BILL NUMBER: SB 472 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 5, 2013
AMENDED IN ASSEMBLY JUNE 27, 2013
INTRODUCED BY Senator Hill
FEBRUARY 21, 2013
An act to amend Section Sections
19852.2, 19855, and 19858 of the Business and Professions Code,
relating to gaming.
LEGISLATIVE COUNSEL'S DIGEST
SB 472, as amended, Hill. Gaming: licenses.
The Gambling Control Act provides for the licensure of certain
individuals and establishments involved in various gambling
activities, and for the regulation of those activities, by the
California Gambling Control Commission. The act makes any person
who willfully violates any of the provisions of the act for which a
penalty is not expressly provided guilty of a misdemeanor.
The act requires every person who is required to hold a
state license to obtain the license prior to engaging in the
activity or occupying the position with respect to which the license
is required, except as specified. Existing law requires every person
who, by order of the commission, is required to apply for a gambling
license or a finding of suitability to file an application within 30
calendar days after receipt of the order.
This bill would instead require the application described above to
be filed within 45 calendar days after receipt of an order of the
commission.
The act also provides that, if the owner of a gambling enterprise
is not a person, the owner is not eligible for a gambling license
unless specified persons involved in the enterprise obtain a gambling
license. Existing law authorizes the commission to exempt specified
limited partners in limited partnerships from the licensing
requirements described above solely for the purpose of the licensure
of a card club located on the grounds of a racetrack that is owned by
a limited partnership that also owns the racetrack.
This bill would instead authorize the commission to exempt
specified limited partners in limited partnerships from the licensing
requirements described above solely for the purpose of the licensure
of a card club located on any portion of, or contiguous to, the
grounds upon which a racetrack is or had been previously located and
horse race meetings were authorized to be conducted by the California
Horse Racing Board one on or before
January 1, 2012, that is owned by a limited partnership that also
owns or owned the racetrack.
Existing law provides that a person is deemed unsuitable to hold a
state gambling license to own a gambling establishment if the
person, or any partner, officer, director, or shareholder of the
person, has any financial interest in any business or organization
that is engaged in a prohibited form of gambling, whether within or
without this state, except as specified.
This bill would exempt from these provisions a person who is
licensed or had an application to be licensed on file with the
commission on or before February 1, 2013, has a financial interest in
a business or organization engaged in gambling prohibited by state
law that was closed and was not engaged in prohibited gambling at the
time the person was either licensed or had filed an application to
be licensed with the commission, and has a financial interest in a
gambling establishment that is located on any portion of, or
contiguous to, the grounds on which a racetrack is or had been
previously located and horserace horse race
meetings were authorized to be conducted by the California
Horse Racing Board on or before January 1, 2012, that is directly or
indirectly owned by a racetrack limited partnership owner, as
defined. The bill would require an exempted person described above,
within 3 years of obtaining a financial interest in a
the date the closed business or organization
that is reopens and becomes engaged in
any form of prohibited gambling, as specified, to either divest that
person's interest in the business or organization, or divest that
person's interest in the gambling enterprise or gambling
establishment for which the person is licensed or has
had applied to be licensed by the commission.
The bill would also require an exempted person to inform the
commission within 30 days of the date on which a business or
organization in which the person has a financial interest begins to
engage in any form of prohibited gambling, as specified. The
bill would also make it unlawful, during the 3-year
divestment period, for any cross-promotion or marketing,
as defined, to occur between the business or organization that is
engaged in any form of prohibited gambling, as specified, and a
gambling enterprise or gambling establishment, as described. By
creating a new crime, the bill would impose a state-mandated local
program.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 19852.2 of the Business and Professions Code is
amended to read:
19852.2. (a) Notwithstanding Section 19852 or any other provision
of law, and solely for the purpose of the licensure of a card club
located on any portion of, or contiguous to, the grounds upon which a
racetrack is or had been previously located and horserace meetings
were authorized to be conducted by the California Horse
Racing Board on or before January 1, 2012, that is owned by a limited
partnership that also owns or owned the racetrack, the commission
may, at its discretion, exempt all of the following from the
licensing requirements of this chapter:
(1) The limited partners in a limited partnership that holds
interest in a holding company if all of the following criteria are
met:
(A) The limited partners of the limited partnership in the
aggregate directly hold at least 95 percent of the interest in the
holding company.
(B) The limited partner is one of the following:
(i) An "institutional investor" as defined in subdivision (w) of
Section 19805.
(ii) An "employee benefit plan" as defined in Section 1002(3) of
Title 29 of the United States Code.
(iii) An investment company that manages a state university
endowment.
(2) Other limited partners in a limited partnership described in
paragraph (1), if the partners do not number more than five and each
partner indirectly owns 1 percent or less of the shares of the
interest in the holding company.
(3) A limited partner in a limited partnership that holds in the
aggregate less than 5 percent of the interest in a holding company.
(b) Nothing in this section shall be construed to limit the
licensure requirements for a general partner of a limited partnership
or a limited partner that is not specifically described in this
section.
SEC. 2. Section 19855 of the Business and Professions Code is
amended to read:
19855. Except as otherwise provided by statute or regulation,
every person who, by statute or regulation, is required to hold a
state license shall obtain the license prior to engaging in the
activity or occupying the position with respect to which the license
is required. Every person who, by order of the commission, is
required to apply for a gambling license or a finding of suitability
shall file the application within 45 calendar days after receipt of
the order.
SEC. 3. Section 19858 of the Business and Professions Code is
amended to read:
19858. (a) Except as provided in subdivision
subdivisions (b) and (c),a person shall be deemed to be
unsuitable to hold a state gambling license to own a gambling
establishment if the person, or any partner, officer, director, or
shareholder of the person, has any financial interest in any business
or organization that is engaged in any form of gambling prohibited
by Section 330 of the Penal Code, whether within or without this
state.
(b) Subdivision (a) shall not apply to a publicly traded racing
association, a qualified racing association, or any person who is
licensed pursuant to subdivision (b) or (c) of Section 19852.
(c) Subdivision (a) shall not apply to a person who meets all of
the following criteria:
(1) The person is licensed or had an application to be licensed on
file with the commission on or before February 1, 2013.
(2) The person has a financial interest in a business or
organization engaged in gambling prohibited by Section 330 of the
Penal Code that was closed and was not engaged in prohibited gambling
at the time the person was either licensed or had filed an
application to be licensed with the commission.
(3) The person has a financial interest in a gambling
establishment that is located on any portion of, or contiguous to,
the grounds on which a racetrack is or had been previously located
and horserace meetings were authorized to be conducted by the
California Horse Racing Board on or before January 1, 2012.
(4) The grounds upon which the gambling establishment described in
paragraph (3) is located are directly or indirectly owned by a
racetrack limited partnership owner. For purposes of this paragraph,
a "racetrack limited partnership owner" is defined as a limited
partnership, or a number of related limited partnerships, that is or
are at least 80 percent capitalized by limited partners that are an
"institutional investor" as defined in subdivision (w) of Section
19805, an "employee benefit plan" as defined in Section 1002(3) of
Title 29 of the United States Code, or an investment company that
manages a state university endowment.
(d) Within three years of obtaining a financial interest
in a the date the closed business or
organization that is reopens or becomes
engaged in any form of gambling prohibited by Section 330 of the
Penal Code, a person described in subdivision (c) shall either divest
that person's interest in the business or organization, or divest
that person's interest in the gambling enterprise or gambling
establishment for which the person is licensed or has applied to be
licensed by the commission.
(e) A person described in subdivision (c) shall inform the
commission within 30 days of the date on which a business or
organization in which the person has a financial interest begins to
engage in any form of gambling prohibited by Section 330 of the Penal
Code.
(f) During the three-year divestment period described in
subdivision (d), it is unlawful for any cross-promotion or marketing
to occur between the business or organization that is engaged in any
form of gambling prohibited by Section 330 of the Penal Code and the
gambling enterprise or gambling establishment described in paragraph
(3) of subdivision (c). For purposes of this subdivision,
"cross-promotion or marketing" means the offering to any customers of
the gambling enterprise or gambling establishment anything of value
related to visiting or gambling at the business or organization
engaged in any form of gambling prohibited by Section 330 of the
Penal Code.
SEC. 4. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.