BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 549  


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          Date of Hearing:  August 19, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          SB 549  
          (Hall) - As Amended June 23, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill:


          1)Authorizes a private, nonprofit organization established by,  
            or affiliated with, a professional sports club or organization  
            to conduct a 50/50 raffle to directly support charitable  
            purposes in California.  The bill requires 50% of gross  
            receipts from the sale of raffle tickets to be used to benefit  
            a charitable organization or purpose and 50% of the gross  
            receipts be paid to the prize winner, and requires the sports  
            organizations to provide aggregate data on gross receipts,  
            direct costs, and beneficial uses of raffle proceeds to the  








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            Department of Justice.


          2)Allows the DOJ to impose minimum annual fees of $5,000 on each  
            eligible sports team or organization; minimum annual fees of  
            $5,000 on each manufacturer or distributor of raffle-related  
            products or services; and $100 on each eligible sports team or  
            organization for each raffle, subject to adjustment by the DOJ  
            to ensure amounts collected fully offset actual costs.


          3)Includes a December 31, 2020 sunset provision.  Because SB 549  
            amends the percentage of gross receipts from a raffle required  
            to be dedicated to beneficial or charitable purposes, the  
            California Constitution requires a 2/3 vote of each house of  
            the Legislature.


          FISCAL EFFECT:


          Ongoing General Fund costs to the DOJ's Bureau of Gambling  
          Control for administration and enforcement of approximately  
          $575,000 per year.  Over time, those costs may be recovered, in  
          whole or in part, through annual and per-raffle registration  
          fees.


          COMMENTS:


          1)Purpose.  According to the author, there are more than 100  
            professional sports franchises operating 50/50 charitable  
            raffles at sporting events throughout the United States and  
            Canada.  SB 549 is intended to make charitable raffles more  
            attractive to participants, raising additional contribution  
            money for charitable causes compared with the current 90/10  
            restriction. 









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          2)Existing 90/10 Raffles.  The California Constitution permits  
            charitable organizations to conduct raffles to raise  
            contribution money if at least 90% of the gross receipts from  
            the raffle go directly to the beneficial or charitable  
            purposes in California.  The Constitution permits the  
            Legislature to amend the percentage of gross receipts required  
            by statute only if enacted with a 2/3 vote of each house.


          3)50/50 Raffles.  Gross receipts for 50/50 charitable raffles at  
            major and minor league sports teams in the United States and  
            Canada range from as low as $1,000 for minor league games to  
            more than $100,000 for certain major league games.  Half of  
            those proceeds are distributed to raffle winners, and half are  
            distributed to charities.  The growth in 50/50 charitable  
            raffles at sporting events coincides with advances in raffle  
            technology that permit secure, real-time transactions and  
            auditing.  The technology has proven popular in several other  
            states and has facilitated considerable growth in professional  
            sports charitable raffles of the type proposed in this bill.


            California has 18 major league professional sports clubs, 23  
            minor league professional sports clubs, and several regular  
            golf and racing events that could host raffles under this  
            bill, resulting in as many as 1,600 raffles in the state per  
            year.


          4)Nonprofit Opposition.  While this bill enjoys support from a  
            number of diverse charitable organizations, the bill is  
            opposed by CalNonprofits, an alliance of approximately 10,000  
            organizations.  The nonprofits have raised two primary  
            objections to SB 549: (1) it creates special fundraising rules  
            for select set of sports charities and those that choose to  
            affiliate with those charities; and (2) it dilutes or  
            undermines the value of charitable giving by shifting the  
            focus toward gambling.  The opponents argue current law  








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            ensures the primary purpose of charitable raffles is the  
            benefit to the charity, and treats all charities equally.


          5)Prior Legislation.  AB 1691 (Jones-Sawyer) of 2014 was  
            substantially similar to this bill and would have created a  
            50/50 charitable raffles exemption for professional sports  
            teams and their affiliates.  AB 1691 was held on the Suspense  
            File of this committee.








          Analysis Prepared by:Joel Tashjian / APPR. / (916)  
          319-2081