BILL NUMBER: AB 2218 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 11, 2016
INTRODUCED BY Assembly Member Burke
FEBRUARY 18, 2016
An act to amend Section Sections
19855 and 19858 of the Business and Professions Code,
relating to gambling.
LEGISLATIVE COUNSEL'S DIGEST
AB 2218, as amended, Burke. Gambling: licenses.
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. A willful violation of the act is
a misdemeanor. Existing law 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 also
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 45 calendar days after receipt of the order.
This bill would instead require the application described above to
be filed within 60 calendar days after receipt of an order of the
commission.
Existing law makes it a misdemeanor for a person who deals, plays,
or carries on, opens, or causes to be opened, or who conducts,
either as owner or employer, whether for hire or not, any of a list
of specified gambling games, or any banking or percentage game played
with cards, dice, or any device, for money, checks, credit, or any
representative of value.
Existing law generally requires a person to be deemed unsuitable
to hold a state gambling license under the California Gambling
Control Act to own a gambling establishment if the person, or any
partner, officer, director, or shareholder of that person, has any
financial interest in any business or organization that is engaged in
any form of gambling prohibited under the provision described above,
whether within or without this state. Existing law exempts from
these provisions a person who meets specified criteria, including a
person who is licensed or had an application to be licensed on file
with the commission on or before February 1, 2013. Existing law
requires a person exempt under this provision, within 3 years of the
date the closed business or organization reopens or becomes engaged
in any form of gambling prohibited under the provision described
above, 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 applied to be licensed by the commission.
During this 3-year divestment period, existing law makes it
unlawful for any cross-promotion or marketing, as defined, to occur
between the business or organization that is engaged in any form of
gambling prohibited under the provision described above, and a
gambling enterprise or gambling establishment.
This bill would instead require an exempt person, within 6 years
of the date the closed business or organization reopens or becomes
engaged in any form of gambling prohibited under the provision
described above, 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 applied to be licensed by the commission. The bill
would also make conforming changes. By expanding the scope of an
existing 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: no
yes . State-mandated local program: no
yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. 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 60 calendar days after receipt of
the order.
SEC. 2. Section 19858 of the Business
and Professions Code is amended to read:
19858. (a) Except as provided in 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
means 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 six 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) 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 six-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.
(g) During the three-year six-year
divestment period described in subdivision (d), any funds used in
connection with the capital improvement of the gambling enterprise or
gambling establishment described in paragraph (3) of subdivision (c)
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) If, at the end of the three-year
six-year divestment period described in subdivision (d), any
person described in subdivision (c) 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.
SEC. 3. 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.