BILL NUMBER: AB 701 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 7, 2015
INTRODUCED BY Assembly Member Cristina Garcia
FEBRUARY 25, 2015
An act to amend Section Sections
19817 and 19858 of the Business and Professions Code,
relating to gaming.
LEGISLATIVE COUNSEL'S DIGEST
AB 701, as amended, Cristina Garcia. Gaming: Gaming
Policy Advisory Committee. Gaming.
Existing law, the Gambling Control Act, provides for the licensure
and regulation of various legalized gambling activities and
establishments by the California Gambling Control Commission and the
investigation and enforcement of those activities and establishments
by the Department of Justice. Existing law requires the commission to
establish a 10-member Gaming Policy Advisory Committee for the
purpose of discussing matters of controlled gambling regulatory
policy and other relevant gambling-related issues. The committee is
composed of representatives of controlled gambling licensees and
members of the general public in equal numbers.
This bill would increase the membership of the committee from 10
to 12 members, and would instead require the committee to be composed
of 5 representatives of controlled gambling licensees, 5 members of
the general public, and 2 representatives from the Department of
Justice.
Under the act, a person is deemed unsuitable to hold a 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 that provision a person or entity that
has held a license in good standing as an owner of a gambling
establishment for at least 5 years as of January 1, 2015, has
notified the California Gambling Control Commission and the
Department of Justice, has received commission approval to obtain a
financial interest in a business or organization within the United
States that conducts lawful gambling outside of California that, if
conducted within California, would be unlawful, and has paid the
commission for the reasonable costs of the investigation and approval
for obtaining the financial interest.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 19817 of the Business and Professions Code is
amended to read:
19817. The commission shall establish and appoint a Gaming Policy
Advisory Committee of 12 members. The committee shall be composed of
five representatives of controlled gambling licensees, five members
of the general public, and two members from the department. The
executive director shall, from time to time, convene the committee
for the purpose of discussing matters of controlled gambling
regulatory policy and any other relevant gambling-related issue. The
recommendations concerning gambling policy made by the committee
shall be presented to the commission, but shall be deemed advisory
and not binding on the commission in the performance of its duties or
functions. The committee may not advise the commission on Indian
gaming.
SEC. 2. Section 19858 of the Business
and Professions Code is amended to read:
19858. (a) Except as provided in subdivisions (b) and
(c), (b), (c), and (d), 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 does 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) does not apply to a person or entity that
meets all of the following criteria:
(1) Holds a license in good standing as an owner of a gambling
establishment pursuant to this chapter for at least five years as of
January 1, 2015.
(2) Has notified the commission and the department and received
commission approval to obtain a financial interest in another
business or organization within the United States that conducts
lawful gambling outside of California that, if conducted within
California, would be unlawful.
(3) Has paid the commission for the reasonable costs incurred by
the commission for the investigation and approval to obtain the
financial interest described in paragraph (2).
(c)
(d) Subdivision (a) shall does
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)
(e) Within three years of the date the closed business
or organization reopens or becomes engaged in any form of gambling
prohibited by Section 330 of the Penal Code, a person described in
subdivision (c) (d) 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)
(f) A person described in subdivision (c)
(d) 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)
(g) During the three-year divestment period described
in subdivision (d), (e), 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). (d). 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.
(g)
(h) During the three-year divestment period described
in subdivision (d), (e), any funds used
in connection with the capital improvement of the gambling
enterprise or gambling establishment described in paragraph (3) of
subdivision (c) (d) shall not be
provided from the gaming revenues of either the business or
organization engaged in gaming prohibited under Section 330 of the
Penal Code.
(h)
(i) If, at the end of the three-year divestment period
described in subdivision (d), (e), any
person described in subdivision (c) (d)
has not divested his or her interest in either the gambling
enterprise or gambling establishment or the business or organization
engaged in any form of gaming prohibited under Section 330 of the
Penal Code, the prohibitions of Section 19858 as it read on January
1, 2013, apply.