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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|Policy |Governmental Organization |Vote:|18 - 0 |
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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