Senate BillNo. 190


Introduced by Senator Wright

February 7, 2013


An act to add Chapter 4.7 (commencing with Section 19750) to Division 8 of the Business and Professions Code, and to amend Sections 336.9 and 337a of the Penal Code, relating to gambling, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 190, as introduced, Wright. Gambling: sports wagering.

(1) The California Constitution prohibits various gaming activities within the state, including casino-style gaming, but authorizes the Governor, subject to ratification by the Legislature, to negotiate and conclude compacts for the operation of slot machines and the conduct of lottery games and banking and percentage card games by federally recognized Indian tribes on Indian lands in California in accordance with federal law. The California Constitution also authorizes the Legislature to provide for the regulation of horse racing, charitable bingo games, the California State Lottery, and charitable raffles.

Existing law prohibits a person, whether or not for gain, hire, or reward, from making a betting pool or placing a bet or wager on the result of any contest or event, including a sporting event, as specified.

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. Existing law provides for the enforcement of those regulations by the Department of Justice. Any violation of these provisions is punishable as a misdemeanor, as specified.

The Horse Racing Law provides for the licensure of every person who participates in, or has anything to do with, the racing of horses, and every employee of a parimutuel department by the California Horse Racing Board. The board is responsible for adopting rules and regulations for the protection of the public, the control of horse racing, and parimutuel wagering, as well as enforcing all laws, rules, and regulations dealing with horse racing and parimutuel wagering. The law permits the board to authorize an association licensed to conduct a racing meeting to also operate a satellite wagering facility at its racetrack inclosure, and for fairs to locate a satellite wagering facility at their fairgrounds, under specified conditions. Any violation of these provisions is punishable as a misdemeanor.

This bill would authorize the owner or operator of a gambling establishment, or the owner or operator of a horse racing track, including a horse racing association, or of a satellite wagering facility, with a current license, to conduct wagering on professional and collegiate sports or athletic events, other than on collegiate sports or athletic events that take place in California or in which any California college team participates, by applying to the California Gambling Control Commission or the California Horse Racing Board, as specified, for authorization to conduct sports wagering, and by paying an annual fee for deposit in the Gambling Addiction Program Fund. The bill would require each licensed entity to remit to the treasurer on a monthly basis for deposit in the general fund, an amount equal to 7.5% of its gross revenues. The bill would require the commission, the board, and the department to adopt regulations to implement these provisions, including authority to adopt regulations establishing fees in a reasonable amount to recover costs incurred performing their duties pursuant to these provisions.

The bill would require the department, among other things, to investigate any request made by the board or the commission in connection with an application for authorization, and to investigate suspected violations of the above provisions. The bill would authorize the board, commission, and department to regulate sports wagering to the same extent these entities currently regulate other legal gambling in this state, including the ability to audit the books and records of a licensed entity. The bill would also prohibit a licensed entity from, among other things, accepting a wager from any person who is under 21 years of age or whose name appears on a self-exclusion list. Any violation of these provisions would be punishable as a crime. By creating a new crime, the bill would impose a state-mandated local program.

(2) Existing federal law, the Indian Gaming Regulatory Act of 1988, provides for the negotiation and execution of tribal-state gaming compacts for the purpose of authorizing certain types of gaming on Indian lands within a state. The California Constitution authorizes the Governor to negotiate and conclude compacts, subject to ratification by the Legislature. Existing law expressly ratifies a number of tribal-state gaming compacts, and amendments of tribal-state gaming compacts, between the State of California and specified Indian tribes.

This bill would authorize a federally recognized Indian tribe that is not a gambling establishment or a horse racing track to conduct sports wagering consistent with the requirements of the federal Indian Gaming Regulatory Act of 1988, and under terms no more stringent than those applicable to any other owner or operator in the state.

(3) 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.

(4) This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P3    1

SECTION 1.  

Chapter 4.7 (commencing with Section 19750)
2is added to Division 8 of the Business and Professions Code, to
3read:

4 

5Chapter  4.7. Sports Wagering
6

 

7

19750.  

The following entities may conduct wagering on sports
8events as authorized pursuant to this chapter:

9(a) The owner or operator of a gambling establishment with a
10current license issued by the California Gambling Control
11Commission pursuant to Chapter 5 (commencing with Section
1219800).

P4    1(b) The owner or operator of a horse racing track, including a
2horse racing association, or of a satellite wagering facility, with a
3current license issued by the California Horse Racing Board
4pursuant to Chapter 4 (commencing with Section 19400). A
5licensed horse racing track is authorized to conduct sports wagering
6pursuant to this subdivision if it has an agreement in place with
7the organization recognized by the board that is responsible for
8negotiating purse agreements, satellite wagering agreements, and
9all other business agreements on behalf of the horsemen and
10horsewomen participating in a racing meeting.

11(c) A federally recognized Indian tribe that is not authorized
12pursuant to subdivision (a) or (b) may conduct sports wagering as
13authorized by the federal Indian Gaming Regulatory Act of 1988
14(18 U.S.C. Secs. 1166 to 1168, incl., and 25 U.S.C. Sec. 2701 et
15seq.), and under terms no more stringent than those applicable to
16any other owner or operator of a gambling establishment in the
17state.

18

19752.  

As used in this chapter, the following definitions apply:

19(a) “Board” means the California Horse Racing Board.

20(b) “Commission” means the California Gambling Control
21Commission.

22(c) “Department” means the Department of Justice.

23(d) “Licensed operator” means any of the entities listed in
24Section 19750 that is authorized pursuant to this chapter to conduct
25sports wagering.

26(e) “Prohibited sports event” means any collegiate sport or
27athletic event that takes place in California, or a sports event in
28which any California college team participates, regardless of the
29location at which the event takes place.

30(f) “Sports event” shall include any professional sports or
31athletic event, and any collegiate sports or athletic event, except
32a prohibited sports event.

33(g) “Sports wagering” means the business of accepting wagers
34on a sports event by any legal system or method of wagering,
35including, but not limited to, exchange wagering, parlays, over
36and under, money line, and straight bets.

37

19754.  

(a) (1) An owner or operator of a gambling
38establishment seeking to conduct sports wagering shall apply to
39the commission for authorization to conduct sports wagering.

P5    1(2) An owner or operator of a horse racing track or satellite
2wagering facility seeking to conduct sports wagering shall apply
3to the board for authorization to conduct sports wagering.

4(b) The board or the commission, as the case may be, shall hear
5and decide promptly, and in reasonable order, all applications to
6conduct sports wagering from owners and operators of licensed
7gambling establishments, licensed horse racing tracks, and satellite
8wagering facilities. Authorization to conduct sports wagering shall
9not be unreasonably withheld for any applicant that is in good
10standing and has a current license issued pursuant to Chapter 4
11(commencing with Section 19400) or Chapter 5 (commencing with
12Section 19800).

13(c) An owner or operator of a gambling establishment and an
14owner or operator of a horse racing track or satellite wagering
15facility that conducts sports wagering shall pay an annual fee of
16three thousand dollars ($3,000) to the State Department of Alcohol
17and Drug Programs for deposit in the Gambling Addiction Program
18Fund.

19(d) Each licensed operator shall remit to the treasurer on a
20monthly basis for deposit in the general fund an amount equal to
217.5 percent of its gross revenues. Each monthly payment shall be
22due on the 10th day of the following month. For the purposes of
23determining gross revenues, the licensed operator and the treasurer
24shall use generally accepted accounting principles.

25

19756.  

(a) Application for authorization to conduct sports
26wagering shall be made on forms furnished by the board and the
27commission.

28(b) The application for authorization to conduct sports wagering
29shall include all of the following:

30(1) The name of the licensee.

31(2) The name and location of the gambling establishment, horse
32racing track, or satellite wagering facility.

33(3) The names of all persons directly or indirectly interested in
34the business and the nature of the interest.

35(4) A description of the proposed sports wagering operation.

36(5) Any other information and details the board or the
37commission may require in order to discharge its duty properly.

38

19758.  

The board and the commission shall adopt regulations
39for the administration of this chapter, and may adopt regulations
40establishing fees in a reasonable amount necessary to recover costs
P6    1incurred by the board or the commission relating to the
2administration of this chapter. The board and the commission shall
3consult with each other in the adoption of regulations pursuant to
4this section, and may adopt joint regulations.

5

19760.  

The regulations adopted by the board and the
6commission shall do all of the following:

7(a) Provide for the approval of wagering rules and equipment
8by the department to ensure fairness to the public and compliance
9with state law, including, but not limited to, all of the following:

10(1) Acceptance of wagers on a series of sports events.

11(2) Types of wagering tickets that may be used.

12(3) The method of issuing tickets.

13(b) Govern all of the following:

14(1) The extension of credit.

15(2) The cashing, deposit, and redemption of checks or other
16negotiable instruments.

17(3) The amount of cash reserves to be maintained by licensed
18operators to cover winning wagers.

19(4) The provision of reliable records, accounts, and reports of
20transactions, operations, and events, the method of accounting to
21be used by licensed operators, and the types of records required
22to be maintained.

23

19762.  

The sports wagering authorized pursuant to this chapter
24may be conducted only at the gambling establishment, horse racing
25track, or satellite wagering facility of the licensed operator, or on
26Indian lands consistent with the federal Indian Gaming Regulatory
27Act of 1988 (18 U.S.C. Secs. 1166 to 1168, incl., and 25 U.S.C.
28Sec. 2701 et seq.).

29

19764.  

A licensed operator shall not do any of the following:

30(a) Accept a wager on a sports event from any person who is
31not physically present at the facility where the sports wagering is
32conducted.

33(b) Accept a wager from a person using any form of credit to
34place the wager.

35(c) Accept a wager from a person who is under 21 years of age.

36(d) Admit into the sports wagering facility, or accept wagers
37from, any person whose name appears on any self-exclusion list.

38

19766.  

A licensed operator shall establish the odds it will pay
39on wagers placed on sports events.

P7    1

19768.  

(a) A licensed operator shall not conduct any sports
2wagering in violation of any provision of this chapter, any
3regulation adopted pursuant to this chapter, or any governing local
4ordinance.

5(b) Any person who willfully violates any provision of this
6chapter is guilty of a misdemeanor.

7

19770.  

(a) The department shall have all of the following
8 responsibilities:

9(1) To investigate any request made by the board or the
10commission in connection with an application for authorization
11pursuant to this chapter. The department may recommend the
12denial or the limitation, conditioning, or restriction of any
13authorization.

14(2) To monitor the conduct of all licensed operators and other
15persons having a material involvement, directly or indirectly, with
16a sports wagering operation.

17(3) To investigate suspected violations of this chapter.

18(4) To investigate complaints that are lodged against licensed
19operators, or other persons associated with a sports wagering
20operation, by members of the public.

21(5) To initiate, when appropriate, disciplinary actions. In
22connection with any disciplinary action, the department may seek
23restriction, limitation, suspension, or revocation of any license,
24permit, authorization, or approval pursuant to this chapter, Chapter
254 (commencing with Section 19400), or Chapter 5 (commencing
26with Section 19800), or the imposition of any fine upon any person
27licensed, permitted, authorized, or approved pursuant to those
28chapters.

29(6) To adopt regulations reasonably related to its functions and
30duties as specified in this chapter.

31(7) To adopt regulations establishing fees in the reasonable
32amount necessary to recover costs incurred by the department
33relating to the enforcement of this chapter.

34(b) The department has all powers necessary and proper to
35enable it to carry out fully and effectually its duties and
36responsibilities specified in this chapter.

37

19772.  

(a) The department shall make appropriate
38investigations as follows:

39(1) To determine whether there has been any violation of this
40chapter or any regulations adopted under this chapter.

P8    1(2) To determine any facts, conditions, practices, or matters that
2it may deem necessary or proper to aid in the enforcement of this
3chapter or any regulation adopted under this chapter.

4(3) To aid in adopting regulations.

5(b) If, after any investigation, the department is satisfied that a
6license, permit, authorization, or approval pursuant to this chapter,
7Chapter 4 (commencing with Section 19400), or Chapter 5
8(commencing with Section 19800) should be suspended or revoked,
9it shall file an accusation in accordance with Chapter 5
10(commencing with Section 11500) of Part 1 of Division 3 of Title
112 of the Government Code.

12(c) In addition to any action that the board or commission may
13take against a license, permit, finding of suitability, or approval,
14the board or commission may also require the payment of fines or
15penalties. However, any fine imposed shall not exceed twenty
16thousand dollars ($20,000) for each separate violation of any
17provision of this chapter or any regulation adopted under this
18chapter.

19

19773.  

The board, commission, and department shall have the
20authority to regulate sports wagering to the same extent that these
21entities regulate other legal gambling in this state, including the
22ability to audit the books and records of a licensed operator.

23

SEC. 2.  

Section 336.9 of the Penal Code is amended to read:

24

336.9.  

(a) Notwithstanding Section 337a, and except as
25provided in subdivision (b), any person who, not for gain, hire, or
26reward other than that at stake under conditions available to every
27participant, knowingly participates in any of the ways specified in
28paragraph (2), (3), (4), (5), or (6) of subdivision (a) of Section
29337a in any bet, bets, wager, wagers, or betting pool or pools made
30between the person and any other person or group of persons who
31are not acting for gain, hire, or reward, other than that at stake
32under conditions available to every participant, upon the result of
33any lawful trial, or purported trial, or contest, or purported contest,
34of skill, speed, or power of endurance of person or animal, or
35between persons, animals, or mechanical apparatus, is guilty of
36an infraction, punishable by a fine not to exceed two hundred fifty
37dollars ($250).

38(b) Subdivision (a) does not apply tobegin delete eitherend deletebegin insert anyend insert of the following
39situations:

P9    1(1) Any bet, bets, wager, wagers, or betting pool or pools made
2begin delete onlineend deletebegin insert via the Internetend insert.

3(2) Betting pools with more than two thousand five hundred
4dollars ($2,500) at stake.

begin insert

5(3) Any sports wagering authorized pursuant to Chapter 4.7
6(commencing with Section 19750) of Division 8 of the Business
7and Professions Code.

end insert
8

SEC. 3.  

Section 337a of the Penal Code is amended to read:

9

337a.  

(a) Except as provided in Section 336.9,begin insert and as
10authorized pursuant to Chapter 4.7 (commencing with Section
1119750) of Division 8 of the Business and Professions Code,end insert
every
12person who engages in one of the following offensesbegin delete,end delete shall be
13punished for a first offense by imprisonment in a county jail for a
14period of not more than one year or in the state prison, or by a fine
15not to exceed five thousand dollars ($5,000), or by both
16imprisonment and fine:

17(1) Pool selling or bookmaking, with or without writing, at any
18time or place.

19(2) Whether for gain, hire, reward, or gratuitously, or otherwise,
20keeps or occupies, for any period of time whatsoever, any room,
21shed, tenement, tent, booth, building, float, vessel, place, standbegin insert,end insert
22 or enclosure, of any kind, or any part thereof, with a book or books,
23paper or papers, apparatus, devicebegin insert,end insert or paraphernalia, for the purpose
24of recording or registering any bet or bets, any purported bet or
25bets, wager or wagers, any purported wager or wagers, selling
26pools, or purported pools, upon the result, or purported result, of
27any trial, purported trial, contest, or purported contest, of skill,
28speedbegin insert,end insert or power of endurance of person or animal, or between
29persons, animals, or mechanical apparatus, or upon the result, or
30purported result, of any lot, chance, casualty,begin insert orend insert unknown or
31contingent event whatsoever.

32(3) Whether for gain, hire, reward, or gratuitously, or otherwise,
33receives, holds, or forwards, or purports or pretends to receive,
34hold, or forward, in any manner whatsoever, any money, thingbegin insert,end insert or
35consideration of value, or the equivalent or memorandum thereof,
36staked, pledged, betbegin insert,end insert or wagered, or to be staked, pledged, betbegin insert,end insert or
37wagered, or offered for the purpose of being staked, pledged, betbegin insert,end insert
38 or wagered, upon the result, or purported result, of any trial, or
39purported trial, or contest, or purported contest, of skill, speedbegin insert,end insert or
40power of endurance of person or animal, or between persons,
P10   1animals, or mechanical apparatus, or upon the result, or purported
2result, of any lot, chance, casualty,begin insert orend insert unknown or contingent event
3whatsoever.

4(4) Whether for gain, hire, reward, or gratuitously, or otherwise,
5at any time or place, records, or registers any bet or bets, wager
6or wagers, upon the result, or purported result, of any trial, or
7purported trial, or contest, or purported contest, of skill, speedbegin insert,end insert or
8power of endurance of person or animal, or between persons,
9 animals, or mechanical apparatus, or upon the result, or purported
10result, of any lot, chance, casualty,begin insert orend insert unknown or contingent event
11whatsoever.

12(5) Being the owner, lesseebegin insert,end insert or occupant of any room, shed,
13tenement, tent, booth, building, float, vessel, place, stand,
14enclosurebegin insert,end insert or grounds, or any part thereof, whether for gain, hire,
15reward, or gratuitously, or otherwise, permits that space to be used
16or occupied for any purpose, or in any manner prohibited by
17paragraph (1), (2), (3), or (4).

18(6) Lays, makes, offersbegin insert,end insert or accepts any bet or bets, or wager or
19wagers, upon the result, or purported result, of any trial, or
20purported trial, or contest, or purported contest, of skill, speedbegin insert,end insert or
21power of endurance of person or animal, or between persons,
22animals, or mechanical apparatus.

23(b) In any accusatory pleading charging a violation of this
24section, if the defendant has been once previously convicted of a
25violation of any subdivision of this section, the previous conviction
26shall be charged in the accusatory pleading, and, if the previous
27conviction is found to be true by the jury, upon a jury trial, or by
28the court, upon a court trial, or is admitted by the defendant, the
29defendant shall, if he or she is not imprisoned in the state prison,
30be imprisoned inbegin delete theend deletebegin insert aend insert county jail for a period of not more than
31one year and pay a fine of not less than one thousand dollars
32($1,000) and not to exceed ten thousand dollars ($10,000). Nothing
33in this paragraph shall prohibit a court from placing a person
34subject to this subdivision on probation. However, that person
35shall be required to pay a fine of not less than one thousand dollars
36($1,000) nor more than ten thousand dollars ($10,000) or be
37imprisoned inbegin delete theend deletebegin insert aend insert county jail for a period of not more than one
38year, as a condition thereof. In no event does the court have the
39power to absolve a person convicted pursuant to this subdivision
40from either being imprisoned or from paying a fine of not less than
P11   1one thousand dollars ($1,000) and not more than ten thousand
2dollars ($10,000).

3(c) In any accusatory pleading charging a violation of this
4section, if the defendant has been previously convicted two or
5more times of a violation of any subdivision of this section, each
6previous conviction shall be charged in the accusatory pleadings.
7If two or more of the previous convictions are found to be true by
8the jury, upon a jury trial, or by the court, upon a court trial, or are
9admitted by the defendant, the defendant shall, if he or she is not
10imprisoned inbegin delete theend deletebegin insert aend insert state prison, be imprisoned inbegin delete theend deletebegin insert aend insert county jail
11for a period of not more than one year or pay a fine of not less than
12one thousand dollars ($1,000) nor more than fifteen thousand
13dollars ($15,000), or be punished by both imprisonment and fine.
14Nothing in this paragraph shall prohibit a court from placing a
15person subject to this subdivision on probation. However, that
16person shall be required to pay a fine of not less than one thousand
17dollars ($1,000) nor more than fifteen thousand dollars ($15,000),
18or be imprisoned inbegin delete theend deletebegin insert aend insert county jail for a period of not more than
19one year as a condition thereof. In no event does the court have
20the power to absolve a person convicted and subject to this
21subdivision from either being imprisoned or from paying a fine of
22not more than fifteen thousand dollars ($15,000).

23(d) Except where the existence of a previous conviction of any
24subdivision of this section was not admitted or not found to be true
25pursuant to this section, or the court finds that a prior conviction
26was invalid, the court shall not strike or dismiss any prior
27convictions alleged in the information or indictment.

28(e) This section applies not only to persons who commit any of
29the acts designated in paragraphs (1) to (6), inclusive, of
30subdivision (a), as a business or occupation, but also applies to
31every person who in a single instance engages in any one of the
32acts specified in paragraphs (1) to (6), inclusive, of subdivision
33(a).

34

SEC. 4.  

No reimbursement is required by this act pursuant to
35Section 6 of Article XIII B of the California Constitution because
36the only costs that may be incurred by a local agency or school
37district will be incurred because this act creates a new crime or
38infraction, eliminates a crime or infraction, or changes the penalty
39for a crime or infraction, within the meaning of Section 17556 of
40the Government Code, or changes the definition of a crime within
P12   1the meaning of Section 6 of Article XIII B of the California
2Constitution.

3

SEC. 5.  

This act is an urgency statute necessary for the
4immediate preservation of the public peace, health, or safety within
5the meaning of Article IV of the Constitution and shall go into
6immediate effect. The facts constituting the necessity are:

7In order to protect the liberty interests of Californians, to ensure
8that the state realizes significant revenues from this popular,
9pervasive, and legitimate activity, and to ensure that suitable and
10qualified persons operate sports betting venues, it is necessary that
11this act take effect immediately.



O

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