play of
28authorized Internet poker games on an intrastate Internet poker
29Web site pursuant to this chapter. A federally recognized California
30Indian tribe that operates a gaming facility that accepts bets from
31players within this state but who are not physically present on
32Indian lands when making the bet shall not be eligible to operate
33an Internet poker Web site pursuant to this chapter.
34(b) It is unlawful for any person to offer or
play any gambling
35game provided on the Internet that is not authorized by the state
36pursuant to this chapter.
37(c) It is unlawful for any person to use a device other than an
38Internet access device to play any authorized Internet poker game.
39(d) A violation of this chapter is punishable as a misdemeanor.
Chapter 5 (commencing with Section 19800) does
2not apply to this chapter.
Only poker games consistent with the definition in
4Section 19990.05, and approved by the commission for play on
5an intrastate Internet poker Web site, may be offered for play on
6an intrastate Internet poker Web site pursuant to this chapter. All
7other forms of Internet gambling other than Internet poker played
8in this state pursuant to this chapter, are prohibited and subject to
9penalty as provided in this chapter. This prohibition includes, but
10is not limited to, any game offered in Nevada or New Jersey other
11than poker, sports betting, any banked or percentage game, and
12any game that would be considered class III gaming as that term
13is used in the federal Indian Gaming Regulatory Act of 1988 if
14played on Indian lands.
(a) It is unlawful for a person to patronize, or to
16own or operate, a place of public accommodation within this state,
17including a club or association limited to dues-paying members
18or similar restricted groups, or similar establishments, in which
19computer terminals, laptop computers, hand-held devices, or similar
20devices are made available for accessing Internet Web sites to play
21gambling games, or where those devices are otherwise empowered
22or enabled to access Internet Web sites to play gambling games.
23(b) It is unlawful for a person to aggregate computers or other
24access devices in a public setting within this state for the purpose
25of playing a gambling game on the Internet, or to promote,
26facilitate, or market that activity.
27(c) This chapter does not restrict a federally recognized Indian
28tribal government, or its wholly owned tribal entities, from
29participating in activities described in subdivision (a) exclusively
30within Indian lands as defined by the federal Indian Gaming
(a) To protect Californians from an unprecedented
33and unwanted expansion of gambling activity on the Internet, and
34also to protect California’s investments in land-based gaming
35facilities, which generate thousands of jobs for Californians and
36hundreds of millions of dollars for the state every year, the state
37shall not affirmatively elect to be subject to a federal Internet
38gambling law that would permit persons, other than tribes operating
39under tribal-state gaming compacts, to operate “gaming devices,”
P19 1as that term is defined by state law and tribal-state gaming
2compacts, or to operate house-banked games.
3(b) If a federal law authorizing Internet gambling in the state is
4enacted, and if that federal law provides that states may opt out of
5the federal Internet gambling scheme, the state shall opt out of that
6federal Internet gambling scheme in the manner and time frame
7provided by that federal law. In the event the federal law allows
8states to affirmatively opt into any federal Internet gambling
9scheme, this state shall decline to do so. If the state violates this
10subdivision, a licensee shall not be required to pay the fees set
11forth in Section 19990.47 and the state shall refund within 30 days
12all unused license fees paid to the state to each licensee as follows:
13(1) The state shall provide any refund owed to licensees from
14the Internet Poker Fund.
15(2) In the event that there are insufficient funds in the Internet
16Poker Fund to provide these refunds, the state shall provide the
17remaining amount from the General Fund.
18(c) A licensee may bring suit
to enforce subdivision (b) in state
20(d) If a federal law authorizes Internet gambling agreements
21between states or foreign jurisdictions, this state shall not
22participate in any such agreement.
(a) (1) Within 270 days after the effective date of
27this chapter, the commission, and any other state agency with a
28duty pursuant to this chapter, shall adopt regulations pursuant to
29the Administrative Procedure Act (Chapter 3.5 (commencing with
30Section 11340) of Part 1 of Division 3 of Title 2 of the Government
31Code), in consultation with the department and federally recognized
32California Indian tribes, to implement this chapter, and to facilitate
33the operation of intrastate Internet poker Web sites and expedite
34the state’s receipt of revenues in compliance with this chapter. The
35initial adoption, amendment, or repeal of a regulation authorized
36by this section is deemed to address an emergency, for purposes
37of Sections 11346.1 and 11349.6 of the Government Code, and
38the commission and those other state agencies are hereby exempted
39for that purpose from the requirements of subdivision (b) of Section
4011346.1 of the Government Code. After the initial adoption,
P20 1amendment, or repeal of an emergency regulation pursuant to this
2section, the commission and those other state agencies shall not
3request approval from the Office of Administrative Law to readopt
4the regulation as an emergency regulation pursuant to Section
511346.1 of the Government Code, but shall promulgate permanent
6regulations in accordance with all applicable law.
7(2) The regulations adopted by the commission shall address
8underage gambling and problem gambling.
9(3) The regulations of the commission also shall provide for
10temporary or provisional approvals, licenses, or certificates for
11heirs, executors, receivers, trustees, conservators, key employees,
12and other persons where an approval, license, or certificate is
14(b) (1) Each state agency with a duty pursuant to this chapter
15shall identify a contact person at that agency and describe the
16responsibility of the contact with respect to the state agency’s duty.
17(2) Any notice provided by a licensee to a state agency pursuant
18to this chapter shall be addressed to the contact identified by the
19state agency pursuant to paragraph (1).
20(3) Unless otherwise provided by this chapter, notice by a
21licensee to the state shall be deemed effectively given upon
22personal delivery, three days after deposit in the United States mail
23by certified or registered mail, return receipt requested, one
24business day after its deposit with any return receipt express
25courier, prepaid, or one business day after electronically confirmed
26transmission by facsimile.
(a) An entity seeking to be licensed to offer
28authorized Internet poker games shall apply to the commission for
29a license to engage in that activity. The commission shall charge
30the license applicant a registration fee sufficient to cover the
31reasonable costs associated with the issuance of the license.
32(b) An applicant for an intrastate Internet poker license pursuant
33to this chapter shall provide documentation establishing that if the
34license is granted, the license applicant is qualified to pay the
35license fee required by subdivision (a) of Section 19990.47 from
36its own assets, its owner’s assets, or through credit extended to the
37entity in an amount not to exceed the entity’s own assets, or its
39(c) An applicant for an intrastate Internet poker license pursuant
40to this chapter that is a federally recognized California Indian tribe
P21 1shall include with its license application a limited waiver of the
2applicant’s sovereign immunity exclusively to the state and no
3other party solely for the limited purpose of enforcing this chapter
4and any regulations promulgated thereunder, and with regard to
5any claim, sanction, or penalty arising therefrom against the
6licensee by the state, and for no other purpose.
7(d) The commission shall issue a license to operate an intrastate
8Internet poker Web site to an applicant determined by the
9commission to qualify as an eligible entity under this chapter within
1090 days of receiving an application, if the applicant submits a
11completed application form and pays the required registration fee
12within the time frame specified in subdivision(a).
13(e) The state may only issue licenses to eligible entities identified
14within this chapter. Any of the eligible entities may jointly apply
15for a license, either as a consortium or by forming an entity
16comprised entirely of eligible entities. Each eligible entity may
17have an interest in only a single license.
18(f) A license to operate an intrastate Internet poker Web site
19pursuant to this chapter shall be issued for a term of 10 years.
20Subject to the power of the commission to revoke, suspend,
21condition, or limit any license, as provided in this chapter, a license
22shall be automatically renewed every 10 years thereafter upon
23application. Failure of a licensee to file an application for renewal
24may be deemed a surrender of the license.
25(g) All licenses issued pursuant to this chapter before January
261, 2015, shall thereafter take effect on the same date, and in
27particular, on January 1, 2015, absent good cause for all of those
28licenses to take effect in unison on a subsequent date, as determined
29by the commission. Subject to those conditions, all licenses issued
30after January 1, 2015, shall take effect on the date issued.
31(h) If commercial infeasibility develops as a result of a change
32in federal law rendering the provision of intrastate Internet poker
33services illegal, or some other event, a licensee may abandon its
34operations after providing the commission with 90 days’ advance
35notice of its intent and a statement explaining its interpretation
36that continuing to operate the intrastate Internet poker Web site is
37commercially infeasible. In response to that notice, the state may
38file an action in the Superior Court of the County of Sacramento
39as it deems necessary to protect any state interests, including, but
40not limited to, the interests of registered players.
(a) All facilities, with the exception of redundant
2servers, bank accounts, and accounting records of the license
3applicant related to intrastate Internet poker shall be located in
5(b) All subcontractors of a licensee are subject to this
6subdivision. If a licensee desires to enter into an agreement with
7a subcontractor to provide goods or services in connection with
8the operation of authorized Internet poker games, that subcontractor
9is subject to this subdivision and investigation and a finding of
10suitability as set forth in Section 19990.23.
11(c) In addition to any other confidentiality protections afforded
12to license applicants, the state and its agencies shall treat the
13proprietary information of a license applicant as confidential to
14protect the license applicant and to protect the security of any
15prospective intrastate Internet poker Web site. This chapter does
16not prohibit the exchange of confidential information among state
17agencies considering a license application. The confidentiality
18provisions of this chapter exempt proprietary information supplied
19by a license applicant to a state agency from public disclosure
20consistent with subdivision (b) of Section 6253 of the Government
22(d) A license applicant shall submit to the commission, together
23with its application, a registration fee as specified in subdivision
24(a) of Section 19990.21. All moneys collected by the state pursuant
25to this subdivision shall be deposited into the Internet Poker Fund.
(a) The department shall review the suitability of
27a subcontractor providing goods or services in connection with a
28licensee’s operation of an intrastate Internet poker Web site.
29(b) The department may establish a process to conduct a
30preliminary determination of suitability based on a partial
31investigation of a subcontractor along with a determination of
32which subcontractors may be subject to a partial investigation. A
33partial investigation is intended to screen out applicants that do
34not meet the suitability requirements of this chapter. A partial
35investigation shall include fingerprint-based state and federal
36criminal history checks and clearances, and inquiries into various
37public databases regarding credit history and any civil litigation.
38A partial investigation shall also include a review of the
39subcontractor’s financial status, which shall include the required
40submission of a report prepared on behalf of the subcontractor by
P23 1a department-approved forensic accounting, audit, or investigative
2firm, in a format developed by the department, and at the
3subcontractor’s expense. The report shall include the financial
4information necessary for the department to make a preliminary
5determination of suitability. The department may specify additional
6requirements regarding the contents of the report and any other
7financial information or documentation required to be submitted.
8A full investigation shall be conducted of only those subcontractors
9that pass the partial investigation and that will undergo a full
10investigation pursuant to subdivision (c). Those subcontractors
11that do not pass the partial investigation may appeal the decision
12to the commission.
13(c) The department
shall conduct a full investigation into the
14suitability of any subcontractor of a licensee. The investigation
15shall include all of the following persons:
16(1) All officers of the subcontractor.
17(2) The owner or owners of the following:
18(A) The subcontractor.
19(B) Any affiliate of the subcontractor.
20(C) Any persons otherwise providing goods to, or performing
21services for, the subcontractor related to core functions.
22(D) Any person deemed by the department to have significant
23influence over the license applicant or its subcontractors or their
25(3) In the case of a tribe or a wholly owned tribal entity that is
26a subcontractor, the investigation shall be limited to the business
27officers of the tribal entity that will serve as the subcontractor.
28(d) A full investigation shall include a review and evaluation
29of the subcontractor’s qualifications and experience to provide the
30services anticipated, which shall include the required submission
31of a report prepared on each subcontractor by an outside firm
32contracted and supervised by the department, in a format developed
33by the department, and at the subcontractor’s expense. The report
34shall include information necessary for the department to make a
35determination of suitability, as specified in regulation, consisting
36of, but not limited to, personal history, prior activities and
37associations, credit history, civil litigation, past and present
38financial affairs and standing, and business activities. The
39department may specify additional requirements regarding the
P24 1contents of the report and other information or documentation
2required to be submitted.
3(e) A subcontractor shall not be deemed suitable if the
4subcontractor, or any affiliate of the subcontractor, accepted a
5wager from any person in California on any form of Internet
6gaming prior to ___.
(a) A licensee shall ensure that registered players
12are eligible to play authorized Internet poker games and implement
13appropriate data security standards to prevent access by a person
14whose age and location have not been verified in accordance with
16(b) A registered player shall be physically located within the
17State of California at the time of gambling.
18(c) A registered player shall not be less than 21 years of age.
19(d) Each licensee shall do all of the following:
20(1) Prior to registering a person as a registered player or
21 permitting a person to play an authorized Internet poker game, the
22licensee shall verify that the person is 21 years of age or older.
23The licensee shall attempt to match the name, address, and date
24of birth provided by the person to information contained in records
25in a database of individuals who have been verified to be 21 years
26of age or older by reference to an appropriate database of
27government records. The licensee also shall verify that the physical
28billing address on the check or credit card offered for payment by
29the person seeking to be a registered player matches the address
30listed in the database.
31(2) If the licensee is unable to verify that the person is 21 years
32of age or older pursuant to subparagraph (1), the licensee shall
33require the person to submit age-verification documents consisting
34of an attestation signed by the person that he or she is 21 years of
35age or older and a copy of a valid form of government
36identification. For the purposes of this section, a valid form of
37government identification includes a driver’s license, state
38identification card, passport, official naturalization or immigration
39document, such as an alien registration receipt card or an immigrant
40visa, or United States military identification. The licensee also
P25 1shall verify that the physical billing address on the check or credit
2card provided by the person matches the address listed in the
4(3) The licensee shall not permit registered players to make
5payments or withdrawals by money order or cash, except at a
6land-based gaming facility operated by the licensee. The licensee
7shall submit to each credit card company with which it has credit
8card sales information in an appropriate form and format so that
9the words “Internet poker” may be printed on the purchaser’s credit
10card statement when a payment to a licensee is made by credit
12(e) If a licensee complies with the requirements of paragraphs
13(1) and (2) of subdivision (d), and a person under 21 years of age
14participates in an authorized Internet poker game provided by the
15licensee, the licensee is not in violation of this section.
16(f) The department may assess civil penalties against a person
17who violates this section, whether a licensee, owner, subcontractor,
18or player, according to the following schedule:
19(1) Not less than one thousand dollars ($1,000) and not more
20than two thousand dollars ($2,000) for the first violation.
21(2) Not less than two thousand five hundred dollars ($2,500)
22and not more than three thousand five hundred dollars ($3,500)
23for the second violation.
24(3) Not less than four thousand dollars ($4,000) and not more
25than five thousand dollars ($5,000) for the third violation.
26(4) Not less than five thousand five hundred dollars ($5,500)
27and not more than six thousand five hundred dollars ($6,500) for
28the fourth violation.
29(5) Ten thousand dollars ($10,000) for a fifth or subsequent
31(g) The commission shall, by regulation, provide a process for
32a licensee to exclude from play any person who has filled out an
33online self-exclusion form.
34(1) The commission shall develop an online self-exclusion form
35within six months of the effective date of this chapter.
36(2) The commission shall deliver the form to each licensee.
37(3) A licensee shall prominently display a link to the
38department’s Responsible Gambling Internet Web page and the
39online self-exclusion form on the Internet Web site that is displayed
40when either of the following occurs:
P26 1(A) A person registers as a registered player.
2(B) Each time a registered player accesses the intrastate Internet
3poker Web site prior to playing.
4(4) A licensee shall retain the online self-exclusion form to
5identify persons who want to be excluded from play. A licensee
6shall exclude those persons from play.
7(5) A licensee that has made commercially reasonable efforts
8to comply with this subdivision shall not be held liable in any way
9if a person who has filled out an online self-exclusion form plays
10despite that person’s request to be excluded.
A licensee shall offer only authorized Internet poker
12games and process bets in accordance with the specified game and
13betting rules established by the licensee and approved by the
14commission pursuant to Sections 19990.14 and 19990.32.
(a) In order to propose a game for play, a licensee
16shall provide the commission with both of the following:
17(1) Game rules and betting rules it proposes to offer to registered
19(2) Documentation relating to development and testing of the
21(b) A licensee shall not offer a game for play until the
22commission has approved the game rules and betting rules.
(a) A licensee shall ensure that games are fair.
24(b) A licensee shall display a link on its Internet poker Web site
25that includes the following information for each game offered:
26(1) The name of the game.
27(2) Any restrictions on play.
28(3) The rules of the game.
29(4) All instructions on how to play.
30(5) The unit and total bets permitted.
31(6) The registered
player’s current account balance, which shall
32be updated in real time.
33(7) Any other information that a licensee determines is necessary
34for the registered player to have in real time to compete fairly in
36(c) Data used to create game results shall be unpredictable so
37that it is infeasible to predict the next occurrence in a game, given
38complete knowledge of the algorithm or hardware generating the
39sequence and all previously generated numbers.
P27 1(d) A licensee shall deploy controls and technology to minimize
2fraud or cheating through collusion, including external exchange
3of information between different players, or any other means.
4(1) If a licensee becomes aware that fraud or cheating is taking
5place or has taken place, it shall take steps to stop those activities
6immediately and inform the department of all relevant facts.
7(2) The department shall not impose a fine against a licensee to
8prevent fraud or cheating if the licensee can demonstrate that it
9acted responsibly to prevent those activities as soon as the licensee
10became aware of them.
11(e) In a per hand game, if the gaming server or software does
12not allow a game to be completed, the game shall be void and all
13funds relating to the incomplete game shall be returned to the
14registered player’s account.
15(f) In a tournament, if the gaming server or software does not
16allow the tournament to be completed, all prize money shall be
17distributed among players in accordance with the procedure
18published by the licensee prior to the commencement of the
20(g) A licensee shall not display or allow the results from any
21authorized Internet poker game, including the redemption of
22winnings from any game, to be displayed or represented through
23any means other than showing the card faces of the winning hand
24and the dollar amount won. No casino game graphics, themes, or
25titles may be used, including, but not limited to, depictions of slot
26machine-style symbols, banked or banking card games, craps,
27roulette, keno, lotto, or bingo.
28(h) A licensee shall not permit the use of robotic play at any
29time by itself, a subcontractor, or a player.
30(i) A licensee shall not permit the use of poker game outcomes
31to be used in a manner that mimics a slot machine or any other
32casino style game.
(a) A licensee shall register players and establish
34player accounts prior to play.
35(b) A person shall not participate in any game provided by a
36licensee unless the person is a registered player and holds an
38(c) Accounts may be established in person, or by United States
39mail, telephone, or by any electronic means.
P28 1(d) To register and establish an account, a person shall provide
2the following registration information:
3(1) First name and surname.
4(2) Principal residence address.
5(3) Telephone number.
6(4) Social security number.
7(5) Identification or certification to prove that person is at least
821 years of age.
9(6) Valid e-mail address.
10(e) A licensee shall provide registered players with the means
11to update the registration information provided to the licensee, and
12shall require that registered players keep registration information
14(f) This section does not prevent a licensee from entering into
15a marketing agreement with a third party, who has been determined
16to be suitable as a subcontractor, to recruit people to become
17registered players if the registration process described in this
18section is under the sole control of the licensee.
(a) A licensee shall provide a means for registered
20players to put funds into a registered player account and transfer
21funds out of that account.
22(b) A registered player shall identify the source of funds to be
23used to put money into the account established once the registration
24process is complete, and a licensee shall provide a means for a
25registered player to transfer money into and out of the player’s
26intrastate Internet poker Web site account.
27(c) At the time of establishing an intrastate Internet poker Web
28site account, a registered player shall designate the bank account
29into which funds from the registered player’s intrastate Internet
30poker Web site account are to be transferred.
31(d) A registered player shall establish only one account on any
32intrastate Internet poker Web site.
33(e) While playing an authorized Internet poker game, the game
34system shall not permit a registered player to increase the amount
35of money that player has available at a game table while a hand is
36in play. Any increase to the funds available to a player during a
37hand shall not take effect until the following hand.
38(f) A licensee shall maintain records on the balance of each
39registered player’s account.
P29 1(g) A licensee shall not permit a registered player to place a
2wager unless the registered player’s account has sufficient funds
3to cover the amount of the wager.
4(h) A licensee
shall not provide credit to a registered player’s
5account or act as agent for a credit provider to facilitate the
6provision of funds.
7(i) No interest shall be paid by a licensee with respect to
8registered player accounts.
9(j) A licensee shall segregate funds it holds in all registered
10player accounts from all of its other assets.
11(k) A licensee shall not commingle funds in the segregated
12account containing funds paid by registered players with any other
13funds held by the licensee, including, but not limited to, operating
14funds of the licensee. Both the accounts of the licensee and its
15segregated registered player accounts shall be held in financial
16institutions located in the state.
17(l) Funds held in a registered player’s account shall only be used
18for the following purposes:
19(1) To pay per hand or tournament charges owed by a registered
20player to the licensee for play of authorized Internet poker games.
21(2) To transfer funds from one registered player’s account to
22the account of another registered player to reconcile the result of
23a loss in the play of an authorized Internet poker game.
24(3) To transfer funds from a registered player’s account to a
25temporary account to be held by a licensee pending the outcome
26of an authorized Internet poker game.
27(4) To remit tax proceeds due and owing from a registered player
28to the Franchise Tax Board.
29(5) To transfer funds from a registered player’s account with
30the licensee to an account specified by that registered player upon
31that registered player’s request.
Prior to completing the registration process, a
33licensee shall explain to the person who is registering in a
34conspicuous fashion the privacy policies of the intrastate Internet
35poker Web site, and the person shall assent to the following
37(a) No personally identifiable information shall be shared with
38any nongovernment third parties except as provided in subdivision
39(j) of Section 19990.41.
P30 1(b) All personally identifiable information about registered
2players shall be shared with state agencies, including, but not
3limited to, the department, the commission, the Franchise Tax
4Board, and the Department of Child Support Services as necessary
5to assist them in fulfilling their obligations.
6(c) Personally identifiable information may be shared with
7government agencies only as set forth in subdivision (b) or subject
8to court order as provided in subdivision (j) of Section 19990.41.
A licensee may require that a registered player, or
A licensee may suspend or revoke the account of a
13registered player for any of the following reasons:
14(a) A person or registered player provided false information to
15the licensee, including, but not limited to, in the registration
17(b) The registered player has not updated registration
18information to keep it current.
19(c) The registered player has violated the intrastate Internet
21(d) The person has already been registered.
22(e) The licensee
suspects that the registered player has
23participated in an illegal or unauthorized activity on the intrastate
24Internet poker Web site.
25(f) The licensee is directed by a state agency to suspend or
26revoke the registered player’s account.
Upon registration, and each time a registered player
28logs into an intrastate Internet poker Web site, the licensee shall
29permit a registered player to adjust his or her play settings to:
30(a) Set a limit on the deposits that can be made per day.
31(b) Set a limit on the aggregate losses in a registered player’s
32account within a specified period of time.
33(c) Set a limit on the amount of time that a registered player can
A licensee shall offer customer support that shall
36be available to registered players 24 hours per day, 365 days a
37year. All employees shall be physically present in the state while
38in contact with registered players. However, the licensee shall have
39discretion to use the expertise of personnel not physically present
40in the state when necessary to comply with this chapter and protect
P31 1registered players and state interests, including, but not limited to,
2for the purposes of diagnosing and addressing technological
3problems, investigating fraud and collusion, and supervising
4software and configuration changes. The licensee shall give notice
5to the commission when using personnel who are out of state.
(a) A licensee shall protect the privacy of registered
7players and their personally identifiable information.
8(b) A licensee shall comply with all applicable state and federal
9privacy and data protection laws.
10(c) At the time of registration with a licensee as a registered
11player, and at least once a year thereafter, a licensee shall provide
12notice in the form of a separate, written statement, delivered via
13the United States Postal Service or electronic mail, to the registered
14player that clearly and conspicuously informs the registered player
15of all of the following:
16(1) The nature of personally identifiable
17or to be collected with respect to the registered player and the
18nature of the use of that information.
19(2) The nature, frequency, and purpose of any disclosure that
20may be made of personally identifiable information, including an
21identification of the types of persons to whom the disclosure may
23(3) The period during which personally identifiable information
24will be maintained by the licensee.
25(4) The times and place at which the registered player may have
26access to personally identifiable information in accordance with
28(5) The limitations provided by this section with respect to the
29collection and disclosure of personally identifiable information by
31(d) A licensee shall not collect personally identifiable
32information concerning any registered player without the prior
33written or electronic consent of the registered player.
34(e) A licensee may collect personally identifiable information
35in order to do both of the following:
36(1) Obtain information necessary to operate the intrastate
37Internet poker Web site and offer authorized Internet poker games
38to registered players pursuant to this chapter.
P32 1(2) Detect unauthorized play, activities contrary to a licensee’s
3to state or federal law.
4(f) Except as provided in subdivision (g), a licensee shall not
5disclose personally identifiable information concerning any
6registered player without the prior written or electronic consent of
7the registered player and shall take actions necessary to prevent
8unauthorized access to that information by a person other than the
9registered player or licensee.
10(g) A licensee may disclose personally identifiable information
11if the disclosure is any of the following:
12(1) Necessary to render, or conduct a legitimate business activity
13related to, the provision of authorized Internet poker games to the
14registered player by the licensee.
15(2) Subject to subdivision (j), made pursuant to a court order
16authorizing the disclosure, if the registered player is notified of
17the order by the person to whom the order is directed.
18(3) A disclosure of the names and
addresses of registered players
19to any tournament third party, if both of the following apply:
20(A) The licensee has provided the registered player the
21opportunity to prohibit or limit the disclosure.
22(B) The disclosure does not reveal, directly or indirectly, the
23 nature of any transaction made by the registered player over the
24intrastate Internet poker Web site.
25(4) A disclosure to the commission to fulfill its obligations under
26this chapter or a state agency as authorized in this chapter.
27(5) A disclosure to persons found suitable under this chapter if
28the registered player is notified and consents to the information
30(h) A registered player shall be provided access to all
31identifiable information regarding that registered player that is
32collected and maintained by a licensee. The information shall be
33made available to the registered player at reasonable times and at
34a place designated by the licensee. A registered player shall be
35provided reasonable opportunity to correct any error in the
37(i) A licensee shall destroy personally identifiable information
38if the information is no longer reasonably necessary for the purpose
39for which it was collected, and there are no pending requests or
40orders for access to the information under subdivision (j).
P33 1(j) Except as provided in subdivision (g), a governmental or
2nongovernmental third party may obtain personally identifiable
3information concerning a registered player pursuant to a court
4order only if, in the court proceeding relevant to the court order,
5both of the following apply:
6(1) The third party offers clear and convincing evidence that
7the subject of the information is reasonably suspected of engaging
8in criminal activity or otherwise relevant to a pending civil action
9and that the information sought would be material evidence in the
11(2) The registered player about whom the information is
12requested is afforded the opportunity to appear and contest the
A licensee shall establish a book of accounts and
15regularly audit all of its financial records and reports, which shall,
16at a minimum, include all of the following:
17(a) Monthly auditable and aggregate financial statements of
19(b) Monthly calculation of all amounts payable to the state.
20(c) The identity of registered players.
21(d) The balance on each registered player’s account at the start
22of a session of play, the amount won or lost by each registered
23player during a game, and the balance on the registered player’s
25(e) The wagers placed on each game, time stamped by the games
27(f) The result of each game, time stamped by the games server.
28(g) The amount, if any, as determined by the registered player,
29withheld from winnings for federal or state income tax purposes.
(a) A licensee shall make all financial records
31established and maintained pursuant to Section 19990.42,
32including, but not limited to, all books, records, documents,
33financial information, and financial reports, available on an
34electronic basis, as required by the commission or other state
35agencies so that those state agencies can fulfill their responsibilities
36under this chapter. A state agency may request specific printed
37hard copies of records for good cause.
38(b) The licensee’s data shall be retained in a manner by which
39it may be accessed online by a state agency with responsibilities
P34 1under this chapter. The commission shall identify which state
2agencies require online access.
3(c) Notwithstanding subdivision (b), data covered by
4subdivisions (d), (e), and (f) of Section 19990.42, shall be
5accessible to the state agencies online for 120 days, and, thereafter,
6archived and retained for one year.
(a) A licensee shall implement technical systems
8that materially aid the commission in the protection of registered
9players. Software shall meet, at a minimum, international industry
10standards as verified by a commission-approved gaming laboratory.
11(b) A licensee shall define and document its methodology for
12developing software and applications and describe the manner in
13which software protects registered players from fraud and other
14risks in the play of authorized Internet poker games and in the
15management of registered player accounts.
16(c) A licensee shall meet minimum game server connectivity
17requirements to ensure that registered players are protected from
18losses due to connectivity problems.
19(d) A licensee shall ensure that all transactions involving
20registered players’ funds shall be recoverable by the system in the
21event of a failure or malfunction.
22(e) All information required for reviewing a game interrupted
23due to loss of connectivity shall be recoverable by the licensee.
24(f) Preventative and detective controls addressing money
25laundering and fraud risks shall be documented and implemented
26by the licensee.
(a) A licensee may charge registered players to play
28in authorized Internet poker games.
29(b) Per hand charges are permitted.
30(1) A per hand charge shall be designated and conspicuously
31posted on the intrastate Internet poker Web site.
32(2) A licensee may vary the per hand charges to registered
33players based on betting limits or other factors.
34(c) Tournament charges shall be permitted.
35(1) A tournament charge shall be designated and conspicuously
36posted on the intrastate Internet poker Web site.
37(2) A licensee may vary tournament charges based on
38tournament prizes or other factors.
39(d) A licensee shall provide notice to the commission of the
40charges to registered players prior to initiating play.
A licensee may do any of the following:
2(a) Enter into an agreement with any third party to sponsor or
3underwrite prizes for a tournament, subject to the approval of the
4commission and, if applicable, the tribal gaming regulatory
6(b) Enter into an agreement to sell advertisement space on any
7Internet Web site it controls.
8(c) Enter into an agreement with a third-party subcontractor for
9marketing, or any other purpose consistent with this chapter,
10including, but not limited to, displaying the name of a marketing
11partner on a screen viewed by a registered player. However, a
12licensee shall not utilize any brand or business name, including
13any derivative brand name with the same or similar wording, or
14any trade or service mark, software, technology, operational
15system, customer information, or other data acquired, derived, or
16developed directly or indirectly from any operation that has
17accepted a wager from any person in California on any form of
18Internet gaming prior to ___. To the extent any business
19relationships or financial arrangements were utilized or existed to
20further illegal Internet gambling, those relationships and
21arrangements shall be discontinued.
22(d) Enable a chat function between registered players if it has
23in place effective controls against collusion.
24(e) Post Internet Web links on the Internet Web sites it controls
25to permit registered players to access remote Internet Web sites.
26However, each licensee is limited to ___ Internet poker Web site
27for which ___ which it may offer Internet poker to registered
29(f) Enter into contractual agreements with one or more licensees
30for the purpose of ensuring adequate player liquidity.
(a) In support of the application for a license
32pursuant to this chapter, the licensee shall remit to the Treasurer
33a one-time license fee in the amount of five million ($5,000,000),
34to be deposited into the General Fund, and credited against charges
35imposed pursuant to subdivision (b) on the licensee’s gross gaming
36revenues. Upon depletion of the license fee, the commission shall
37notify the licensee to commence quarterly payments to the state
38in accordance with subdivision (b).
39(b) In consideration of the substantial value of each license, a
40licensee shall remit to the Treasurer on a quarterly basis for deposit
P36 1in the General Fund an amount equal to 5 percent of its gross
3(1) Each quarterly payment shall be due on the 10th day of the
4month following the end of each quarter.
5(2) A licensee shall make all electronic and written financial
6records available to the Treasurer, the commission, and the
7department on an electronic basis.
8(c) Each licensee shall pay a regulatory fee, to be deposited in
9the Internet Poker Fund, in an amount, not to exceed ____ ($____)
10per year, to be determined by the commission for the reasonable
11costs of license oversight, consumer protection, state regulation,
12problem gambling programs, and other purposes related to this
(a) The licensee shall facilitate the collection of
15personal income taxes from registered players by the Franchise
16Tax Board and shall be responsible for providing current and
17accurate documentation on a timely basis to all state agencies, as
18provided in this chapter.
19(b) The state and its agencies shall treat the proprietary
20information provided by a licensee as confidential to protect the
21licensee and to protect the security of the intrastate Internet poker
23(c) The confidentiality provisions of this chapter exempt
24proprietary information supplied by a licensee to a state agency
25from public disclosure consistent with subdivision (b) of Section
266253 of the Government Code.
(a) A licensee shall act expeditiously to cure any
28violation of this chapter, or any violation of a regulation adopted
29pursuant to this chapter, in the offer or administration of authorized
30Internet poker games that interferes with its obligations to the state
31or registered players under this chapter.
32(b) If a licensee becomes aware of any violation, it shall notify
33the commission immediately and work with the commission to
34develop a plan to rectify the violation.
35(c) If the commission becomes aware of any violation, or if it
36becomes aware of any activities that might lead to a violation, the
37commission shall provide notice of that violation to the licensee
38and a reasonable opportunity to cure the violation, before referring
39the matter to the department for investigation and possible
P37 1(d) All state agencies with responsibilities under this chapter
2shall report any actual or suspected violation of this chapter, or
3any regulation adopted pursuant to this chapter, or activities that
4may lead to a violation, to the department immediately so that the
5department can assess whether it needs to commence an
6investigation or enforcement action.
7(e) A licensee shall be afforded a reasonable time period to cure
8any reported violation.
9(f) The department shall have subpoena power in an
10investigation of any violation of this chapter, or any regulation
11adopted pursuant to this chapter.
12(g) The department may revoke or suspend
any license or work
13permit under this chapter upon reaching a finding that the licensee
14or employee is in violation of any provision of this chapter, or any
15regulation adopted pursuant to this chapter. However, a tribal
16licensee shall not have its license suspended or revoked, or be
17fined or otherwise penalized, for complying with any applicable
18federal law or regulation when operating an Internet poker Web
19site on Indian lands. To the extent that any state requirement is
20more strict than any applicable federal requirement, the tribal
21licensee shall comply with the more strict state requirement unless
22the federal requirement preempts state law.
23(h) A licensee may appeal any decision of the department
24pursuant to this section to the superior court. The superior court
25shall hear any appeal de novo.
26(i) The department shall protect the rights and assets of
27registered players on an intrastate Internet poker Web site if the
28licensee’s license pursuant to this chapter is revoked or the licensee
(a) A license issued pursuant to this chapter is not
31transferable. To the extent a licensee seeks to change ownership
32of its land-based gaming facility, the license held by the licensee
33shall be rendered void upon the date of any change of ownership
34in the land-based gaming facility. In anticipation of a change in
35ownership, the acquiring person shall apply for a license in
36advance, at which point the commission shall determine whether
37the applicant is legally qualified to be a licensee under this chapter.
38(b) The commission shall investigate to ensure that any person
39acquiring an interest in a licensee is suitable and otherwise
40financially, technically, and legally qualified to be a licensee
P38 1pursuant to this chapter. If an acquiring person is found to be
2unsuitable to be a licensee, or otherwise not financially, technically,
3or legally qualified to be a licensee, the licensee or the acquiring
4person may challenge that determination.
All facilities, software, including downloadable
6programs, and any other property, both tangible and intangible,
7used by the licensee in offering authorized Internet poker games
8for play on an intrastate Internet poker Web site shall be the
9property of the licensee or its subcontractors, and shall be subject
10to the approval of the commission.
If any dispute arises between the state and the
12licensee, either the commission or a licensee may file an action in
13the superior court of any county in which the commission has an
14office for an interpretation of the rights and responsibilities of the
15state and the licensee pursuant to this chapter.
(a) A licensee shall apply to the commission and,
20if applicable, the tribal regulatory authority, for an employee work
21permit on behalf of each employee.
22(b) Prior to initiating operations and thereafter, a licensee shall
23ensure that every employee has been issued an employee work
24permit by the commission and, if applicable, the tribal gaming
25regulatory authority, prior to that person having access to the
26licensee’s facilities. The permit shall be renewed every two years.
27(c) An employee work permit shall not be issued unless, based
28on all of the information and documents submitted, the commission
29and, if applicable, the tribal gaming regulatory authority is satisfied
30that the applicant is, at a minimum, all of the following:
31(1) A person of good character, honesty, and integrity.
32(2) A person whose prior activities, criminal record, if any,
33reputation, habits, and associations do not pose a threat to the
34integrity of a gaming operation or public interest of this state, or
35to the effective regulation and control of controlled gambling, or
36create or enhance the dangers of unsuitable, unfair, or illegal
37practices, methods, and activities in the conduct of controlled
38gambling or in the carrying on of incidental business and financial
P39 1(3) A person who is in all other respects qualified to hold an
2employee work permit as provided in this chapter.
3(d) An employee work permit shall not be issued unless the
4 applicant meets the qualification standards adopted by the
5commission. A tribal gaming regulatory authority may impose
6additional qualifications with respect to activities on Indian lands.
An applicant for an employee work permit is
8disqualified for any of the following reasons:
9(a) Failure of the applicant to clearly establish eligibility and
10qualification in accordance with this chapter.
11(b) Failure of the applicant to provide timely information,
12documentation, and assurances required by this chapter or requested
13by any state official, failure of the applicant to reveal any fact
14material to the qualification, or the supplying of information that
15is untrue or misleading as to a material fact pertaining to the
17(c) Conviction of a felony, including a conviction by a federal
18court, a court in another state, or a court in another country, for a
19crime that would constitute a felony if committed in California.
20(d) Conviction of the applicant for any misdemeanor involving
21dishonesty or moral turpitude within the 10-year period
22immediately preceding the submission of the application, unless
23the applicant has been granted relief pursuant to Section 1203.4,
241203.4a, or 1203.45 of the Penal Code. However, the granting of
25relief pursuant to Section 1203.4, 1203.4a, or 1203.45 of the Penal
26Code shall not constitute a limitation on the discretion of the
27department or affect the applicant’s burden under subdivision (b).
28(e) Association of the applicant with criminal profiteering
29activity or organized crime, as defined by Section 186.2 of the
31(f) Contemptuous defiance by the applicant of any legislative
32 investigative body, or other official investigative body of any state
33or of the United States, when that body is engaged in the
34investigation of crimes relating to gambling, official corruption
35related to gambling activities, or criminal profiteering activity or
36organized crime, as defined by Section 186.2 of the Penal Code.
37(g) The applicant is less than 21 years of age.
The commission and, if applicable, the tribal gaming
39regulatory authority shall establish fees to be paid by a licensee
40for the reasonable cost of background investigation on employee
P40 1work permit applications. The commission shall establish processes
2for the revocation or suspension of an intrastate Internet poker
3license or employee work permit, and to withdraw an application
4for an intrastate Internet poker license or employee work permit.
5These processes shall also be followed by the tribal gaming
6regulatory authority with respect to activities on Indian lands.
(a) A licensee or subcontractor of a licensee shall
8not enter into, without prior approval of the commission and, if
9applicable, the tribal gaming regulatory authority, a contract or
10agreement with a person who is denied a gambling license or
11employee work permit pursuant to Chapter 5 (commencing with
12Section 19800), or whose gambling license or employee work
13permit is suspended or revoked by the department or tribal gaming
14regulatory authority, or with any business enterprise under the
15control of that person, after the date of receipt of notice of the
16action of the department or tribal gaming regulatory authority.
17(b) A licensee or subcontractor of a licensee shall not enter into
18a contract or agreement with a person or entity that has accepted
19a wager from any person in California on any form of Internet
20gaming prior to ___, or has been the holder of a direct or indirect
21financial interest in a person or entity that has accepted that wager.
(a) A licensee or subcontractor of a licensee shall
23not employ, without prior approval of the commission and, if
24applicable, the tribal gaming regulatory authority, a person in any
25capacity for which he or she is required to have an employee work
26permit, if the person has been denied a gambling license or an
27employee work permit pursuant to Chapter 5 (commencing with
28Section 19800), or if his or her gambling license or employee work
29permit has been suspended or revoked after the date of receipt of
30notice of the action by the commission or tribal gaming regulatory
31authority. A licensee or subcontractor of a licensee shall not enter
32into a contract or agreement with a person whose application for
33a gambling license or an employee work permit has been
34withdrawn with prejudice, or with a business enterprise under the
35control of that person, for the period of time during which the
36person is prohibited from filing a new application for a gambling
37license or an employee work permit.
38(b) (1) If an employee who is required to hold an employee
39work permit pursuant to this chapter is denied an employee work
40permit, or has his or her employee work permit revoked by the
P41 1commission or tribal gaming regulatory authority, the employee
2shall be terminated immediately in all capacities. Upon notifying
3the licensee of the action of the commission or tribal gaming
4regulatory authority, the employee shall have no further
5involvement in the gambling operation.
6(2) If an employee who is required to hold an employee work
7permit pursuant to this chapter has his or her employee work permit
8suspended, the employee shall be suspended in all capacities. Upon
9notifying the licensee of the action of the commission or tribal
10gaming regulatory authority, the employee shall not be permitted
11to have any involvement in the gambling operation during the
12period of suspension.
13(3) A licensee or subcontractor of a licensee shall not designate
14another employee to replace the employee whose employment was
15terminated or suspended, unless the other employee has an existing
17(c) A licensee or subcontractor of a licensee shall not pay to a
18person whose employment has been terminated or suspended
19pursuant to subdivision (b) any remuneration for any service
20performed in any capacity in which the person is required to hold
21an employee work permit, except for amounts due for services
22rendered before the date of receipt of notice of the action of the
23department or tribal gaming regulatory authority.
24(d) Except as provided in subdivision (b), a contract or
25agreement for the provision of services or property to a licensee
26or subcontractor or for the conduct of any activity pertaining to
27the operation of an intrastate Internet poker Web site, that is to be
28performed by a person required by this chapter, or by regulations
29adopted pursuant to this chapter, to hold an employee work permit,
30shall be terminated upon a suspension or revocation of the person’s
31employee work permit.
32(e) In a case in which a contract or agreement for the provision
33of services or property to a licensee or an affiliate thereof, or for
34the conduct of any activity at an intrastate Internet poker Web site,
35is to be performed by a person required by this chapter or by
36regulations adopted by the department to hold an employee work
37permit, the contract shall be deemed to include a provision for its
38termination without liability on the part of the licensee, affiliate,
39or subcontractor upon a suspension or revocation of the person’s
40employee work permit. In any action brought by the commission
P42 1to terminate a contract pursuant to subdivision (d) or this
2subdivision, it shall not be a defense that the agreement does not
3expressly include the provision described in this subdivision, and
4the lack of express inclusion of the provision in the agreement
5shall not be a basis for enforcement of the contract by a party
A licensee shall use its best efforts to protect
11registered players. Subject to the approval of the commission, and
12consistent with uniform standards established by the commission
13by regulation, each licensee shall establish administrative
14procedures to resolve registered player complaints.
(a) If a registered player has a complaint against a
16licensee, the exclusive remedy shall be to register the complaint
17with the commission.
18(b) The commission, in consultation with the department, shall
19establish regulations with respect to registered player complaints.
20(c) Under the regulations, the commission shall do all of the
22(1) Investigate registered player complaints to determine if a
23licensee has failed to meet its obligations to a registered player.
24(2) Attempt to resolve complaints by registered players if a
25licensee fails to meet an obligation to a registered player.
26(3) Initiate enforcement actions to require specific performance
27of any obligation that the commission has determined a licensee
28has failed to fulfill with respect to a registered player.
29(d) A licensee may appeal any action by the commission
30pursuant to this article to the superior court, which shall review
31the appeal de novo.
The Treasurer shall transfer all amounts received
37from a licensee pursuant to subdivision (d) of Section 19990.22
38and subdivision (c) of Section 19990.47 to the Controller for
39deposit in the Internet Poker Fund, which is created in the State
40Treasury, to be administered by the department. Notwithstanding
P43 1Section 13340 of the Government Code, all moneys in the fund
2are continuously appropriated to the department and the
3commission, without regard to fiscal years, in the amounts
4necessary for the department and the commission to perform their
5duties under Sections 19990.22 and 19990.23, and subdivision (c)
6of Section 19990.47.
(a) The state agencies shall submit revenue needs
8to fulfill their obligations under this chapter for the upcoming fiscal
9year to the Senate Committee on Budget and Fiscal Review and
10the Assembly Committee on Budget, as well as the Senate and
11Assembly Committees on Governmental Organization and the
12Department of Finance on or before March 31 of the preceding
13fiscal year. A justification of those costs shall be provided with
14each submission of revenue needs.
15(b) The State Department of Alcohol and Drug Programs, Office
16of Problem Gambling, shall submit revenue needs for programs
17to alleviate problem gambling that results from the offering of
18authorized Internet poker games for the upcoming fiscal year to
19the Senate Committee on Budget and Fiscal Review and the
20Assembly Committee on Budget, as well as the Senate and
21Assembly Committees on Governmental Organization, the Senate
22and Assembly Committees on Human Services, and the Department
23of Finance on or before March 31 of the preceding fiscal year. A
24justification of those costs shall be provided with each submission
25of revenue needs.
26(c) With the exception of funding paid into the Unlawful
27Gambling Enforcement Fund, as set forth in this article, all
28remaining proceeds not allocated pursuant to subdivisions (a) and
29(b) shall remain in the Internet Poker Fund subject to appropriation
30by the Legislature.
The Unlawful Gambling Enforcement Fund is hereby
32established as a special fund within the General Fund for purposes
33of ensuring adequate resources for law enforcement charged with
34enforcing the prohibitions and protections of this chapter. The fund
35shall be funded by depositing ____ percent of the revenue from
36the civil penalties recovered by law enforcement authorities
37pursuant to Section 19990.78 into the fund prior to the distribution
38required under subdivision (c) of Section 19990.78. Up to ____
39million dollars ($____) in the fund may be expended annually by
P44 1the Attorney General, upon appropriation by the Legislature, for
2the purposes of this chapter.
(a) A person who engages or conspires to engage
4in activities prohibited by this chapter, or by Section 321, 322,
5323, 324, 326, 330, 330a, 330b, 330c, 330d, 330.1, 330.4, or 331
6of the Penal Code, is liable for a civil penalty not to exceed ____
7dollars ($____) for each violation, in addition to any other penalty
8or remedy that may be imposed by law, which shall be assessed
9and recovered in a civil action brought in the name of the people
10of the State of California by the Attorney General, a district
11attorney, a county counsel authorized by agreement with the district
12attorney in an action involving the violation of a county ordinance,
13the city attorney of a city having a population in excess of 750,000
14persons, the city attorney of a city and county, or, with the consent
15of the district attorney, the city prosecutor in a city with a full-time
16city prosecutor, in a court of competent jurisdiction.
17(b) The court shall impose a civil penalty for each violation of
18this chapter and each violation of Section 321, 322, 323, 324, 326,
19330, 330a, 330b, 330c, 330d, 330.1, 330.4, or 331 of the Penal
20Code. In determining the amount of the civil penalty, the court
21shall consider any relevant circumstance presented by a party to
22the case, including, but not limited to, any of the following:
23(1) The nature and seriousness of the misconduct.
24(2) The number of violations.
25(3) The persistence of the misconduct.
26(4) The length of time over which the misconduct occurred.
27(5) The willfulness of the defendant’s misconduct.
28(6) The defendant’s assets, liabilities, and net worth.
29(c) (1) Civil penalties recovered by law enforcement authorities
30pursuant to this section shall be allocated as follows:
31(A) If the action is brought by the Attorney General, one-half
32of the penalty collected shall be paid to the treasurer of the county
33in which the judgment was entered for deposit into that county’s
34general fund, and one-half to the Treasurer for deposit into the
35Unlawful Gambling Enforcement Fund.
36(B) If the action is brought by a district attorney or county
37counsel, the penalty collected shall be paid to the treasurer of the
38county in which the judgment was entered for deposit into that
39county’s general fund.
P45 1(C) If the action is brought by a city attorney or city prosecutor,
2one-half of the penalty collected shall be paid to the treasurer of
3the city in which the judgment was entered for deposit into that
4city’s general fund, and one-half to the treasurer of the county in
5which judgment was entered for deposit into that county’s general
6fund. If the action is brought by the city attorney of a city and
7county, the entire amount of the penalty collected shall be paid to
8the treasurer of the city and county in which the judgment was
10(2) The revenue from all civil penalties allocated pursuant to
11subparagraph (A) of paragraph (1), upon appropriation by the
12Legislature, shall be used by the Attorney General exclusively to
13support the investigation and enforcement of violations of
14California’s gambling laws, including the implementation of
15judgments obtained from prosecution and investigation of those
16violations and other activities that are in furtherance of this chapter
17and Sections 321, 322, 323, 324, 326, 330, 330a, 330b, 330c, 330d,
18330.1, 330.4, and 331 of the Penal Code.
19(3) The revenue from all civil penalties allocated pursuant to
20subparagraphs (B) and (C) of paragraph (1) shall be for the
21exclusive use of the district attorney, the county counsel, the city
22attorney, or the city prosecutor, whichever is applicable, for the
23enforcement of this chapter and existing laws prohibiting illegal
A city, county, or city and county shall not regulate,
29tax, or enter into a contract with respect to any matter related to
30this chapter. This section shall not prohibit or limit the investigation
31and prosecution of any violation of this chapter.
Notwithstanding Section 10231.5 of the Government
36Code, within one year of the operative date of this chapter, and
37annually thereafter, the commission, in consultation with the
38department, the Treasurer, and the Franchise Tax Board, shall issue
39a report to the Legislature describing the state’s efforts to meet the
40policy goals articulated in this chapter. The report shall be
P46 1submitted in compliance with Section 9795 of the Government
(a) At least four years after the issue date of any
4license pursuant to this chapter, but no later than five years after
5that date, the Bureau of State Audits shall issue a report to the
6Legislature detailing the implementation of this chapter.
7(b) A report submitted pursuant to subdivision (a) shall be
8submitted in compliance with Section 9795 of the Government
10(c) Pursuant to Section 10231.5 of the Government Code, this
11section is repealed four years after the date on which this chapter
The provisions of this act are not severable. If any
17provision of this act or the application thereof to any person or
18circumstances is held invalid, the entire act shall be invalid.
Section 330d is added to the Penal Code, to read:
(a) An “electronic sweepstakes device” is a slot machine
21or device within the meaning of Section 330b, and is subject to
23(b) For the purposes of this section, an “electronic sweepstakes
24device” is a computer or other mechanically or electronically
25operated machine or device, or network of machines or devices,
26that is capable of displaying information on a screen or other
27mechanism, and that is intended to be used at least in part for the
28purpose of conducting or promoting a sweepstakes through the
29use of an entertaining display, including the entry process or the
30reveal of a prize, regardless of whether that computer, machine,
31device, or network also serves other purposes, such as Internet
32access, and regardless of whether consideration is required in order
33to enter the sweepstakes or to operate the device in connection
34with the conduct or promotion of the sweepstakes.
35(c) For the purposes of this section, “entertaining display” means
36a video or mechanical representation of the outcome of the
37sweepstakes, including, but not limited to, video or mechanical
38reels or other casino game themes.
39(d) For the purposes of this section, a “sweepstakes” is defined
40as a game, advertising scheme or plan, or other promotion
P47 1conducted in connection with the sale of a consumer product, with
2or without payment of consideration, that a person may enter to
3win or become eligible to receive a prize of money, credit,
4allowance, or thing of value, or that may be given in trade, the
5determination of which is based upon skill or chance, or both, and
6regardless of the point at which the prize is determined.
The Legislature finds and declares that Chapter 5.2
8(commencing with Section 19990.01) of Division 8 of the Business
9and Professions Code, as added by this act, imposes a limitation
10on the public’s right of access to the meetings of public bodies or
11the writings of public officials and agencies within the meaning
12of Section 3 of Article I of the California Constitution. Pursuant
13to that constitutional provision, the Legislature makes the following
14findings to demonstrate the interest protected by this limitation
15and the need for protecting that interest:
16The limitations on the people’s rights of access set forth in this
17chapter are necessary to protect the privacy and integrity of
18information submitted by the registered players as well as the
19proprietary information of the license applicants and licensees.
No reimbursement is required by this act pursuant to
21Section 6 of Article XIII B of the California Constitution because
22the only costs that may be incurred by a local agency or school
23district will be incurred because this act creates a new crime or
24infraction, eliminates a crime or infraction, or changes the penalty
25for a crime or infraction, within the meaning of Section 17556 of
26the Government Code, or changes the definition of a crime within
27the meaning of Section 6 of Article XIII B of the California
This act is an urgency statute necessary for the
30immediate preservation of the public peace, health, or safety within
31the meaning of Article IV of the Constitution and shall go into
32immediate effect. The facts constituting the necessity are:
33In order to protect the interests of Californians who play online
34gambling games and to ensure that people play fair games, that
35the state realizes the revenues, and that suitable persons operate
36intrastate Internet poker Web sites, it is necessary that this act take