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 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 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 the date the closed business or organization 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 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.begin insert The bill would prohibit, during that 3-year divestment period, any funds used in connection with the capital improvement of the gambling enterprise or gambling establishment from being provided from the gaming revenues of either the business or organization engaged in prohibited forms of gaming. The bill would also provide that if, at the end of the 3-year divestment period, a person has not divested his or her interest in either the gambling enterprise or gambling establishment or the business or organization that is engaged in the form of prohibited gaming, the exemption would not apply to that person and that 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 prohibited gaming, whether within or without this state, as specified.end insert
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: yes.
The people of the State of California do enact as follows:
Section 19852.2 of the Business and Professions
2Code is amended to read:
(a) Notwithstanding Section 19852 or any other
4provision of law, and solely for the purpose of the licensure of a
5card club located on any portion of, or contiguous to, the grounds
6upon which a racetrack is or had been previously located and
7horserace meetings were authorized to be conducted by the
8California Horse Racing Board on or before January 1, 2012, that
9is owned by a limited partnership that also owns or owned the
P4 1racetrack, the commission may, at its discretion, exempt all of the
2following from the licensing requirements of this chapter:
3(1) The limited partners in a limited partnership that holds
4interest in a holding company if all of the following criteria are
5met:
6(A) The limited
partners of the limited partnership in the
7aggregate directly hold at least 95 percent of the interest in the
8holding company.
9(B) The limited partner is one of the following:
10(i) An “institutional investor” as defined in subdivision (w) of
11Section 19805.
12(ii) An “employee benefit plan” as defined in Section 1002(3)
13of Title 29 of the United States Code.
14(iii) An investment company that manages a state university
15endowment.
16(2) Other limited partners in a limited partnership described in
17paragraph (1), if the partners do not number more than five and
18each partner indirectly owns 1 percent or less of the shares of the
19interest in the holding company.
20(3) A limited partner in a limited partnership that holds in the
21aggregate less than 5 percent of the interest in a holding company.
22(b) Nothing in this section shall be construed to limit the
23licensure requirements for a general partner of a limited partnership
24or a limited partner that is not specifically described in this section.
Section 19855 of the Business and Professions Code
26 is amended to read:
Except as otherwise provided by statute or regulation,
28every person who, by statute or regulation, is required to hold a
29state license shall obtain the license prior to engaging in the activity
30or occupying the position with respect to which the license is
31required. Every person who, by order of the commission, is
32required to apply for a gambling license or a finding of suitability
33shall file the application within 45 calendar days after receipt of
34the order.
Section 19858 of the Business and Professions Code
36 is amended to read:
(a) Except as provided in subdivisions (b) and (c), a
38person shall be deemed to be unsuitable to hold a state gambling
39license to own a gambling establishment if the person, or any
40partner, officer, director, or shareholder of the person, has any
P5 1financial interest in any business or organization that is engaged
2in any form of gambling prohibited by Section 330 of the Penal
3Code, whether within or without this state.
4(b) Subdivision (a) shall not apply to a publicly traded racing
5association, a qualified racing association, or any person who is
6licensed pursuant to subdivision (b) or (c) of Section 19852.
7(c) Subdivision (a) shall not apply to a person who meets
all of
8the following criteria:
9(1) The person is licensed or had an application to be licensed
10on file with the commission on or before February 1, 2013.
11(2) The person has a financial interest in a business or
12organization engaged in gambling prohibited by Section 330 of
13the Penal Code that was closed and was not engaged in prohibited
14gambling at the time the person was either licensed or had filed
15an application to be licensed with the commission.
16(3) The person has a financial interest in a gambling
17establishment that is located on any portion of, or contiguous to,
18the grounds on which a racetrack is or had been previously located
19and horserace meetings were authorized to be conducted by the
20California Horse Racing Board on or before January 1, 2012.
21(4) The grounds upon which the gambling establishment
22described in paragraph (3) is located are directly or indirectly
23owned by a racetrack limited partnership owner. For purposes of
24this paragraph, a “racetrack limited partnership owner” is defined
25as a limited partnership, or a number of related limited partnerships,
26that is or are at least 80 percent capitalized by limited partners that
27are an “institutional investor” as defined in subdivision (w) of
28Section 19805, an “employee benefit plan” as defined in Section
291002(3) of Title 29 of the United States Code, or an investment
30company that manages a state university endowment.
31(d) Within three years of the date the closed business or
32organization reopens or becomes engaged in any form of gambling
33prohibited by Section 330 of the Penal Code, a person described
34in subdivision (c) shall either divest that person’s interest in the
35business or organization, or divest that person’s
interest in the
36gambling enterprise or gambling establishment for which the
37person is licensed or has applied to be licensed by the commission.
38(e) A person described in subdivision (c) shall inform the
39commission within 30 days of the date on which a business or
40organization in which the person has a financial interest begins to
P6 1engage in any form of gambling prohibited by Section 330 of the
2Penal Code.
3(f) During the three-year divestment period described in
4subdivision (d), it is unlawful for any cross-promotion or marketing
5to occur between the business or organization that is engaged in
6any form of gambling prohibited by Section 330 of the Penal Code
7and the gambling enterprise or gambling establishment described
8in paragraph (3) of subdivision (c). For purposes of this
9subdivision, “cross-promotion or marketing” means the offering
10to any customers of the gambling enterprise
or gambling
11establishment anything of value related to visiting or gambling at
12the business or organization engaged in any form of gambling
13prohibited by Section 330 of the Penal Code.
14(g) During the three-year divestment period described in
15subdivision (d), any funds used in connection with the capital
16improvement of the gambling enterprise or gambling establishment
17described in paragraph (3) of subdivision (c) shall not be provided
18from the gaming revenues of either the business or organization
19engaged in gaming prohibited under Section 330 of the Penal
20Code.
21(h) If, at the end of the three-year divestment period described
22in subdivision (d), any person described in subdivision (c) has not
23
divested his or her interest in either the gambling enterprise or
24gambling establishment or the business or organization engaged
25in any form of gaming prohibited under Section 330 of the Penal
26Code, the prohibitions of Section 19858 as it read on January 1,
272013, apply.
No reimbursement is required by this act pursuant to
29Section 6 of Article XIII B of the California Constitution because
30the only costs that may be incurred by a local agency or school
31district will be incurred because this act creates a new crime or
32infraction, eliminates a crime or infraction, or changes the penalty
33for a crime or infraction, within the meaning of Section 17556 of
34the Government Code, or changes the definition of a crime within
35the meaning of Section 6 of Article XIII B of the California
36Constitution.
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