BILL NUMBER: SB 8 CHAPTERED
BILL TEXT
CHAPTER 867
FILED WITH SECRETARY OF STATE OCTOBER 11, 1997
APPROVED BY GOVERNOR OCTOBER 10, 1997
PASSED THE SENATE SEPTEMBER 13, 1997
PASSED THE ASSEMBLY SEPTEMBER 13, 1997
AMENDED IN ASSEMBLY SEPTEMBER 13, 1997
AMENDED IN ASSEMBLY JULY 21, 1997
AMENDED IN SENATE MAY 22, 1997
AMENDED IN SENATE MAY 8, 1997
AMENDED IN SENATE APRIL 1, 1997
AMENDED IN SENATE MARCH 11, 1997
INTRODUCED BY Senator Lockyer
DECEMBER 2, 1996
An act to add Sections 19810A, 19811A, 19812A, 19813A, 19814A,
19815.5A, 19815.8A, 19817A, 19820A, 19821A, 19822A, 19823A, 19824A,
19841A, 19842A, 19846A, 19847A, 19848A, 19850A, 19851A, 19852A,
19853A, 19854A, 19856A, 19857A, 19858A, 19858.7A, 19860A, 19862A,
19863A, 19864A, 19871A, 19872A, 19882A, 19883A, 19910.5A, 19911A,
19912A, 19913A, 19915A, 19918A, 19920A, 19921A, 19933.5A, 19942A,
19959.5A, and 19960.2A to, to add Article 3 (commencing with Section
19830A) and Article 7 (commencing with Section 19900A) to Chapter 5
of, to repeal Sections 19445, 19809, 19816, 19822.1, 19823.1, and
19950.2 of, to repeal Sections 19810, 19811, 19812, 19813, 19814,
19817, 19820, 19821, 19822, 19823, 19841, 19842, 19846, 19847, 19848,
19850, 19851, 19852, 19853, 19854, 19856, 19857, 19858, 19858.7,
19860, 19862, 19863, 19864, 19871, 19872, 19882, 19883, 19910.5,
19911, 19912, 19913, 19915, 19918, 19920, 19921, 19933.5, 19942,
19959.5, and 19960.2 to, to repeal and add Article 3 (commencing with
Section 19830) and Article 8 (commencing with Section 19900) of
Chapter 5 of, and to repeal and add Chapter 5 (commencing with
Section 19800) of, Division 8 of, the Business and Professions Code,
to add Section 1822.60 to the Code of Civil Procedure, to amend
Section 15001 of, and to add Sections 15001.1 and 15001.2 to, the
Government Code, and to amend Sections 186.9 and 14161 of, to add,
repeal, and add Section 337j to, the Penal Code, and to add Chapter 8
(commencing with Section 4369) to Part 3 of Division 4 of the
Welfare and Institutions Code, relating to gambling.
LEGISLATIVE COUNSEL'S DIGEST
SB 8, Lockyer. Gambling.
(1) Existing law, the Gaming Registration Act, among other things,
prohibits the ownership or operation of a gaming club, as defined,
without first obtaining a valid registration from the Attorney
General. Existing law subjects any person operating a gaming club
without a license to punishment in the state prison or in a county
jail for not more than one year.
This bill would repeal the Gaming Registration Act. The bill
would recast these provisions, as specified, and would enact the
Gambling Control Act.
(2) Existing law provides that the Department of Justice, under
the direction and control of the Attorney General, is composed of the
office of the Attorney General and the Division of Law Enforcement.
This bill would create the Division of Gambling Control within the
Department of Justice. The bill would authorize the division to
regulate legal gambling in this state, as specified. This bill would
also create the California Gambling Control Board and delegate
specified duties to the board. Upon the occurrence of certain
events, the California Gambling Control Commission, which this bill
would also create, would succeed to all of the powers of the
California Gambling Control Board, which would be abolished.
(3) Under existing law, the California Horse Racing Board is the
state entity responsible for negotiating with the Indian tribes for
the purpose of entering into a tribal-state compact governing the
conduct of horseracing activities on Indian lands of the tribe.
This bill would repeal that provision.
(4) Existing law prohibits certain conduct with regard to
gambling, as specified.
This bill, among other things, would provide that a violation of
the Gambling Control Act, unless otherwise indicated in the act, is a
misdemeanor, thereby imposing a state-mandated local program by
creating a new crime. The bill would also prohibit specified persons
from engaging in certain activities related to any controlled game,
as defined, without having first procured a state license. A
violation of this provision would be a misdemeanor, thereby imposing
a state-mandated local program by creating a new crime.
(5) This bill would create within the State Treasury the Gambling
Control Fund, and would provide that, upon appropriation by the
Legislature, $5,400,000 of that fund each fiscal year shall be
available to the Department of Justice exclusively for the support of
the Division of Gambling Control and the California Gambling Control
Board.
(6) The Milton Marks Postgovernment Employment Restrictions Act of
1990, a part of the Political Reform Act of 1974, generally
prohibits officers and employees of a state administrative agency, as
defined, from making an appearance or communication for a period of
12 months after he or she leaves office before or to that agency for
the purpose of influencing administrative action or other proceedings
of the agency.
This bill would prohibit certain officials and employees of the
division and the board from making an appearance or communication for
a period of 3 years from termination of employment or leaving of the
office before or to the division or the board for the purpose of
influencing the division or the board.
(7) Existing law provides that any person who conducts or attempts
to conduct a money laundering transaction, as described, shall be
punished by imprisonment in a county jail for not more than one year
or in the state prison, by a specified fine, or both.
This bill would include any person or business engaged in
controlled gambling, as specified, within the definition of
"financial institution" for purposes of those money laundering
provisions. Thus, by expanding the scope of an existing crime, the
bill would impose a state-mandated local program. This bill would
also make additional changes in these provisions, to be operative
only if AB 195 is also chaptered, and this bill is chaptered last.
(8) This bill would also impose a state-mandated local program by
increasing the reporting and specified administrative duties of local
law enforcement and licensing entities.
(9) 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 for certain costs no reimbursement is
required by this act for a specified reason.
However, the bill would provide that, if the Commission on State
Mandates determines that this bill contains other costs mandated by
the state, reimbursement for those costs shall be made pursuant to
those statutory procedures and, if the statewide cost does not exceed
$1,000,000, shall be made from the State Mandates Claims Fund.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 19445 of the Business and Professions Code is
repealed.
SEC. 2. Chapter 5 (commencing with Section 19800) of Division 8 of
the Business and Professions Code is repealed.
SEC. 3. Chapter 5 (commencing with Section 19800) is added to
Division 8 of the Business and Professions Code, to read:
CHAPTER 5. THE GAMBLING CONTROL ACT
Article 1. General Provisions
19800. This chapter shall be known, and may be cited, as the
"Gambling Control Act."
19801. The Legislature hereby finds and declares all of the
following:
(a) The longstanding public policy of this state disfavors the
business of gambling. State law prohibits commercially operated
lotteries, banked or percentage games, and gambling machines, and
strictly regulates parimutuel wagering on horseracing. To the extent
that state law categorically prohibits certain forms of gambling and
prohibits gambling devices, nothing herein shall be construed, in
any manner, to reflect a legislative intent to relax those
prohibitions.
(b) Gambling can become addictive and is not an activity to be
promoted or legitimized as entertainment for children and families.
(c) Unregulated gambling enterprises are inimical to the public
health, safety, welfare, and good order. Accordingly, no person in
this state has a right to operate a gambling enterprise except as may
be expressly permitted by the laws of this state and by the
ordinances of local governmental bodies.
(d) It is the policy of this state that gambling activities that
are not expressly prohibited or regulated by state law may be
prohibited or regulated by local government. Moreover, it is the
policy of this state that no new cardroom may be opened in a city,
county, or city and county in which a cardroom was not operating on
and before January 1, 1984, except upon the affirmative vote of the
electors of that city, county, or city and county.
(e) It is not the purpose of this chapter to expand opportunities
for gambling, or to create any right to operate a gambling enterprise
in this state or to have a financial interest in any gambling
enterprise. Rather, it is the purpose of this chapter to regulate
businesses that offer otherwise lawful forms of gambling games.
(f) Public trust that permissible gambling will not endanger
public health, safety, or welfare requires that comprehensive
measures be enacted to ensure that such gambling is free from
criminal and corruptive elements, that it is conducted honestly and
competitively, and that it is conducted in suitable locations.
(g) Public trust and confidence can only be maintained by strict
and comprehensive regulation of all persons, locations, practices,
associations, and activities related to the operation of lawful
gambling establishments and the manufacture or distribution of
permissible gambling equipment.
(h) All gambling operations, all persons having a significant
involvement in gambling operations, all establishments where gambling
is conducted, and all manufacturers, sellers, and distributors of
gambling equipment must be licensed and regulated to protect the
public health, safety, and general welfare of the residents of this
state as an exercise of the police powers of the state.
(i) To ensure that gambling is conducted honestly, competitively,
and free of criminal and corruptive elements, all licensed gambling
establishments in this state must remain open to the general public
and the access of the general public to licensed gambling activities
must not be restricted in any manner, except as provided by the
Legislature. However, subject to state and federal prohibitions
against discrimination, nothing herein shall be construed to preclude
exclusion of unsuitable persons from licensed gambling
establishments in the exercise of reasonable business judgment.
(j) In order to effectuate state policy as declared herein, it is
necessary that gambling establishments, activities, and equipment be
licensed, that persons participating in those activities be licensed
or registered, that certain transactions, events, and processes
involving gambling establishments and owners of gambling
establishments be subject to prior approval or permission, that
unsuitable persons not be permitted to associate with gambling
activities or gambling establishments, and that gambling activities
take place only in suitable locations. Any license or permit issued,
or other approval granted pursuant to this chapter, is declared to
be a revocable privilege, and no holder acquires any vested right
therein or thereunder.
(k) The location of lawful gambling premises, the hours of
operation of those premises, the number of tables permitted in those
premises, and wagering limits in permissible games conducted in those
premises are proper subjects for regulation by local governmental
bodies. However, consideration of those same subjects by a state
regulatory agency, as specified in this chapter, is warranted when
local governmental regulation respecting those subjects is inadequate
or the regulation fails to safeguard the legitimate interests of
residents in other governmental jurisdictions.
(l) The exclusion or ejection of certain persons from gambling
establishments is necessary to effectuate the policies of this
chapter and to maintain effectively the strict regulation of licensed
gambling.
(m) Records and reports of cash and credit transactions involving
gambling establishments may have a high degree of usefulness in
criminal and regulatory investigations and, therefore, licensed
gambling operators may be required to keep records and make reports
concerning significant cash and credit transactions.
19801.2. The Legislature further finds and declares as follows:
Appropriate regulation of banking and percentage games or of
gambling devices consistent with public safety and welfare would
require, at a minimum, all of the following safeguards:
(a) The creation of an adequately funded gambling control
commission with comprehensive powers to establish minimum standards
and technical specifications for gambling equipment and devices.
(b) The creation of an adequately funded law enforcement
capability within state government to inspect, test, and evaluate
gambling equipment and devices and modifications thereto.
(c) An appropriation by the Legislature to sufficiently fund a
full-time commission and law enforcement capability with
responsibilities commensurate with the expanded scope of gambling.
(d) The enactment of necessary regulations setting forth standards
and procedures for the licensing of persons connected with the
manufacture, sale, and distribution of equipment and devices in this
state.
(e) The enactment of standards related to the trustworthiness and
fairness of equipment and devices, upon the commission's
recommendation to the Legislature.
(f) The enactment of statutory provisions governing the
importation, transportation, sale, and disposal of equipment and
devices, upon the commission's recommendation to the Legislature.
(g) The enactment of statutes providing for appropriate inspection
and testing of equipment and devices, upon the commission's
recommendation to the Legislature.
19802. (a) It is the intent of the Legislature, in enacting this
chapter, to provide uniform, minimum standards of regulation of
permissible gambling activities and the operation of lawful gambling
establishments.
(b) Nothing in this chapter shall be construed to preclude any
city, county, or city and county from prohibiting any gambling
activity, from imposing more stringent local controls or conditions
upon gambling than are imposed by this chapter or by the board, from
inspecting gambling premises to enforce applicable state and local
laws, or from imposing any local tax or license fee, if the
prohibition, control, condition, inspection, tax, or fee is not
inconsistent with this chapter. Nothing in this chapter shall be
construed to affect the responsibility of local law enforcement
agencies to enforce the laws of this state, including this chapter.
19804. (a) In any action for declaratory or injunctive relief, or
for relief by way of any extraordinary writ, other than an action
initiated pursuant to Section 19922, wherein the construction,
application, or enforcement of this chapter, or any regulation
adopted pursuant thereto, or any order of the division or the board
issued pursuant thereto, is called into question, a court shall not
grant any preliminary or permanent injunction, or any peremptory writ
of mandate, certiorari, or prohibition, in connection therewith,
except as follows:
(1) Upon proof by clear and convincing evidence that the division
or the board is abusing or threatens to abuse its discretion.
(2) Upon proof by clear and convincing evidence that the division
or the board is exceeding or threatens to exceed its jurisdiction.
(b) No temporary injunction or other provisional order shall issue
to restrain, stay, or otherwise interfere with any action by the
division or the board except upon a finding by the court, based on
clear and convincing evidence, that the public interest will not be
prejudiced thereby, and no such order shall be effective for more
than 15 calendar days.
(c) Nothing herein shall be construed to relieve a petitioner's
obligation to exhaust administrative remedies.
(d) In an action for relief of any nature wherein the
construction, application, or enforcement of this chapter, or any
regulation adopted pursuant thereto, or any order of the division or
board issued pursuant thereto, is called into question, the party
filing the pleading shall furnish a copy thereof to the division.
The copy shall be furnished by the party filing the pleading within
10 business days after filing.
19805. As used in this chapter, the following definitions shall
apply:
(a) "Affiliate" means a person who, directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under
common control with, a specified person.
(b) "Applicant" means any person who has applied for, or is about
to apply for, a state gambling license, manufacturer's or distributor'
s license, or approval of any act or transaction for which division
approval is required or permitted under this chapter.
(c) "Board" means the California Gambling Control Board.
(d) "Controlled gambling" means to deal, operate, carry on,
conduct, maintain, or expose for play any controlled game.
(e) "Controlled game" means any controlled game, as defined by
subdivision (e) of Section 337j of the Penal Code.
(f) "Director," when used in connection with a corporation, means
any director of a corporation or any person performing similar
functions with respect to any organization. In any other case,
"director" means the Director of the Division of Gambling Control.
(g) "Division" means the Division of Gambling Control in the
Department of Justice.
(h) "Finding of suitability" means a finding that a person meets
the qualification criteria described in subdivisions (a) and (b) of
Section 19848, and that the person would not be disqualified from
holding a state gambling license on any of the grounds specified in
subdivision (a) of Section 19850.
(i) "Game" and "gambling game" means any controlled game.
(j) "Gambling" means to deal, operate, carry on, conduct,
maintain, or expose for play any controlled game.
(k) "Gambling enterprise employee" means any natural person
employed in the operation of a gambling enterprise, including,
without limitation, dealers, floormen, security employees, countroom
personnel, cage personnel, collection personnel, surveillance
personnel, data processing personnel, appropriate maintenance
personnel, waiters and waitresses, and secretaries, or any other
natural person whose employment duties require or authorize access to
restricted gambling establishment areas.
(l) "Gambling establishment" or "establishment" means one or more
rooms where any controlled gambling occurs.
(m) "Gambling license" means any license issued by the state that
authorizes the person named therein to conduct a gambling operation.
(n) "Gambling operation" means one or more controlled games that
are dealt, operated, carried on, conducted, maintained, or exposed
for play for commercial gain.
(o) Except as provided by regulation, "gross revenue" means the
total of all compensation received for conducting any controlled
game, and includes interest received in payment for credit extended
by an owner licensee to a patron for purposes of gambling.
(p) Except as determined by regulation, "independent agent" means
any person who does either of the following:
(1) Approves or grants the extension of gambling credit on behalf
of a gambling licensee or collects debt evidenced by a credit
instrument.
(2) Contracts with an owner licensee, or an affiliate thereof, to
provide services consisting of arranging transportation or lodging
for guests at a gambling establishment.
(q) "Institutional investor" means any retirement fund
administered by a public agency for the exclusive benefit of federal,
state, or local public employees, any investment company registered
under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et
seq.), any collective investment trust organized by banks under Part
Nine of the Rules of the Comptroller of the Currency, any closed-end
investment trust, any chartered or licensed life insurance company or
property and casualty insurance company, any banking and other
chartered or licensed lending institution, any investment advisor
registered under the Investment Advisors Act of 1940 (15 U.S.C. Sec.
80b-1 et seq.) acting in that capacity, and such other persons as the
board may determine for reasons consistent with the policies of this
chapter.
(r) "Key employee" means any natural person employed in the
operation of a gambling enterprise in a supervisory capacity or
empowered to make discretionary decisions that regulate gambling
operations, including, without limitation, pit bosses, shift bosses,
credit executives, cashier operations supervisors, gambling operation
managers and assistant managers, managers or supervisors of security
employees, or any other natural person designated as a key employee
by the division for reasons consistent with the policies of this
chapter.
(s) "Key employee license" means a state license authorizing the
holder to be associated with a gambling enterprise as a key employee.
(t) "Licensed gambling establishment" means the gambling premises
encompassed by a state gambling license.
(u) "Limited partnership" means a partnership formed by two or
more persons having as members one or more general partners and one
or more limited partners.
(v) "Limited partnership interest" means the right of a general or
limited partner to any of the following:
(1) To receive from a limited partnership any of the following:
(A) A share of the revenue.
(B) Any other compensation by way of income.
(C) A return of any or all of his or her contribution to capital
of the limited partnership.
(2) To exercise any of the rights provided under state law.
(w) "Owner licensee" means an owner of a gambling enterprise who
holds a state gambling license.
(x) Unless otherwise indicated, "person" includes a natural
person, corporation, partnership, limited partnership, trust, joint
venture, association, or any other business organization.
(y) "Publicly traded racing association" means a corporation
licensed to conduct horseracing and simulcast wagering pursuant to
Chapter 4 (commencing with Section 19400) whose stock is publicly
traded.
(z) "Qualified racing association" means a corporation licensed to
conduct horseracing and simulcast wagering pursuant to Chapter 4
(commencing with Section 19400) that is a wholly owned subsidiary of
a corporation whose stock is publicly traded.
(aa) "Work permit" means any card, certificate, or permit issued
by the division or by a county, city, or city and county, whether
denominated as a work permit, registration card, or otherwise,
authorizing the holder to be employed as a gambling enterprise
employee or to serve as an independent agent. A document issued by
any governmental authority for any employment other than gambling is
not a valid work permit for the purposes of this chapter.
19806. Nothing in this chapter shall be construed in any way to
permit or authorize any conduct made unlawful by Chapter 9
(commencing with Section 319) of, or Chapter 10 (commencing with
Section 330) of, Title 9 of Part 1 of the Penal Code, or any local
ordinance.
19807. Except as otherwise provided in this chapter, whenever the
division or board is a defendant or respondent in any proceeding, or
when there is any legal challenge to regulations issued by the board
or division, venue for the proceeding shall be in the County of
Sacramento, the City and County of San Francisco, the County of Los
Angeles, or the County of San Diego.
19808. Upon the occurrence of one of the events specified in
Section 66 of the act that added this chapter, any reference in this
chapter to a section repealed upon the occurrence of one of those
events shall be deemed to be a reference to the successor section of
the same number with the suffix "A" made operative pursuant to
Section 66 of the act that added this chapter.
Article 2. Administration
19809. (a) There is within the Department of Justice the Division
of Gambling Control as provided in Section 15001 of the Government
Code. Except as otherwise provided in this chapter, any power or
authority of the division described in this chapter may be exercised
by the Attorney General or such other person as the Attorney General
may delegate.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19810. (a) There is in state government the California Gambling
Control Board, consisting of three members.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19811. (a) Each member of the board shall be a citizen of the
United States and a resident of this state.
(b) No Member of the Legislature, no person holding any elective
office in state, county, or local government, and no officer or
official of any political party is eligible for appointment to the
board.
(c) No more than two of the three members of the board shall be
members of the same political party.
(d) A person is ineligible for appointment to the board if, within
two years prior to appointment, the person, or any partnership or
corporation in which the person is a principal, was employed by,
retained by, or derived substantial income from, any gambling
establishment.
For purposes of this subdivision, "gambling establishment" means
one or more rooms wherein any gaming within the meaning of Chapter 10
(commencing with Section 330) of Title 9 of Part 1 of the Penal
Code, or any controlled game within the meaning of Section 337j of
the Penal Code, is conducted, whether or not the activity occurred in
California.
(e) One member of the board shall be a certified public accountant
with auditing experience, one member shall be an attorney and a
member of the State Bar of California with regulatory law experience,
and one member shall be from the public at large.
(f) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19812. (a) Of the members initially appointed, one shall be
appointed for a term of two years, one shall be appointed for a term
of three years, and one shall be appointed for a term of five years.
After the initial terms, the term of office of each member of the
board is five years.
(b) The Governor shall appoint the members of the board, subject
to confirmation by the Senate, and shall designate one member to
serve as chairperson. The initial appointments shall be made on or
before March 1, 1998. Thereafter, vacancies shall be filled within
60 days of the date of the vacancy by the Governor, subject to
confirmation by the Senate.
(c) The Governor may remove any board member for incompetence,
neglect of duty, or corruption upon first giving him or her a copy of
the charges and an opportunity to be heard.
(d) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19813. (a) Before entering upon the duties of his or her office,
each member shall subscribe to the constitutional oath of office and,
in addition, swear that he or she is not, and during his or her term
of office shall not be, pecuniarily interested in, or doing business
with, any person, business, or organization holding a gambling
license.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19814. (a) Each board member shall receive a per diem of one
hundred dollars ($100) for each day spent in attendance at meetings
scheduled by the chairperson of the board for the purpose of
fulfilling the duties of the board pursuant to this chapter, and
shall be reimbursed for traveling and other expenses necessarily
incurred in the performance of official duties.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19815. (a) The board shall have an executive secretary appointed
by the board. A person is ineligible for appointment as executive
secretary or deputy executive secretary if, within two years prior to
appointment, the person, or any partnership or corporation in which
the person is a principal, was employed by, retained by, or derived
substantial income from, any gambling establishment, whether or not a
controlled gambling establishment.
(b) The executive secretary shall receive the annual salary
established by the board and approved by the Department of Personnel
Administration. The executive secretary shall be the board's
executive officer and shall carry out and execute the duties as
specified by law and by the board and, for that purpose, the
executive secretary may appoint staff and clerical personnel. It is
the intent of the Legislature that the employment of assistants and
clerical personnel as provided by this subdivision shall not be
accomplished by any reduction in the reasonably necessary staffing
level of the division.
19816. (a) The division shall furnish to the board all equipment,
supplies, and office space that may be necessary for the purpose of
carrying out the board's functions.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19817. (a) Except as otherwise provided in this chapter, Article
9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division
3 of Title 2 of the Government Code applies to meetings of the board.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19818. The executive secretary of the board may appoint no more
than two attorneys as counsel to the board. However, in lieu of
representation by the attorneys appointed pursuant to this section,
the board may request representation by the Attorney General in any
proceeding before any court.
19820. (a) The division shall maintain a file of all applications
for licenses under this chapter, together with a record of all
action taken with respect to those applications. The file and record
shall be open to public inspection.
(b) The division and board may maintain files and records as they
deem appropriate. Except as provided in this chapter, the records of
the division are exempt from disclosure under Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code.
(c) Except as necessary for the administration of this chapter, no
member of the board and no official, employee, or agent of the board
or division, having obtained access to confidential records or
information in the performance of duties pursuant to this chapter,
shall knowingly disclose or furnish the records or information, or
any part thereof, to any person who is not authorized by law to
receive it. A violation of this subdivision is a misdemeanor.
(d) Notwithstanding subdivision (k) of Section 1798.24 of the
Civil Code, a court shall not compel disclosure of personal
information in the possession of the division to any person in any
civil proceeding wherein the division or the board is not a party,
except for good cause and upon a
showing that the information cannot otherwise be obtained.
Nothing herein shall be construed to authorize the disclosure of
personal information that would otherwise be exempt from disclosure.
(e) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19821. (a) All files, records, reports, and other information in
possession of any state or local governmental agency that are
relevant to an investigation by the division conducted pursuant to
this chapter shall be made available to the division as requested.
However, any tax information received from a governmental agency
shall be used solely for effectuating the purposes of this chapter.
To the extent that the files, records, reports, or information
described in this section are confidential or otherwise privileged
from disclosure under any law or exercise of discretion, they shall
not lose that confidential or privileged status for having been
disclosed to the division.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19822. (a) The division and the board are responsible for all of
the following:
(1) Assuring that licenses, approvals, and permits are not issued
to, or held by, unqualified or disqualified persons, or by persons
whose operations are conducted in a manner that is inimical to the
public health, safety, or welfare.
(2) Assuring that there is no material involvement, directly or
indirectly, with a licensed gambling operation, or the ownership or
management thereof, by unqualified or disqualified persons, or by
persons whose operations are conducted in a manner that is inimical
to the public health, safety, or welfare.
(3) Investigating the qualifications of applicants before any
license is issued, and investigating any request for any approval or
permission that may be required pursuant to this chapter.
(b) For purposes of this section, "unqualified person" means a
person who is found to be unqualified pursuant to the criteria set
forth in Section 19848, and "disqualified person" means a person who
is found to be disqualified pursuant to the criteria set forth in
Section 19850.
(c) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19822.1. (a) The responsibilities of the division include,
without limitation, all of the following:
(1) Monitoring the conduct of all licensees and other persons
having a material involvement, directly or indirectly, with a
gambling operation or its holding company, for the purpose of
ensuring that licenses are not issued or held by, and that there is
no direct or indirect material involvement with, a gambling operation
or holding company by ineligible, unqualified, disqualified, or
unsuitable persons, or persons whose operations are conducted in a
manner that is inimical to the public health, safety, or welfare.
(2) Investigating suspected violations of this chapter or laws of
this state relating to gambling, including any activity prohibited by
Chapter 9 (commencing with Section 319) or Chapter 10 (commencing
with Section 330) of Title 9 of Part 1 of the Penal Code.
(3) Investigating complaints that are lodged against licensees, or
other persons associated with a gambling operation, by members of
the public.
(4) Initiating, where appropriate, disciplinary actions as
provided in this chapter.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19823. (a) The division shall have all powers necessary and
proper to enable it fully and effectually to carry out the policies
and purposes of this chapter, including, without limitation, the
power to do all of the following:
(1) Require any person to apply for a license or approval as
specified in this chapter.
(2) For any cause deemed reasonable by the division, deny any
application for a license, permit, or approval provided for in this
chapter, or limit, condition, or restrict any such license, permit,
or approval.
(3) Approve or disapprove transactions, events, and processes as
provided in this chapter.
(4) Take actions deemed to be reasonable to ensure that no
ineligible, unqualified, disqualified, or unsuitable persons are
associated with controlled gambling activities.
(5) Take actions deemed to be reasonable to ensure that gambling
activities take place only in suitable locations.
(6) Grant temporary licenses or approvals on appropriate terms and
conditions.
(7) Institute a civil action in any superior court against any
person subject to this chapter to restrain a violation of this
chapter. An action brought against a person pursuant to this section
does not preclude a criminal action or administrative proceeding
against that person by the Attorney General or any district attorney
or city attorney.
(8) Approve the play of any controlled game, including placing
restrictions and limitations on how a controlled game may be played.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19823.1. (a) In addition to other powers and duties specified in
this chapter, the board may grant, deny, revoke, suspend, or impose
conditions, restrictions, or limitations on licenses, permits, or
approvals as provided in this chapter.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19825. (a) The division has all powers necessary and proper to
enable it to carry out fully and effectually the duties and
responsibilities of the division specified in this chapter. The
investigatory powers of the division include, but are not limited to,
all of the following:
(1) Upon approval of the director, and without notice or warrant,
the division may take any of the following actions:
(A) Visit, investigate, and place expert accountants, technicians,
and any other person, as it may deem necessary, in all areas of the
premises wherein controlled gambling is conducted for the purpose of
determining compliance with the rules and regulations adopted
pursuant to this chapter.
(B) Visit, inspect, and examine all premises where gambling
equipment is manufactured, sold, or distributed.
(C) Inspect all equipment and supplies in any gambling
establishment or in any premises where gambling equipment is
manufactured, sold, or distributed.
(D) Summarily seize, remove, and impound any equipment, supplies,
documents, or records from any licensed premises for the purpose of
examination and inspection. However, upon reasonable demand by the
licensee or the licensee's authorized representative, a copy of all
documents and records seized shall be made and left on the premises.
(E) Demand access to, and inspect, examine, photocopy, and audit
all papers, books, and records of an owner licensee on the gambling
premises in the presence of the licensee or his or her agent.
(2) Except as provided in paragraph (1), upon obtaining an
inspection warrant pursuant to Section 1822.60 of the Code of Civil
Procedure, the division may inspect and seize for inspection,
examination, or photocopying any property possessed, controlled,
bailed, or otherwise held by any applicant, licensee, or any
intermediary company, or holding company.
(3) The division may investigate, for purposes of prosecution, any
suspected criminal violation of this chapter. However, nothing in
this paragraph limits the powers conferred by any other provision of
law on agents of the division who are peace officers.
(4) The division may do both of the following:
(A) Issue subpoenas to require the attendance and testimony of
witnesses and the production of books, records, documents, and
physical materials.
(B) Administer oaths, examine witnesses under oath, take evidence,
and take depositions and affidavits or declarations.
Notwithstanding Section 11189 of the Government Code, the division,
without leave of court, may take the deposition of any applicant or
any licensee. Sections 11185 and 11191 of the Government Code do not
apply to a witness who is an applicant or a licensee.
(b) (1) Subdivision (a) shall not be construed to limit
warrantless inspections except as required by the California
Constitution or the United States Constitution.
(2) Subdivision (a) shall not be construed to prevent entries and
administrative inspections, including seizures of property, without a
warrant in the following circumstances:
(A) With the consent of the owner, operator, or agent in charge of
the premises.
(B) In situations presenting imminent danger to health and safety.
(C) In situations involving inspection of conveyances where there
is reasonable cause to believe that the mobility of the conveyance
makes it impractical to obtain a warrant, or in any other exceptional
or emergency circumstance where time or opportunity to apply for a
warrant is lacking.
(D) In accordance with this chapter.
(E) In all other situations where a warrant is not
constitutionally required.
19827. (a) Without limiting any privilege that is otherwise
available under law, any communication or document from, or
concerning, an applicant, licensee, or registrant is absolutely
privileged under any of the following circumstances:
(1) It was made or published by an agent or employee of the
division or board in the proper discharge of official duties or in
the course of any proceeding under this chapter.
(2) It was required to be made or transmitted to the division or
board, or any of their agents or employees by law, regulation, or
subpoena of the division or the board.
(3) It was made or transmitted to the division for the purpose of
causing, or during the course of, an investigation conducted pursuant
to this chapter. No statement, and no publication of any document,
described in this subdivision, shall impose liability for defamation
or constitute a ground for recovery in any civil action.
(b) If any document or communication provided to the division
contains any information that is privileged pursuant to Division 8
(commencing with Section 900) of the Evidence Code, or any other
provision of law, that privilege is not waived or lost because the
document or communication is disclosed to the division or the board
or to any of their agents or employees.
(c) The division, the board, and their agents and employees shall
not release or disclose any information, documents, or communications
provided by an applicant or licensee that are privileged pursuant to
Division 8 (commencing with Section 900) of the Evidence Code,
without the prior written consent of the applicant or licensee, or
pursuant to lawful court order after timely notice of the proceedings
has been given to the applicant or licensee. An application to a
court for an order requiring the division or the board to release any
information declared by law to be confidential shall be made only
upon motion made in writing on not less than 10 business days' notice
to the division, and to all persons who may be affected by the entry
of the order.
19828. Every district attorney, and every state and local law
enforcement agency, shall furnish to the division, on forms prepared
by the division, all information obtained during the course of any
substantial investigation or prosecution of any person, as determined
by the division, if it appears that a violation of any law related
to gambling has occurred, including any violation of Chapter 9
(commencing with Section 319) or Chapter 10 (commencing with Section
330) of Title 9 of Part 1 of the Penal Code.
19829. There is an investigative account within the Gambling
Control Fund. All funds received for the purpose of paying expenses
incurred by the division for investigation of an application for a
license or approval under this chapter shall be deposited in the
account. Expenses may be advanced from the investigative account to
the division by the director.
Article 3. Regulations
19830. (a) The division may adopt regulations for the
administration and enforcement of this chapter. To the extent
appropriate, regulations of the division shall take into
consideration the operational differences of large and small
establishments. The board may adopt regulations relating to its
internal procedures that may be required and that are not
inconsistent with this chapter.
(b) Subject to subdivision (d), Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code does not apply to the following regulations of the division, if
adopted within 90 days after the effective date of this chapter:
(1) Regulations described in subdivisions (a), (b), (e), (g), (h),
(i) to (n), inclusive, (p), and (q) of Section 19834.
(2) Regulations adopted for the purpose of implementing Section 62
of the act that enacted this chapter.
(c) Any regulation adopted pursuant to subdivision (b) shall be
filed with the Secretary of State and shall be effective immediately
upon that filing.
(d) Except as otherwise provided in this subdivision, no
regulation adopted pursuant to subdivision (b) shall be valid after
September 1, 1998, unless the regulation has been subsequently
readopted by the division in accordance with Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code, subject to all of the following:
(1) This subdivision does not apply to a regulation that is
exempted from Article 5 (commencing with Section 11346) of Chapter
3.5 of Division 3 of Title 2 of the Government Code, by operation of
subdivision (a) of Section 11346.1 of the Government Code.
(2) If, prior to September 1, 1998, the division has mailed a
notice described in Section 11346.4 of the Government Code with
respect to a regulation adopted pursuant to subdivision (b), the
regulation shall not cease to be effective pursuant to this
subdivision until the earlier of one of the following events:
(A) The readopted regulation is filed with the Secretary of State
pursuant to subdivision (a) of Section 11349.3, or subdivision (e) of
Section 11349.5, of the Government Code.
(B) The readopted regulation has been disapproved by the Office of
Administrative Law and the time within which a request for review
may be filed pursuant to Section 11349.5 of the Government Code has
expired.
(C) The readopted regulation is disapproved by the Office of
Administrative Law, and the Governor transmits a decision pursuant to
subdivision (c) of Section 11349.5 of the Government Code affirming
the disapproval.
19834. The regulations adopted by the division shall do all of
the following:
(a) With respect to applications, registrations, investigations,
and fees, the regulations shall include, but not be limited to,
provisions that do all of the following:
(1) Prescribe the method and form of application and registration.
(2) Prescribe the information to be furnished by any applicant,
licensee, or registrant concerning, as appropriate, the person's
personal history, habits, character, associates, criminal record,
business activities, organizational structure, and financial affairs,
past or present.
(3) Prescribe the information to be furnished by an owner licensee
relating to the licensee's gambling employees.
(4) Require fingerprinting or other methods of identification of
an applicant, licensee, or employee of a licensee.
(5) Prescribe the manner and method of collection and payment of
fees and issuance of licenses.
(b) Provide for the approval of game rules and equipment by the
division to ensure fairness to the public and compliance with state
laws.
(c) Implement the provisions of this chapter relating to
licensing.
(d) Require owner licensees to report and keep records of
transactions, as determined by the division, involving cash or
credit. The regulations may include, without limitation, regulations
requiring owner licensees to file with the division reports similar
to those required by Sections 5313 and 5314 of Title 31 of the United
States Code, and by Sections 103.22 and 103.23 of Title 31 of the
Code of Federal Regulations, and any successor provisions thereto,
from financial institutions, as defined in Section 5312 of Title 31
of the United States Code and Section 103.11 of Title 31 of the Code
of Federal Regulations, and any successor provisions.
(e) Provide for the receipt of protests and written comments on an
application by public agencies, public officials, local governing
bodies, or residents of the location of the gambling establishment or
future gambling establishment.
(f) Provide for the disapproval of advertising by licensed
gambling establishments that is determined by the division to be
deceptive to the public. Regulations adopted by the division for
advertising by licensed gambling establishments shall be consistent
with the advertising regulations adopted by the California Horse
Racing Board and the Lottery Commission. Advertisement that appeals
to children or adolescents, or offers gambling as a means of becoming
wealthy is presumptively deceptive.
(g) Govern all of the following:
(1) The extension of credit.
(2) The cashing, deposit, and redemption of checks or other
negotiable instruments.
(3) The verification of identification in monetary transactions.
(h) Prescribe minimum procedures for adoption by owner licensees
to exercise effective control over their internal fiscal and gambling
affairs, which shall include, but not be limited to, provisions for
all of the following:
(1) The safeguarding of assets and revenues, including the
recording of cash and evidences of indebtedness.
(2) Prescribing the manner in which compensation from games and
gross revenue shall be computed and reported by an owner licensee.
(3) The provision of reliable records, accounts, and reports of
transactions, operations, and events, including reports to the
division.
(i) Provide for the adoption and use of internal audits, whether
by qualified internal auditors or by certified public accountants.
As used in this subdivision, "internal audit" means a type of control
that operates through the testing and evaluation of other controls
and that is also directed toward observing proper compliance with the
minimum standards of control prescribed in subdivision (h).
(j) Require periodic financial reports from each owner licensee.
(k) Specify standard forms for reporting financial conditions,
results of operations, and other relevant financial information.
(l) Formulate a uniform code of accounts and accounting
classifications to ensure consistency, comparability, and effective
disclosure of financial information.
(m) Prescribe intervals at which the information in subdivisions
(j) and (k) shall be furnished to the division.
(n) Require audits to be conducted, in accordance with generally
accepted auditing standards, of the financial statements of all owner
licensees whose annual gross revenues equal or exceed a specified
sum. However, nothing herein shall be construed to limit the
division's authority to require audits of any owner licensee.
Audits, compilations, and reviews provided for in this subdivision
shall be made by independent certified public accountants licensed to
practice in this state.
(o) Restrict, limit, or otherwise regulate any activity that is
related to the conduct of controlled gambling, consistent with the
purposes of this chapter.
(p) Define and limit the area, games, and equipment permitted, or
the method of operation of games and equipment, when, at the request
of a sheriff or district attorney, the division determines that local
regulation of these subjects is insufficient to protect the health,
safety, or welfare of residents in geographical areas proximate to a
gambling establishment.
(q) Prohibit gambling establishments from cashing checks drawn
against any federal, state, or county fund, including, but not
limited to, social security, unemployment insurance, disability
payments, or public assistance payments.
However, a gambling establishment shall not be prohibited from
cashing any payroll checks or checks for the delivery of goods or
services that are drawn against a federal, state, or county fund.
19834.5. (a) The division shall not prohibit, on a statewide
basis, the play of any game or restrict the manner in which any game
is played, unless the division, in a proceeding pursuant to this
article, finds that the game, or the manner in which the game is
played, violates a law of the United States, a law of this state, or
a local ordinance.
(b) Nothing in this section shall be construed to limit the powers
of the division in a proceeding against a licensee pursuant to
Article 9.5 (commencing with Section 19920).
(c) No regulation prohibiting a game or the manner in which a game
is played shall be deemed to be an emergency regulation.
19834.6. The division shall not prohibit, on a statewide basis,
the placing of a wager on a controlled game by a person at a gaming
table, if the person is present at the table and actively
participating in the hand with a single seated player upon whose hand
the wagers are placed.
19835. (a) The division, by regulation, shall provide for the
formulation of a list of persons who are to be excluded or ejected
from any gambling establishment. The list may include any person
whose presence in the establishment is determined by the division to
pose a threat to the interests of this state or to controlled
gambling, or both.
(b) In making the determination described in subdivision (a), the
division may consider, but is not limited to considering, any of the
following:
(1) Prior conviction of a crime that is a felony in this state or
under the laws of the United States, a crime involving moral
turpitude, or a violation of the gambling laws of this or any other
state.
(2) The violation of, or conspiracy to violate, the provisions of
this chapter relating to the failure to disclose an interest in a
gambling establishment for which the person is required to obtain a
license, or the willful evasion of fees.
(3) A notorious or unsavory reputation that would adversely affect
public confidence and trust that the gambling industry is free from
criminal or corruptive elements.
(4) An order of exclusion or ejection from a racing inclosure
issued by the California Horse Racing Board.
(c) The division shall distribute the list of persons who are to
be excluded or ejected from any gambling establishment to all owner
licensees and shall provide notice to any persons included on the
list.
(d) The division shall adopt regulations establishing procedures
for hearing of petitions by persons who are ejected or excluded from
licensed premises pursuant to this section or pursuant to Section
19835.5.
(e) The board may revoke, limit, condition, or suspend the license
of an owner, or fine an owner licensee, if that licensee knowingly
fails to exclude or eject from the gambling establishment of that
licensee any person included on the list of persons to be excluded or
ejected.
19835.5. (a) A licensee may remove from his or her licensed
premises any person who, while on the premises:
(1) Is a disorderly person, as defined by Section 647 of the Penal
Code.
(2) Interferes with a lawful gambling operation.
(3) Solicits or engages in any act of prostitution.
(4) Begs, is boisterous, or is otherwise offensive to other
persons.
(5) Commits any public offense.
(6) Is intoxicated.
(7) Is a person who the division, by regulation, has determined
should be excluded from licensed gambling establishments in the
public interest.
(b) Nothing in this section shall be deemed, expressly or
impliedly, to preclude a licensee from exercising the right to deny
access to or to remove any person from its premises or property for
any reason the licensee deems appropriate.
19836. This article shall remain in effect only until the
occurrence of the events specified in Section 66 of the act that
added this chapter, and as of that date is repealed, unless a later
enacted statute, which is enacted before the occurrence of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
Article 4. Licensing
19840. Every person who, either as owner, lessee, or employee,
whether for hire or not, either solely or in conjunction with others,
deals, operates, carries on, conducts, maintains, or exposes for
play any controlled game in this state, or who receives, directly or
indirectly, any compensation or reward, or any percentage or share of
the money or property played, for keeping, running, or carrying on
any controlled game in this state, shall obtain, and thereafter
maintain a valid state gambling license, key employee license, or
work permit, as specified in this chapter. In any criminal
prosecution for violation of this section, the punishment shall be as
provided in Section 337j of the Penal Code.
19840.5. (a) The
owner of a gambling enterprise shall apply for and obtain a state
gambling license.
(b) Other persons who also obtain a state gambling license, or key
employee license, as required by this chapter, shall not receive a
separate license certificate, but the license of every such person
shall be endorsed on the license that is issued to the owner of the
gambling enterprise.
19841. (a) An owner of a gambling enterprise that is not a
natural person shall not be eligible for a state gambling license
unless each of the following persons individually applies for and
obtains a state gambling license:
(1) If the owner is a corporation, then each officer, director,
and shareholder, other than a holding or intermediary company, of the
owner. The foregoing does not apply to an owner that is either a
publicly traded racing association or a qualified racing association.
(2) If the owner is a publicly traded racing association, then
each officer, director, and owner, other than an institutional
investor, of 5 percent or more of the outstanding shares of the
publicly traded corporation.
(3) If the owner is a qualified racing association, then each
officer, director, and shareholder, other than an institutional
investor, of the subsidiary corporation and any owner, other than an
institutional investor, of 5 percent or more of the outstanding
shares of the publicly traded corporation.
(4) If the owner is a partnership, then every general and limited
partner of, and every trustee or person, other than a holding or
intermediary company, having or acquiring a direct or beneficial
interest in, that partnership owner.
(5) If the owner is a trust, then the trustee, every beneficiary,
and, in the discretion of the division, the trustor of the trust.
(6) If the owner is a business organization other than a
corporation, partnership, or trust, then all those persons as the
division may require, consistent with this chapter.
(7) Each person who receives, or is to receive, any percentage
share of the revenue earned by the owner from gambling activities.
(8) Every employee, agent, guardian, personal representative,
lender, or holder of indebtedness of the owner who, in the judgment
of the division, has the power to exercise a significant influence
over the gambling operation.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19842. (a) The division, by regulation or order, may require that
the following persons register with the division, apply for a
finding of suitability, or apply for a gambling license:
(1) Any person who furnishes any services or any property to a
gambling enterprise under any arrangement whereby that person
receives payments based on earnings, profits, or receipts from
controlled gambling.
(2) Any person who owns an interest in the premises of a licensed
gambling establishment or in real property used by a licensed
gambling establishment.
(3) Any person who does business on the premises of a licensed
gambling establishment.
(4) Any person who is an independent agent of, or does business
with, a gambling enterprise as a ticket purveyor, a tour operator,
the operator of a bus program, or the operator of any other type of
travel program or promotion operated with respect to a licensed
gambling establishment.
(5) Any person who provides any goods or services to a gambling
enterprise for compensation that the division finds to be grossly
disproportionate to the value of the goods or services provided.
(6) Every person who, in the judgment of the division, has the
power to exercise a significant influence over the gambling
operation.
(b) If a publicly traded corporation is engaged in activities
described in paragraphs (2), (3), and (4) of subdivision (a), the
division may require the corporation and the following other persons
to apply for and obtain a license or finding of suitability:
(1) Any officer or director.
(2) Any owner, other than an institutional investor, of 5 percent
or more of the outstanding shares of the corporation.
(c) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19844. (a) Every key employee shall apply for and obtain a key
employee license.
(b) Licenses issued to key employees shall be for specified
positions only, and those positions shall be enumerated in the
endorsement described in subdivision (b) of Section 19840.5.
(c) No person may be issued a key employee license unless the
person would qualify for a state gambling license.
(d) No person may be issued a key employee license unless the
person is a resident of this state.
19846. (a) 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
division, is required to apply for a gambling license or a finding of
suitability shall file the application within 30 calendar days after
receipt of the order.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19847. (a) Any person who the division determines is qualified to
receive a state license, having due consideration for the proper
protection of the health, safety, and general welfare of the
residents of the State of California and the declared policy of this
state, may be issued a license. The burden of proving his or her
qualifications to receive any license is on the applicant.
(b) An application to receive a license constitutes a request for
a determination of the applicant's general character, integrity, and
ability to participate in, engage in, or be associated with,
controlled gambling.
(c) In reviewing an application for any gambling license, the
division shall consider whether issuance of the license is inimical
to public health, safety, or welfare, and whether issuance of the
license will undermine public trust that the gambling operations with
respect to which the license would be issued are free from criminal
and dishonest elements and would be conducted honestly.
(d) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19848. No gambling license shall be issued unless, based on all
of the information and documents submitted, the division is satisfied
that the applicant is all of the following:
(a) A person of good character, honesty, and integrity.
(b) A person whose prior activities, criminal record, if any,
reputation, habits, and associations do not pose a threat to the
public interest of this state, or to the effective regulation and
control of controlled gambling, or create or enhance the dangers of
unsuitable, unfair, or illegal practices, methods, and activities in
the conduct of controlled gambling or in the carrying on of the
business and financial arrangements incidental thereto.
(c) A person that is in all other respects, qualified to be
licensed as provided in this chapter.
(d) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19848.5. (a) Except as provided in subdivision (b), 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) does not apply to a publicly traded racing
association, a qualified racing association, or any person who is
licensed pursuant to paragraphs (2) or (3) of subdivision (a) of
Section 19841.
19850. (a) The division shall deny a license to any applicant who
is disqualified for any of the following reasons:
(1) Failure of the applicant to clearly establish eligibility and
qualification in accordance with this chapter.
(2) Failure of the applicant to provide information,
documentation, and assurances required by this chapter or requested
by the director, or failure of the applicant to reveal any fact
material to qualification, or the supplying of information that is
untrue or misleading as to a material fact pertaining to the
qualification criteria.
(3) Conviction of the applicant for any crime punishable as a
felony.
(4) Conviction of the applicant for any misdemeanor involving
dishonesty or moral turpitude within the 10-year period immediately
preceding the submission of the application, unless the applicant has
been granted relief pursuant to Section 1203.4, 1203.4a, or 1203.45
of the Penal Code.
(5) Association of the applicant with criminal profiteering
activity or organized crime, as defined by Section 186.2 of the Penal
Code.
(6) Contumacious defiance by the applicant of any legislative
investigatory body, or other official investigatory body of any state
or of the United States, when that body is engaged in the
investigation of crimes relating to gambling; official corruption
related to gambling activities; or criminal profiteering activity or
organized crime, as defined by Section 186.2 of the Penal Code.
(7) The applicant is less than 21 years of age.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19851. (a) The division shall deny a gambling license with
respect to any gambling establishment that is located in a city,
county, or city and county that does not have an ordinance governing
all of the following matters:
(1) The hours of operation of gambling establishments.
(2) Patron security and safety in and around the gambling
establishments.
(3) The location of gambling establishments.
(4) Wagering limits in gambling establishments.
(5) The number of gambling tables in each gambling establishment
and in the jurisdiction.
(b) In any city, county, or city and county in which the local
gambling ordinance does not govern the matters specified in
subdivision (a), any amendment to the ordinance to govern those
matters is not subject to Section 19950.1.
(c) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19852. (a) In addition to other grounds stated in this chapter,
the division shall consider denying a gambling license for any of the
following reasons:
(1) If issuance of the license with respect to the proposed
gambling establishment or expansion would tend unduly to create law
enforcement problems in a city, county, or city and county other than
the city, county, or city and county that has regulatory
jurisdiction over the applicant's premises.
(2) If an applicant fails to conduct an economic feasibility study
that demonstrates to the satisfaction of the division that the
proposed gambling establishment will be economically viable, and that
the owners have sufficient resources to make the gambling
establishment successful. The division shall hold a public hearing
for the purposes of reviewing the feasibility study.
(3) If issuance of the license is sought in respect to a new
gambling establishment, or the expansion of an existing gambling
establishment, that is to be located or is located near an existing
school, an existing building used primarily as a place of worship, an
existing playground or other area of juvenile congregation, an
existing hospital, convalescence facility, or near another similarly
unsuitable area, as determined by regulation of the division, which
is located in a city, county, or city and county other than the city,
county, or city and county that has regulatory jurisdiction over the
applicant's gambling premises.
(b) For the purposes of this section, "expansion" means an
increase of 25 percent or more in the number of authorized gambling
tables in a gambling establishment, based on the number of gambling
tables for which a license was initially issued pursuant to this
chapter.
(c) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19852.1. A publicly traded racing association or a qualified
racing association shall be allowed to operate only one gaming club,
and the gaming club shall be located on the same premises as the
entity's racetrack.
19853. (a) Application for a state license or other division
action shall be made on forms furnished by the division.
(b) The application for a gambling license shall include all of
the following:
(1) The name of the proposed licensee.
(2) The name and location of the proposed gambling establishment.
(3) The gambling games proposed to be conducted.
(4) The names of all persons directly or indirectly interested in
the business and the nature of the interest.
(5) A description of the proposed gambling establishment and
operation.
(6) Any other information and details the division may require in
order to discharge its duty properly.
(c) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19853.5. The division shall furnish to the applicant supplemental
forms, which the applicant shall complete and file with the
division. These supplemental forms shall require, but shall not be
limited to requiring, complete information and details with respect
to the applicant's personal history, habits, character, criminal
record, business activities, financial affairs, and business
associates, covering at least a 10-year period immediately preceding
the date of filing of the application.
19854. (a) An applicant for licensing or for any approval or
consent required by this chapter, shall make full and true disclosure
of all information to the division as necessary to carry out the
policies of this state relating to licensing, registration, and
control of gambling.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19855. (a) An application for a license shall be accompanied by
the deposit of a sum of money that, in the judgment of the director,
will be adequate to pay the anticipated costs and charges incurred in
the investigation and processing of the application. The director
shall adopt a schedule of costs and charges of investigation for use
as guidelines in fixing the amount of any required deposit under this
section.
(b) During an investigation, the director may require an applicant
to deposit any additional sums as are required by the division to
pay final costs and charges of the investigation.
(c) Any money received from an applicant in excess of the costs
and charges incurred in the investigation or the processing of the
application shall be refunded pursuant to regulations adopted by the
division. At the conclusion of the investigation, the director shall
provide the applicant a written, itemized accounting of the costs
and charges so incurred.
19856. (a) Within a reasonable time after the filing of an
application and any supplemental information the division may
require, and the deposit of any fee required pursuant to Section
19855, the division shall commence its investigation of the applicant
and, for that purpose, may conduct any proceedings it deems
necessary. To the extent practicable, all applications shall be
acted upon within 180 calendar days of the date of submission of a
completed application. If an investigation has not been concluded
within 180 days after the date of submission of a completed
application, the division shall provide the applicant with a
conditional license. Issuance of a conditional license creates no
vested right to the issuance of a state gambling license, and the
applicant retains the burden of proving his or her qualifications for
that license.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19857. (a) A request for withdrawal of any application may be
made at any time prior to final action upon the application by the
director by the filing of a written request to withdraw with the
division. The division shall not grant the request unless the
applicant has established that withdrawal of the application would be
consistent with the public interest and the policies of this
chapter. If a request for withdrawal is denied, the division may go
forward with its investigation and may act upon the application as if
no request for withdrawal had been made. If a request for
withdrawal is granted with prejudice, the applicant thereafter shall
be ineligible to renew its application until the expiration of one
year from the date of the withdrawal. Unless the division otherwise
directs, no fee or other payment relating to any application is
refundable by reason of withdrawal of an application.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19858. (a) The division may either deny the application or grant
a license to an applicant who it determines to be qualified to hold
the license.
(b) When the division grants an application for a license or
approval, the division may limit or place restrictions thereon as it
may deem necessary in the public interest, consistent with the
policies described in this chapter.
(c) Prior to denying a license or issuing a license with
limitations, conditions, or restrictions, the director, or the
director's designee, shall meet with the applicant, or the applicant'
s duly authorized representative, and inform the applicant generally
of the basis for the denial, limitations, conditions, or
restrictions.
(d) If a license is denied, the director shall prepare and serve
on the applicant a written statement of reasons for the denial.
(e) Within 10 business days after the division mails a notice of
action on an application, the applicant may file a written objection
thereto with the board. Upon receipt of a timely objection, in
proper form, the board shall meet to consider the application. The
meeting shall commence within 30 days after the filing of the written
objection.
(f) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19858.5. (a) The board meeting described in Section 19858 shall
be conducted in accordance with regulations of the board and as
follows:
(1) Oral evidence shall be taken only upon oath or affirmation.
(2) Each party shall have all of the following rights:
(A) To call and examine witnesses.
(B) To introduce exhibits relevant to the issues of the case.
(C) To cross-examine opposing witnesses on any matters relevant to
the issues, even though the matter was not covered on direct
examination.
(D) To impeach any witness, regardless of which party first called
the witness to testify.
(E) To offer rebuttal evidence.
(3) If the applicant does not testify in his or her own behalf, he
or she may be called and examined as if under cross-examination.
(4) The meeting need not be conducted according to technical rules
relating to evidence and witnesses. Any relevant evidence may be
considered, and is sufficient in itself to support a finding, if it
is the sort of evidence on which responsible persons are accustomed
to rely in the conduct of serious affairs, regardless of the
existence of any common law or statutory rule that might make
improper the admission of that evidence over objection in a civil
action.
(b) Nothing in this section confers upon an applicant a right to
discovery of the division's investigative reports or to require
disclosure of any document or information the disclosure of which is
otherwise prohibited by any other provision of this chapter.
19858.7. (a) No member of the board may communicate ex parte,
directly or indirectly, with any applicant, or any agent,
representative, or person acting on behalf of an applicant, or any
agent or employee of the division, upon the merits of an application
for a license, permit, registration, or approval while the
application is pending disposition before the division or the board.
(b) No employee or agent of the division, applicant, or any agent,
representative, or person acting on behalf of an applicant, and no
person who has a direct or indirect interest in the outcome of a
proceeding to consider an application for a license, permit,
registration, or approval may communicate ex parte, directly or
indirectly, with any member of the board, upon the merits of the
application while the application is pending disposition before the
board.
(c) The receipt by a member of the board of an ex parte
communication prohibited by subdivision (b) may provide the basis for
disqualification of that member or the denial of the application.
The board shall adopt regulations to implement this subdivision.
(d) For the purposes of this section, "ex parte" means a
communication without notice and opportunity for all parties to
participate in the communication.
(e) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19859. No license may be assigned or transferred either in whole
or in part.
19860. (a) Subject to subdivision (b) of Section 19840.5, the
division or the board, as the case may be, shall issue and deliver to
the applicant a license entitling the applicant to engage in the
activity for which the license is issued, together with an
enumeration of any specific terms and conditions of the license if
both of the following conditions have been met:
(1) The division or the board is satisfied that the applicant is
eligible and qualified to receive the license.
(2) All license fees required by statute and by regulations of the
division have been paid.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19861. An owner's gambling license shall be posted at all times
in a conspicuous place in the area where gambling is conducted in the
establishment for which the license is issued until it is replaced
by a succeeding license.
19862. (a) Subject to the power of the division or the board to
deny, revoke, suspend, condition, or limit any license, as provided
in this chapter, a license shall be renewed annually by the division
from the date of issuance, upon proper application for renewal and
payment of state license fees as required by statute or regulation.
(b) An application for renewal of a gambling license shall be
filed by the owner licensee with the division no later than 120
calendar days prior to the expiration of the current license, and all
license fees shall be paid to the division on or
before the expiration of the current license.
The division shall act upon any application for renewal prior to the
date of expiration of the current license, and shall provide, by
regulation, for notifying licensees of impending license expiration
dates. Upon renewal of any owner license, the division shall issue
an appropriate renewal certificate or validating device or sticker.
(c) Unless the division determines otherwise, renewal of an owner'
s gambling license shall be deemed to effectuate the renewal of every
other gambling license endorsed thereon.
(d) In addition to the penalties provided by law, any owner
licensee who deals, operates, carries on, conducts, maintains, or
exposes for play any gambling game after the expiration date of the
gambling license is liable to the state for all license fees and
penalties that would have been due upon renewal.
(e) If an owner licensee fails to renew the gambling license as
provided in this chapter, the division may order the immediate
closure of the premises and a cessation of all gambling activity
therein until the license is renewed.
(f) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19862.5. The failure of an owner licensee to file an application
for renewal before the date specified in this chapter may be deemed a
surrender of the license. A license has not been renewed within the
meaning of this section until all required renewal fees have been
paid.
19863. (a) Neither an owner licensee, nor a California affiliate
of an owner licensee, shall enter into, without prior approval of the
division, any contract or agreement with a person who is denied a
license, or whose license is suspended or revoked by the division, or
with any business enterprise under the control of that person, after
the date of receipt of notice of the action by the division.
(b) An owner licensee or an affiliate of the owner licensee shall
not employ, without prior approval of the division, any person in any
capacity for which he or she is required to be licensed, if the
person has been denied a license, or if his or her license has been
suspended or revoked after the date of receipt of notice of the
action by the division. Neither an owner licensee, nor a California
affiliate of an owner licensee, without prior approval of the
division, shall enter into any contract or agreement with a person
whose application has been withdrawn with prejudice, or with any
business enterprise under the control of that person, for the period
of time during which the person is prohibited from filing a new
application for licensure.
(c) (1) If an employee who is required to be licensed pursuant to
this chapter fails to apply for a license within the time specified
by regulation, is denied a license, or has his or her license revoked
by the division, the employee shall be terminated in any capacity in
which he or she is required to be licensed and he or she shall not
be permitted to exercise a significant influence over the gambling
operation, or any part thereof, upon being notified of that action.
(2) If an employee who is required to be licensed pursuant to this
chapter has his or her license suspended, the employee shall be
suspended in any capacity in which he or she is required to be
licensed and shall not be permitted to exercise a significant
influence over the gambling operation, or any part thereof, during
the period of suspension, upon being notified of that action.
(3) If the owner licensee designates another employee to replace
the employee whose employment was terminated, the owner licensee
shall promptly notify the division and shall require the newly
designated employee to apply for a license.
(d) An owner licensee or an affiliate of the owner licensee shall
not pay to a person whose employment has been terminated pursuant to
subdivision (c) any remuneration for any service performed in any
capacity in which the person is required to be licensed, except for
amounts due for services rendered before the date of receipt of
notice of the action by the division. Neither an owner licensee, nor
an affiliate thereof, during the period of suspension, shall pay to
a person whose employment has been suspended pursuant to subdivision
(c), any remuneration for any service performed in any capacity in
which the person is required to be licensed, except for amounts due
for services rendered before the date of receipt of notice of the
action by the division.
(e) Except as provided in subdivision (c), a contract or agreement
for the provision of services or property to an owner licensee or an
affiliate thereof, or for the conduct of any activity at a gambling
establishment, which is to be performed by a person required by this
chapter or by the division to be licensed, shall be terminated upon a
suspension or revocation of the person's license.
(f) In any case in which a contract or agreement for the provision
of services or property to an owner licensee or an affiliate
thereof, or for the conduct of any activity at a gambling
establishment, is to be performed by a person required by this
chapter or by the division to be licensed, the contract shall be
deemed to include a provision for its termination without liability
on the part of the owner licensee or its duly registered holding
company upon a suspension or revocation of the person's license. In
any action brought by the division to terminate a contract pursuant
to subdivision (c) or (e), it shall not be a defense that the
agreement does not expressly include the provision described in this
subdivision, and the lack of express inclusion of the provision in
the agreement shall not be a basis for enforcement of the contract by
a party thereto.
(g) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19864. (a) With regard to a person who has had his or her
application for a license denied by the division, all of the
following shall apply:
(1) Except as provided in paragraph (3), the person shall not be
entitled to profit from his or her investment in any business entity
that has applied for or been granted a state license.
(2) The person shall not retain his or her interest in a business
entity described in paragraph (1) beyond that period prescribed by
the division.
(3) The person shall not accept more for his or her interest in a
business entity described in paragraph (1) than he or she paid for
it, or the market value on the date of the denial of the license or
registration, whichever is higher.
(4) Nothing in this section shall be construed as a restriction or
limitation on the powers of the division specified in this chapter.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
Article 5. Licensing of Corporations
19870. In addition to the requirements of Section 19841, in order
to be eligible to receive a gambling license as the owner of a
gambling enterprise, a corporation shall comply with all of the
following requirements:
(a) Maintain an office of the corporation in the gambling
establishment.
(b) Comply with all of the requirements of the laws of this state
pertaining to corporations.
(c) Maintain, in the corporation's principal office in California
or in the gambling establishment, a ledger that meets both of the
following conditions:
(1) At all times reflects the ownership of record of every class
of security issued by the corporation.
(2) Is available for inspection by the division at all reasonable
times without notice.
(d) Register as a corporation with the division and supply the
following supplemental information to the division:
(1) The organization, financial structure, and nature of the
business to be operated, including the names, personal and criminal
history, and fingerprints of all officers, directors, and key
employees, and the names, addresses, and number of shares held by all
stockholders of record.
(2) The rights and privileges acquired by the holders of different
classes of authorized securities, including debentures.
(3) The terms on which securities are to be offered.
(4) The terms and conditions on all outstanding loans, mortgages,
trust deeds, pledges, or any other indebtedness or security device.
(5) The extent of the equity security holdings in the corporation
of all officers, directors, and underwriters, and their remuneration
as compensation for services, in the form of salary, wages, fees, or
otherwise.
(6) The amount of remuneration to persons other than directors and
officers in excess of fifty thousand dollars ($50,000) per annum.
(7) Bonus and profit-sharing arrangements.
(8) Management and service contracts.
(9) Options existing, or to be created, in respect of their
securities or other interests.
(10) Financial statements for at least three fiscal years
preceding the year of registration, or, if the corporation has not
been in existence for a period of three years, financial statements
from the date of its formation. All financial statements shall be
prepared in accordance with generally accepted accounting principles
and audited by a licensee of the State Board of Accountancy.
(11) Any further financial data that the division, with the
approval of the board, may deem necessary or appropriate for the
protection of the state.
(12) An annual profit-and-loss statement and an annual balance
sheet, and a copy of its annual federal income tax return, within 30
calendar days after that return is filed with the Internal Revenue
Service.
19871. (a) No corporation is eligible to receive a license to own
a gambling enterprise unless the conduct of controlled gambling is
among the purposes stated in its articles of incorporation and the
articles of incorporation have been submitted to and approved by the
division.
(b) Beginning July 1, 1998, the Secretary of State shall not
accept for filing any articles of incorporation of any corporation
that include as a stated purpose the conduct of controlled gambling,
or any amendment thereto, or any amendment that adds this purpose to
articles of incorporation already filed, unless the articles have, or
amendment has, been approved by the division.
(c) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19872. (a) If at any time the division denies a license to an
individual owner of any security issued by a corporation that applies
for or holds an owner license, the owner of the security shall
immediately offer the security to the issuing corporation for
purchase. The corporation shall purchase the security so offered,
for cash in an amount not greater than fair market value, within 30
calendar days after the date of the offer.
(b) Beginning upon the date when the division serves notice of the
denial upon the corporation, it is unlawful for the denied security
owner to do any of the following:
(1) Receive any dividend or interest upon any security described
in subdivision (a).
(2) Exercise, directly or through any trustee or nominee, any
voting right conferred by any security described in subdivision (a).
(3) Receive any remuneration in any form from the corporation for
services rendered or for any other purpose.
(c) Every security issued by a corporate owner licensee shall bear
a statement, on both sides of the certificate evidencing the
security, of the restrictions imposed by this section.
(d) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19873. (a) To the extent required by this chapter, officers and
directors, shareholders, lenders, holders of evidence of
indebtedness, underwriters, agents, or employees of a corporate owner
licensee shall be licensed individually. The corporation shall
require these persons to apply for a gambling license, and shall
notify the division of every change of corporate officers, directors,
or key employees within 10 business days after the change. An
officer, director, or key employee who is required to apply for a
license shall apply for the license within 30 calendar days after he
or she becomes an officer, director, or key employee.
(b) The corporation shall immediately remove any officer or
director required to apply for a license from any office or
directorship if any of the following apply to that officer or
director:
(1) He or she fails to apply for the license within 30 calendar
days after becoming an officer or director.
(2) He or she is denied a license.
(3) His or her license is revoked.
(c) If the license of any officer or director is suspended, the
corporation, immediately and for the duration of the suspension,
shall suspend that officer or director.
(d) If any shareholder who is required to apply for a gambling
license fails to apply for the license within the time required, the
shareholder shall be deemed to have been denied a license for
purposes of subdivision (b) of Section 19872.
(e) If any person, other than an officer, director, or
shareholder, who is required to apply for a gambling license fails to
do so, the failure may be deemed to be a failure of the corporate
owner licensee to require the application.
Article 6. Licensing of Limited Partnerships
19880. In addition to the requirements of Section 19841, in order
to be eligible to receive a gambling license to own a gambling
enterprise, a limited partnership shall comply with all of the
following requirements:
(a) Be formed under the laws of this state.
(b) Maintain an office of the limited partnership in the gambling
establishment.
(c) Comply with all of the requirements of the laws of this state
pertaining to limited partnerships.
(d) Maintain a ledger in the principal office of the limited
partnership in California that shall meet both of the following
conditions:
(1) At all times reflects the ownership of all interests in the
limited partnership.
(2) Be available for inspection by the division at all reasonable
times without notice.
(e) Register with the division and supply the following
supplemental information to the division:
(1) The organization, financial structure, and nature of the
business to be operated, including the names, personal history, and
fingerprints of all general partners and key employees, and the name,
address, and interest of each limited partner.
(2) The rights, privileges, and relative priorities of limited
partners as to the return of contributions to capital, and the right
to receive income.
(3) The terms on which limited partnership interests are to be
offered.
(4) The terms and conditions on all outstanding loans, mortgages,
trust deeds, pledges, or any other indebtedness or security device.
(5) The extent of the holding in the limited partnership of all
underwriters, and their remuneration as compensation for services, in
the form of salary, wages, fees, or otherwise.
(6) The remuneration to persons other than general partners in
excess of fifty thousand dollars ($50,000) per annum.
(7) Bonus and profit-sharing arrangements.
(8) Management and service contracts.
(9) Options existing or to be created.
(10) Financial statements for at least three fiscal years
preceding the year of registration, or, if the limited partnership
has not been in existence for a period of three years, financial
statements from the date of its formation. All financial statements
shall be prepared in accordance with generally accepted accounting
principles and audited by a licensee of the State Board of
Accountancy in accordance with generally accepted auditing standards.
(11) Any further financial data that the division reasonably deems
necessary or appropriate for the protection of the state.
(12) An annual profit and loss statement and an annual balance
sheet, and a copy of its annual federal income tax return, within 30
calendar days after the return is filed with the Internal Revenue
Service.
19881. No limited partnership is eligible to receive a license to
own a gambling enterprise unless the conduct of gambling is among
the purposes stated in the certificate of limited partnership.
19882. (a) The purported sale, assignment, transfer, pledge, or
other disposition of any interest in a limited partnership that holds
a gambling license, or the grant of an option to purchase the
interest, is void unless approved in advance by the division.
(b) If at any time the division denies a license to an individual
owner of any interest described in subdivision (a), the division
shall immediately notify the partnership of that fact. The limited
partnership, within 30 calendar days from the date it receives the
notice from the division, shall return to the denied owner of the
interest, in cash, the amount of his or her capital account as
reflected on the books of the partnership.
(c) Beginning upon the date when the division serves a notice of
denial upon the limited partnership, it is unlawful for the denied
owner of the interest to do any of the following:
(1) Receive any share of the revenue or interest upon the limited
partnership interest.
(2) Exercise, directly or through any trustee or nominee, any
voting right conferred by that interest.
(3) Receive any remuneration in any form from the limited
partnership, for services rendered or for any other purpose.
(d) Every certificate of limited partnership of any limited
partnership holding a gambling license shall contain a statement of
the restrictions imposed by this section.
(e) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19883. (a) To the extent required by this chapter, general
partners, limited partners, lenders, holders of evidence of
indebtedness, underwriters, agents, or employees of a limited
partnership that holds or applies for a license to own a gambling
enterprise shall be licensed individually. The limited partnership
shall require these persons to apply for and obtain a gambling
license. A person who is required to be licensed by this section as
a general or limited partner shall not hold that position until he or
she secures the required approval of the division. A person who is
required to be licensed pursuant to a decision of the division shall
apply for a license within 30 days after the division requests him or
her to do so.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
Article 7. Restrictions on Certain Transactions
19900. (a) Except as may be provided by regulation of the
division, the following security interests shall not be enforced
without the prior approval of the division and compliance with
regulations adopted pursuant to subdivision (b):
(1) In a security issued by a corporation that is a holder of a
gambling license in this state, other than the security of a publicly
traded racing association where a creditor acquires control of the
security by forfeiture.
(2) In a security issued by a holding company that is not a
publicly traded corporation.
(3) In a security issued by a partnership that is a holder of a
gambling license in this state.
(b) The division shall adopt regulations establishing the
procedure for the enforcement of a security interest. Any remedy
provided by the regulations for the enforcement of the security
interest is in addition to any other remedy provided by law.
19901. It is unlawful for any person to sell, purchase, lease,
hypothecate, borrow or loan money, or create a voting trust agreement
or any other agreement of any sort to, or with, any licensee in
connection with any controlled gambling operation licensed under this
chapter or with respect to any portion of the gambling operation,
except in accordance with the regulations of the division.
19902. When any person contracts to sell or lease any property or
interest in property, real or personal, under circumstances that
require the approval or licensing of the purchaser or lessee by the
division pursuant to subdivision (a) of Section 19842, the contract
shall not specify a closing date for the transaction that is earlier
than the expiration of 90 calendar days after the submission of the
completed application for approval for licensing. Any provision of a
contract that specifies an earlier closing date is void for all
purposes, but the invalidity does not affect the validity of any
other provision of the contract.
19903. When any person contracts to sell or lease any property or
interest in property, real or personal, under circumstances that
require the approval or licensing of the purchaser or lessee by the
division pursuant to subdivision (a) of Section 19842, the contract
shall contain a provision satisfactory to the division regarding
responsibility for the payment of any fees due pursuant to any
subsequent deficiency determinations made under this chapter that
shall encompass any period of time before the closing date of the
transaction.
19904. The purported sale, assignment, transfer, pledge, or other
disposition of any security issued by a corporation that holds a
gambling license, or the grant of an option to purchase that
security, is void unless approved in advance by the division.
19905. Every owner licensee that is involved in a transaction for
the extension or redemption of credit by the licensee, or for the
payment, receipt, or transfer of coin, currency, or other monetary
instruments, as specified by the division, in an amount,
denomination, or amount and denomination, or under circumstances
prescribed by regulations, and any other participant in the
transaction, as specified by the division, shall, if required by
regulation, make and retain a record of, or file with the division a
report on, the transaction, at the time and in the manner prescribed
by regulations.
19906. This article shall remain in effect only until the
occurrence of one of the events specified in Section 66 of the act
that added this chapter, and as of that date is repealed, unless a
later enacted statute, which is enacted before the occurrence of one
of the events specified in Section 66 of the act that added this
chapter, deletes or extends that date.
Article 8. Work Permits
19910. The Legislature finds that to protect and promote the
health, safety, good order, and general welfare of the inhabitants of
this state, and to carry out the policy declared by this chapter, it
is necessary that the division ascertain and keep itself informed of
the identity, prior activities, and present location of all gambling
enterprise employees and independent agents in the State of
California, and when appropriate to do so, approve persons for
employment in gambling establishments as provided in this article.
19910.4. No person under the age of 21 years shall be eligible
for a work permit and no permit shall be issued to a person under the
age of 21 years.
19910.5. (a) (1) A person shall not be employed as a gambling
enterprise employee, or serve as an independent agent, except as
provided in paragraph (2), unless he or she is the holder of one of
the following:
(A) A valid work permit issued in accordance with the applicable
ordinance or regulations of the city, county, or city and county in
which his or her duties are performed.
(B) A work permit issued by the division.
(2) An independent agent is not required to hold a work permit if
he or she is not a resident of this state and has registered with the
division in accordance with regulations.
(b) A work permit shall not be issued by any city, county, or city
and county to any person who would be disqualified from holding a
state gambling license for the reasons stated in paragraphs (3) to
(6), inclusive, of subdivision (a) of Section 19850.
(c) The division may object to the issuance of a work permit by a
city, county, or city and county for any cause deemed reasonable by
the division, and if the division objects to issuance of a work
permit, the work permit shall be denied.
(1) The division shall adopt regulations specifying particular
grounds for objection to issuance of, or refusal to issue, a work
permit.
(2) The ordinance of any city, county, or city and county relating
to issuance of work permits shall permit the division to object to
the issuance of any permit.
(3) Any person whose application for a work permit has been denied
because of an objection by the division may apply to the division
for an evidentiary hearing in accordance with regulations.
(d) Application for a work permit for use in any jurisdiction
where a locally issued work permit is not required by the licensing
authority of a city, county,
or city and county shall be made to the division, and may be granted
or denied for any cause deemed reasonable by the division. If the
division denies the application, it shall include in its notice of
denial a statement of facts upon which it relied in denying the
application.
(e) An order of the division denying an application for a work
permit, including an order declining to issue a work permit following
review pursuant to paragraph (3) of subdivision (c), is subject to
the procedures described in Sections 19858, 19858.5, and 19858.7.
(f) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19911. (a) The division may issue an order summarily suspending a
person's work permit, whether issued by a city, county, or city and
county, or by the division, upon a finding that the suspension is
necessary for the immediate preservation of the public peace, health,
safety, or general welfare. The order is effective when served upon
the holder of the permit.
(b) The order of summary suspension shall state facts upon which
the finding of necessity for the suspension is based. For the
purposes of this section, the order of summary suspension shall be
deemed an accusation.
(c) An order of summary suspension shall be signed by the Attorney
General or by the Chief Deputy Attorney General.
(d) The person whose work permit is summarily suspended has a
right to a hearing to commence not more than 30 calendar days from
the date of service of the suspension.
(e) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19912. (a) The board may revoke a work permit or, if issued by
the licensing authority of a city, county, or city and county, notify
the authority to revoke it, and the licensing authority shall revoke
it, if the board finds, after a hearing, that a gambling enterprise
employee or independent agent has failed to disclose, misstated, or
otherwise misled the division with respect to any fact contained in
any application for a work permit, or if the board finds that the
employee or independent agent, subsequent to being issued a work
permit, has done any of the following:
(1) Committed, attempted, or conspired to do any acts prohibited
by this chapter.
(2) Engaged in any dishonest, fraudulent, or unfairly deceptive
activities in connection with controlled gambling, or knowingly
possessed or permitted to remain in or upon any premises any cards,
dice, mechanical devices, or any other cheating device.
(3) Concealed or refused to disclose any material fact in any
investigation by the division.
(4) Committed, attempted, or conspired to commit, any embezzlement
or larceny against a gambling licensee or upon the premises of a
gambling establishment.
(5) Been convicted in any jurisdiction of any offense involving or
relating to gambling.
(6) Accepted employment without prior division approval in a
position for which he or she could be required to be licensed under
this chapter after having been denied a license or after failing to
apply for licensing when requested to do so by the division.
(7) Been refused the issuance of any license, permit, or approval
to engage in or be involved with gambling or parimutuel wagering in
any jurisdiction, or had the license, permit, or approval revoked or
suspended.
(8) Been prohibited under color of governmental authority from
being present upon the premises of any licensed gambling
establishment or any establishment where parimutuel wagering is
conducted, for any reason relating to improper gambling activities or
any illegal act.
(9) Been convicted of any felony.
(b) The board shall revoke a work permit if it finds, after
hearing, that the holder thereof would be disqualified from holding a
state gambling license for the reasons specified in paragraph (5) or
(6) of subdivision (a) of Section 19850.
(c) Nothing in this section shall be construed to limit any powers
of the division with respect to licensing.
(d) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19913. (a) The fee for an initial work permit issued by the
division shall be not less than twenty-five dollars ($25) or more
than two hundred fifty dollars ($250). The fee for renewal of a work
permit shall be no more than twenty-five dollars ($25).
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
Article 9. Conditions of Operation
19915. (a) It is the policy of the State of California to require
that all establishments wherein controlled gambling is conducted in
this state be operated in a manner suitable to protect the public
health, safety, and general welfare of the residents of the state.
The responsibility for the employment and maintenance of suitable
methods of operation rests with the owner licensee, and willful or
persistent use or toleration of methods of operation deemed
unsuitable by the division or by local government shall constitute
grounds for license revocation or other disciplinary action.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19915.5. No person under the age of 21 years shall be permitted
to enter upon the premises of a licensed gambling establishment, or
any part thereof, except the following:
(a) An area, physically separated from any gambling area, for the
exclusive purpose of dining. For purposes of this subdivision, any
place wherein food or beverages are dispensed primarily by vending
machines shall not constitute a place for dining.
(b) Restrooms.
(c) A supervised room, as defined by regulation, that is
physically separated from any gambling area and used primarily for
the purpose of entertainment or recreation.
Any area of a gambling establishment to which a person under the
age of 21 years may have access under this subdivision shall have an
entrance that shall not require the entrants to enter upon or pass
through the gambling floor. All persons under the age of 21 years
shall be restricted to the entrance specified in this subdivision.
(d) Effective January 1, 1999, no license shall be renewed with
respect to a gambling establishment that is operated as of the
effective date of this chapter unless the establishment has complied
with this section.
19916. No owner licensee shall operate a gambling enterprise in
violation of any provision of this chapter or any regulation adopted
pursuant to this chapter.
19917. No owner licensee shall operate a gambling enterprise in
violation of any governing local ordinance.
19918. (a) Each owner licensee shall maintain security controls
over the gambling premises and all operations therein related to
gambling, and those security controls are subject to the approval of
the division.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
Article 9.5. Disciplinary Actions
19920. (a) The division shall make appropriate investigations as
follows:
(1) Determine whether there has been any violation of this chapter
or any regulations adopted thereunder.
(2) Determine any facts, conditions, practices, or matters that it
may deem necessary or proper to aid in the enforcement of this
chapter or any regulation adopted thereunder.
(3) Aid in adopting regulations.
(4) Secure information as a basis for recommending legislation
relating to this chapter.
(b) If, after any investigation, the division is satisfied that a
license, permit, finding of suitability, or approval should be
suspended or revoked, it shall file an accusation with the board in
accordance with Chapter 5 (commencing with Section 11500) of Part 1
of Division 3 of Title 2 of the Government Code.
(c) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19921. (a) The division may issue any emergency orders against an
owner licensee or any person involved in a transaction requiring
prior approval that the division deems reasonably necessary for the
immediate preservation of the public peace, health, safety, or
general welfare.
(b) The emergency order shall set forth the grounds upon which it
is based, including a statement of facts constituting the alleged
emergency necessitating the action.
(c) The emergency order is effective immediately upon issuance and
service upon the owner licensee or any agent of the licensee
registered with the division for receipt of service, or, in cases
involving prior approval, upon issuance and service upon the person
or entity involved, or upon an agent of that person or entity
authorized to accept service of process in this state. The emergency
order may suspend, limit, condition, or take other action in
relation to the license of one or more persons in an operation
without affecting other individual licensees, registrants, or the
licensed gambling establishment. The emergency order shall remain in
effect until further order of the division or final disposition of
any proceeding conducted pursuant to subdivision (d).
(d) Within two calendar days after issuance of an emergency order,
the division shall file an accusation with the board against the
person or entity involved. Thereafter, the person or entity against
whom the emergency order has been issued and served is entitled to a
hearing that, if so requested, shall commence within 10 business days
of the date of the request if a gambling operation is closed by the
order, and in all other cases, within 30 calendar days of the date of
the request. On application of the division, and for good cause
shown, a court may extend the time within which a hearing is required
to be commenced, upon those terms and conditions that the court
deems equitable.
(e) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19922. (a) Any person aggrieved by a final decision or order of
the board that limits, conditions, suspends, or revokes any
previously granted license or approval, made after hearing by the
board, may petition the Superior Court for the County of Sacramento
for judicial review pursuant to Section 1094.5 of the Code of Civil
Procedure and Section 11523 of the Government Code. Notwithstanding
any other provision of law, the standard set forth in paragraph (1)
of subdivision (h) of Section 1094.5 of the Code of Civil Procedure
shall apply for obtaining a stay of the operation of a board order.
In every case where it is claimed that the findings are not supported
by the evidence, abuse of discretion is established if the court
determines that the findings are not supported by substantial
evidence in light of the whole record.
(b) The court may summarily deny the petition, or the court may
issue an alternative writ directing the board to certify the whole
record of the division in the case to the court within a time
specified. No new or additional evidence shall be introduced in the
court, but, if an alternative writ issues, the cause shall be heard
on the whole record of the division as certified by the board.
(c) In determining the cause following issuance of an alternative
writ, the court shall enter judgment affirming, modifying, or
reversing the order of the board, or the court may remand the case
for further proceedings before, or reconsideration by, the board.
(d) This section provides the exclusive means to review
adjudicatory decisions of the board.
Article 10. Penalties
19930. Any person included on the list of persons to be excluded
or ejected from a gambling establishment pursuant to this chapter is
guilty of a misdemeanor if he or she thereafter knowingly enters the
premises of a licensed gambling establishment.
19932. (a) A person under the age of 21 years shall not do any of
the following:
(1) Play, be allowed to play, place wagers at, or collect winnings
from, whether personally or through an agent, any gambling game.
(2) Loiter, or be permitted to loiter, in or about any room
wherein any gambling game is operated or conducted.
(3) Be employed as an employee in a licensed gambling
establishment except in a parking lot, coffee shop, restaurant,
business office, or other similar room, as determined by regulations,
wherein no gambling activity or activity directly associated with
gambling takes place.
(4) Present or offer to any licensee, or to an agent of a
licensee, any written, printed, or photostatic evidence of age and
identity that is false, fraudulent, or not actually his or her own
for the purpose of doing any of the things described in paragraphs
(1) to (3), inclusive.
(b) Any licensee or employee in a gambling establishment who
violates or permits the violation of this section, and any person
under 21 years of age who violates this section, is guilty of a
misdemeanor.
(c) Proof that a licensee, or agent or employee of a licensee,
demanded, was shown, and acted in reliance upon bona fide evidence of
majority and identity shall be a defense to any criminal prosecution
under this section or to any proceeding for the suspension or
revocation of any license or work permit based thereon. For the
purposes of this section, "bona fide evidence of majority and
identity" means a document issued by a federal, state, county, or
municipal government, or subdivision or agency thereof, including,
but not limited to, a motor vehicle operator's license or an
identification card issued to a member of the armed forces, that
contains the name, date of birth, description, and picture of the
person.
19933. (a) Any person who willfully fails to report, pay, or
truthfully account for and pay over any license fee imposed by this
chapter, or willfully attempts in any manner to evade or defeat the
license fee or payment thereof, shall be punished by imprisonment in
a county jail, or by a fine of not more than five thousand dollars
($5,000), or by both that imprisonment and fine.
(b) Any person who willfully violates any of the provisions of
this chapter for which a penalty is not expressly provided, is guilty
of a misdemeanor.
19933.5. (a) Except as specified in subdivision (c), this section
applies to any person or business that is engaged in controlled
gambling, whether or not licensed to do so.
(b) Any person or business described in subdivision (a), with
actual knowledge of the requirements of regulations adopted by the
division pursuant to subdivision (d) of Section 19834, that knowingly
and willfully fails to comply with the requirements of those
regulations shall be liable for a monetary penalty. The board may
impose a monetary penalty for each violation. However, in the first
proceeding that is initiated pursuant to this subdivision, the
penalties for all violations shall not exceed a total sum of ten
thousand dollars ($10,000). If a penalty was imposed in a prior
proceeding before the board, the penalties for all violations shall
not exceed a total sum of twenty-five thousand dollars ($25,000). If
a penalty was imposed in two or more prior proceedings before the
board, the penalties for all violations shall not exceed a total sum
of one hundred thousand dollars ($100,000).
(c) This section does not apply to any case where the person is
criminally prosecuted in federal or state court for conduct related
to a violation of Section 14162 of the Penal Code.
(d) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19934. Any person who willfully resists, prevents, impedes, or
interferes with the division or the board or any of their agents or
employees in the performance of duties pursuant to this chapter is
guilty of a misdemeanor, punishable by imprisonment in a county jail
for not more than six months, or by a fine not exceeding one thousand
dollars ($1,000), or by both that imprisonment and fine.
Article 11. Revenues
19940. (a) All fines and penalties collected pursuant to this
chapter shall be deposited in a special account in the General Fund,
and, upon appropriation, may be expended by the Department of Justice
to offset costs incurred pursuant to this chapter.
(b) Except as otherwise provided in subdivision (a), all fees and
revenue collected pursuant to this chapter shall be deposited in the
Gambling Control Fund, which is hereby created in the State Treasury.
Notwithstanding Section 13340 of the Government Code, five million
four hundred thousand dollars ($5,400,000) of the funds deposited in
the Gambling Control Fund shall be available, upon appropriation by
the Legislature, to the Department of Justice each fiscal year,
commencing with the 1998-99 fiscal year, for expenditure by the
division and board exclusively for the support of the division and
board in carrying out their duties and responsibilities under this
chapter.
19941. (a) Every application for a license or approval shall be
accompanied by a nonrefundable fee of five hundred dollars ($500).
(b) All fees for issuance or renewal of a state gambling license
or key employee license shall be assessed against the gambling
license issued to the owner of the gambling enterprise. Except as
provided in subdivision (c), the annual fee for the issuance and
renewal of that gambling license shall be determined by the division
pursuant to the following schedule:
(1) For a license authorizing one to five tables, inclusive, at
which games are played, two hundred fifty dollars ($250) for each
table.
(2) For a license authorizing six to eight tables, inclusive, at
which games are played, four hundred fifty dollars ($450) for each
table.
(3) For a license authorizing 9 to 14 tables, inclusive, at which
games are played, one thousand fifty dollars ($1,050) for each table.
(4) For a license authorizing 15 to 25 tables, inclusive, at which
games are played, two thousand one hundred fifty dollars ($2,150)
for each table.
(5) For a license authorizing 26 to 70 tables, inclusive, at which
games are played, three thousand two hundred dollars ($3,200) for
each table.
(6) For a license authorizing 71 or more tables at which games are
played, three thousand seven hundred dollars ($3,700) for each
table.
(c) Without regard to the number of tables at which games may be
played pursuant to a gambling license, if, at the time of any license
renewal, it is determined that the gross revenues of an owner
licensee during the licensee's previous fiscal year fell within the
following ranges, the annual fee for renewal of the license shall be
as follows:
(1) For a gross revenue of two hundred thousand dollars ($200,000)
to four hundred ninety-nine thousand nine hundred ninety-nine
dollars ($499,999), inclusive, the amount specified by the division
pursuant to paragraph (2) of subdivision (b).
(2) For a gross revenue of five hundred thousand dollars
($500,000) to one million nine hundred ninety-nine thousand nine
hundred ninety-nine dollars ($1,999,999), inclusive, the amount
specified by the division pursuant to paragraph (3) of subdivision
(b).
(3) For a gross revenue of two million dollars ($2,000,000) to
nine million nine hundred ninety-nine thousand nine hundred
ninety-nine dollars ($9,999,999), inclusive, the amount specified by
the division pursuant to paragraph (4) of subdivision (b).
(4) For a gross revenue of ten million dollars ($10,000,000) or
more, the amount specified by the division pursuant to paragraph (5)
of subdivision (b).
(d) Notwithstanding subdivision (c), the fee for renewal of a
gambling license shall not be less than the amount specified in
subdivision (b).
(e) (1) No later than July 1, 2000, the Attorney General shall
review the fee schedule set forth in this section and make a
recommendation to the Legislature concerning the reduction or
increase in the fee amounts, if any.
(2) It is the intent of the Legislature that the revenue derived
from the total of all issuance and renewal fees collected during each
fiscal year not exceed five million four hundred thousand dollars
($5,400,000). If, at the end of any fiscal year prior to July 1,
2000, the division determines that the total of all issuance and
renewal fees collected during that fiscal year exceeded the amount
appropriated by the Legislature pursuant to subdivision (b) of
Section 19940, the excess shall be refunded to all owner licensees
within 180 calendar days after the close of the fiscal year, by way
of a pro rata distribution.
(f) The division may provide for payment of the annual gambling
license fee on an annual or installment basis.
(g) For the purposes of this section, each table at which a game
is played constitutes a single game table.
19942. (a) The division, by regulation, shall establish fees for
special licenses authorizing irregular operation of tables in excess
of the total number of tables otherwise authorized to a licensed
gambling establishment, for tournaments and other special events.
(b) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in paragraphs (1) to (4), inclusive, of Section 66 of the
act that added this chapter, deletes or extends that date.
19944. Nothing contained in this chapter shall be deemed to
restrict or limit the power of any city, county, or city and county
to fix, impose, and collect a license tax.
Article 12. Local Governments
19950. This chapter shall not prohibit the enactment, amendment,
or enforcement of any ordinance by any city, county, or city and
county relating to licensed gambling establishments that is not
inconsistent with this chapter. On and after the effective date of
this chapter, no city, county, or city and county shall issue a
gambling license with respect to any gambling establishment unless
one of the following is true:
(a) The gambling establishment is located in a city, county, or
city and county wherein, after January 1, 1984, an ordinance was
adopted by the electors of the city, county, or city and county, in
an election conducted pursuant to former Section 19819 of the
Business and Professions Code, as that section read immediately
before its repeal by the act that enacted this chapter.
(b) The gambling establishment is located in a city, county, or
city and county wherein, prior to January 1, 1984, there was in
effect an ordinance that expressly authorized the operation of one or
more cardrooms.
(c) After the effective date of this chapter, a majority of the
electors voting thereon affirmatively approve a measure permitting
controlled gambling within that city, county, or city and county.
(1) The measure to permit controlled gambling shall appear on the
ballot in substantially the following form:
"Shall licensed gambling establishments in which any controlled games
permitted by law, such as draw poker, low-ball poker, panguine
(pan), seven-card stud, or other lawful card games or tile games, are
played, be allowed in _____? Yes ____ No ____."
(2) In addition, the initial implementing ordinances shall be
drafted and appear in full on the sample ballot and shall set forth
at least all of the following:
(A) The hours of operation.
(B) The games to be played.
(C) The wagering limits.
(D) The maximum number of gambling establishments permitted by the
ordinance.
(E) The maximum number of tables permitted in each gambling
establishment.
19950.1. (a) On or after the effective date of this chapter, any
amendment to any ordinance that would result in an expansion of
gambling in the city, county, or city and county, shall not be valid
unless the amendment is submitted for approval to the voters of the
city, county, or city and county, and is approved by a majority of
the electors voting thereon. An ordinance may be amended without the
approval of the electors one time on or after the effective date of
this chapter to expand gambling by a change that results in an
increase of less than 25 percent with respect to any of the matters
set forth in paragraphs (1), (2), (3), (5), and (6) of subdivision
(b). Thereafter,
any additional expansion shall be approved by a majority of the
electors voting thereon. This subdivision does not apply to a
licensed gambling establishment with five or fewer tables.
(b) For the purposes of this section, "expansion of gambling"
means, when compared to that authorized on January 1, 1996, or under
an ordinance adopted pursuant to subdivision (a) of Section 19851,
whichever is the lesser number, a change that results in any of the
following:
(1) An increase of 25 percent or more in the number of gambling
tables in the city, county, or city and county.
(2) An increase of 25 percent or more in the number of licensed
card rooms in the city, county, or city and county.
(3) An increase of 25 percent or more in the number of gambling
tables that may be operated in a gambling establishment in the city,
county, or city and county.
(4) The authorization of any additional form of gambling, other
than card games, that may be legally played in this state, to be
played at a gambling establishment in the city, county, or city and
county.
(5) An increase of 25 percent or more in the hours of operation of
a gambling establishment in the city, county, or city and county.
(6) An increase of 25 percent or more in the maximum amount
permitted to be wagered in a game.
(c) The measure to expand gambling shall appear on the ballot in
substantially the following form:
"Shall gambling be expanded in ____ beyond that operated or
authorized on January 1, 1996, by ____ (describe expansion)? Yes
____ No ____."
19950.2. (a) On and after the effective date of this chapter,
neither the governing body nor the electors of a county, city, or
city and county that has not authorized legal gaming within its
boundaries prior to January 1, 1996, shall authorize legal gaming.
(b) No ordinance in effect on January 1, 1996, that authorizes
legal gaming within a city, county, or city and county may be amended
to expand gaming in that jurisdiction beyond that permitted on
January 1, 1996.
(c) This section shall remain in effect only until January 1,
2001, and as of that date is repealed.
19951. No city, county, or city and county may grant, or permit
to continue in effect, a license to deal, operate, carry on, conduct,
maintain, or expose for play any controlled game to any applicant or
holder of a local license unless the applicant or local licensee is
an owner licensee as defined in this chapter. However, the issuance
of a state gambling license to a person imposes no requirements upon
the city, county, or city and county to issue a license to the
person.
Article 13. Miscellaneous Provisions
19956. If any clause, sentence, paragraph, or part of this
chapter, for any reason, is adjudged by a court of competent
jurisdiction to be invalid, that judgment shall not affect, impair,
or invalidate the remainder of this chapter and the application
thereof to other persons or circumstances, but shall be confined to
the operation of the clause, sentence, paragraph, or part thereof
directly involved in the controversy in which the judgment was
rendered and to the person or circumstances involved.
19957. This act is an exercise of the police power of the state
for the protection of the health, safety, and welfare of the people
of the State of California, and shall be liberally construed to
effectuate those purposes.
19958. For the purposes of Section 3482 of the Civil Code, the
issuance of a state gambling license shall not be construed to
authorize any conduct or activity other than the conduct of
controlled gambling.
Article 14. Additional Restrictions Related to Fair Elections
and Corruption of Regulators
19959. (a) The Legislature finds and declares that there is a
compelling governmental interest in ensuring that elections conducted
pursuant to Section 19950 are conducted fairly and that electors in
those elections are presented with fair and balanced arguments in
support of and in opposition to the existence of gambling
establishments. Large contributions by gambling operators or
prospective gambling operators who will be financially interested in
the outcome of the election often unfairly distort the context in
which those elections take place.
(b) In California, in other states, and in other countries, there
is ample historical evidence of the potential for revenues derived
from gambling to be used to corrupt political officials in the
regulation or prosecution of crimes related to gambling activities,
embezzlement, and money laundering.
(c) This article is an exercise of the police power of the state
for the protection of the health, safety, and welfare of the people
of this state.
19959.5. (a) A member of the board, the executive secretary of
the board, the director of the division, and any employee designated
by regulation of the division for purposes of this section, shall
not, for a period of three years after leaving office or terminating
employment, for compensation, act as agent or attorney for, or
otherwise represent, any other person by making any formal or
informal appearance, or by making any oral or written communication,
before the board or the division, or any officer or employee thereof,
if the appearance or communication is for the purpose of influencing
administrative action, or influencing any action or proceeding
involving the issuance, amendment, awarding, or revocation of a
permit, license, or approval.
(b) A member of the board shall not solicit or accept campaign
contributions from any person, including any applicant or licensee.
(c) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19960.2. (a) The division shall, by regulation, provide for the
denial, suspension, or revocation of an application or license for
the knowing and willful violation of any law or ordinance committed
after January 1, 1998, and within three years prior to the submission
of the license or renewal application, or any time thereafter, with
respect to campaign finance disclosure or contribution limitations
applicable to an election that is conducted pursuant to Section
19950.
(1) The remedies specified herein are in addition to any other
remedy or penalty provided by law.
(2) Any final determination by the Fair Political Practices
Commission that the applicant did not violate any provision of state
law within its jurisdiction shall be binding on the division.
(3) Any final determination by a city or county governmental body
having ultimate jurisdiction over the matter that the applicant did
not violate an ordinance with respect to campaign finance disclosure
or contribution limitations applicable to an election conducted
pursuant to Section 19950 shall be binding on the division.
(b) Every applicant for a gambling license, or any renewal
thereof, shall file with the division, at the time the license
application or renewal is filed, the following information:
(1) Any statement or other document required to be filed with the
Fair Political Practices Commission relative to an election that is
conducted pursuant to Section 19950, or former Section 19819, as that
section read immediately prior to its repeal by the act that enacted
this chapter, within three years of the date on which the
application is submitted.
(2) Any statement or other document required to be filed with any
local jurisdiction respecting campaign finance disclosure or
contribution limitations applicable to an election that is conducted
pursuant to Section 19950, or former Section 19819, as that section
read immediately prior to its repeal by the act that enacted this
chapter, within three years of the date on which the application is
submitted.
(3) A report of any contribution of money or thing of value, in
excess of one hundred dollars ($100), made to any committee, as
defined by Section 82013 of the Government Code, associated with any
election that is conducted pursuant to Section 19950, or former
Section 19819, as that section read immediately prior to its repeal
by the act that enacted this chapter, within three years of the date
on which the application is submitted.
(4) A report of any other significant involvement by the applicant
or licensee in an election that is conducted pursuant to Section
19950, or former Section 19819, as that section read immediately
prior to its repeal by the act that enacted this chapter, within
three years of the date on which the application is submitted.
(c) The division shall adopt regulations to implement this
section.
(d) This section shall remain in effect only until the occurrence
of one of the events specified in Section 66 of the act that added
this chapter, and as of that date is repealed, unless a later enacted
statute, which is enacted before the occurrence of one of the events
specified in Section 66 of the act that added this chapter, deletes
or extends that date.
19960.4. It is the intent of the Legislature that if any
provision of this article is adjudged by a court to be invalid
because of any conflict or inconsistency with the Political Reform
Act of 1974 (Title 9 (commencing with Section 81000) of the
Government Code), as amended, that judgment shall not affect, impair,
or invalidate any other provision of this chapter and the
application thereof to other persons or circumstances, but shall be
confined to the operation of the clause, sentence, paragraph, or part
thereof directly involved in the controversy in which the judgment
was rendered and to the person or circumstances involved.
SEC. 4. Section 19810A is added to the Business and Professions
Code, to read:
19810A. (a) There is in state government the California Gambling
Control Commission, consisting of five members appointed by the
Governor, subject to confirmation by the Senate. On the effective
date of this section, the California Gambling Control Commission
shall succeed to all of the powers of the California Gambling Control
Board, which is hereby abolished. Wherever in this chapter
reference is made to the board, it shall be construed to mean the
commission.
(b) Jurisdiction, including jurisdiction over operation and
concentration, and supervision over gambling establishments in this
state and over all persons or things having to do with the operations
of gambling establishments is vested in the commission.
(c) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 5. Section 19811A is added to the Business and Professions
Code, to read:
19811A. (a) Each member of the commission shall be a citizen of
the United States and a resident of this state.
(b) No Member of the Legislature, no person holding any elective
office in state, county, or local government, and no officer or
official of any political party is eligible for appointment to the
commission.
(c) No more than three of the five members of the commission shall
be members of the same political party.
(d) A person is ineligible for appointment to the commission if,
within two years prior to appointment, the person, or any partnership
or corporation in which the person is a principal, was employed by,
retained by, or derived substantial income from, any gambling
establishment. For the purposes of this subdivision, "gambling
establishment" means one or more rooms wherein any gaming within the
meaning of Chapter 10 (commencing with Section 330) of Title 9 of
Part 1 of the Penal Code, or any controlled game within the meaning
of Section 337j of the Penal Code, is conducted, whether or not the
activity occurred in California.
(e) One member of the commission shall be a certified public
accountant with auditing experience, one member shall be an attorney
and a member of the State Bar of California with regulatory law
experience, one member shall have a background in law enforcement and
criminal investigation, one member shall have a background in
business with at least five years of business experience, and one
member shall be from the public at large.
(f) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 6. Section 19812A is added to the Business and Professions
Code, to read:
19812A. (a) Of the members initially appointed, two shall be
appointed for a term of two years, two shall be appointed for a term
of three years, and one shall be appointed for a term of four years.
After the initial terms, the term of office of each member of the
board is four years.
(b) The Governor shall appoint the members of the commission,
subject to confirmation by the Senate, and shall designate one member
to serve as chairperson. The initial appointments shall be made
within three months of the operative date of this section.
Thereafter, vacancies shall be filled within 60 days of the date of
the vacancy by the Governor, subject to confirmation by the Senate.
(c) The Governor may remove any member of the commission for
incompetence, neglect of duty, or corruption upon first giving him or
her a copy of the charges and an opportunity to be heard.
(d) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 7. Section 19813A is added to the Business and Professions
Code, to read:
19813A. (a) During their terms of office, the members of the
commission shall not engage in any other business, vocation, or
employment.
(b) Before entering upon the duties of his or her office, the
director and each member of the commission shall subscribe to the
constitutional oath of office and, in addition, swear that he or she
is not, and during his or her term of office shall not be,
pecuniarily interested in, or doing business with, any person,
business, or organization holding a gambling license.
(c) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 8. Section 19814A is added to the Business and Professions
Code, to read:
19814A. (a) The director and the members of the commission shall
receive the salary provided for by Section 11553.5 of the Government
Code.
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 9. Section 19815.5A is added to the Business and Professions
Code, to read:
19815.5A. (a) The commission shall establish and appoint a Gaming
Policy Advisory Committee of 10 members. The committee shall be
composed of representatives of controlled gambling licensees and
members of the general public in equal numbers. The executive
secretary 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.
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 10. Section 19815.8A is added to the Business and Professions
Code, to read:
19815.8A. (a) The commission shall investigate the following
matters:
(1) The consequences, benefits, and disadvantages of imposing a
state tax on revenue generated by licensed gambling establishments.
(2) Regulation of advertising for the purpose of limiting exposure
of children to materials promoting gambling.
(b) The commission shall report its findings to the Legislature
and the Governor no later than January 1, 2000.
(c) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 11. Section 19817A is added to the Business and Professions
Code, to read:
19817A. (a) The commission shall establish and maintain a general
office for the transaction of its business in Sacramento. The
commission may hold meetings at any place within the state when the
interests of the public may be better served.
(b) A public record of every vote shall be maintained at the
commission's general office.
(c) A majority of the membership of the commission is a quorum of
the commission. The concurring vote of three members of the
commission shall be required for any official action of the
commission or for the exercise of any of the commission's duties,
powers, or functions.
(d) Except as otherwise provided in this chapter, Article 9
(commencing with Section 11120) of Chapter 1 of Part 1 of Division 3
of Title 2 of the Government Code applies to meetings of the
commission. Notwithstanding Section 11125.1 of the Government Code,
documents, which are filed with the commission by the division for
the purpose of evaluating the qualifications of an applicant, are
exempt from disclosure under Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code.
(e) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 12. Section 19820A is added to the Business and Professions
Code, to read:
19820A. (a) The commission shall cause to be made and kept a
record of all proceedings at regular and special meetings of the
commission. These records shall be open to public inspection.
(b) The commission shall maintain a file of all applications for
licenses under this chapter, together with a record of all actions
taken with respect to those applications. The file and record shall
be open to public inspection.
(c) The division and commission may maintain any other files and
records as they deem appropriate. Except as provided in this
chapter, the records of the division and commission are exempt from
disclosure from Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code.
(d) Except as necessary for the administration of this chapter, no
commissioner and no official, employee, or agent of the commission
or the division, having obtained access to confidential records or
information in the performance of duties pursuant to this chapter,
shall knowingly disclose or furnish the records or information, or
any part thereof, to any person who is not authorized by law to
receive it. A violation of this subdivision is a misdemeanor.
(e) Notwithstanding subdivision (k) of Section 1798.24 of the
Civil Code, a court shall not compel disclosure of personal
information in the possession of the division or the commission to
any person in any civil proceeding wherein the division or the
commission is not a party, except for good cause and upon a showing
that the information cannot otherwise be obtained. Nothing herein
shall be construed to authorize the disclosure of personal
information that would otherwise be exempt from disclosure.
(f) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 13. Section 19821A is added to the Business and Professions
Code, to read:
19821A. (a) All files, records, reports, and other information in
possession of any state or local governmental agency that are
relevant to an investigation by the division conducted pursuant to
this chapter shall be made available to the division as requested.
However, any tax information received from a governmental agency
shall be used solely for effectuating the purposes of this chapter.
To the extent that the files, records, reports, or information
described in this section are confidential or otherwise privileged
from disclosure under any law or exercise of discretion, they shall
not lose that confidential or privileged status for having been
disclosed to the division.
(b) All files, records, reports, and other information pertaining
to gambling matters in the possession of the division shall be open
at all times to inspection by the members of the commission.
(c) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 14. Section 19822A is added to the Business and Professions
Code, to read:
19822A. (a) The responsibilities of the commission include,
without limitation, all of the following:
(1) Assuring that licenses, approvals, and permits are not issued
to, or held by, unqualified or disqualified persons, or by persons
whose operations are conducted in a manner that is inimical to the
public health, safety, or welfare.
(2) Assuring that there is no material involvement, directly or
indirectly, with a licensed gambling operation, or the ownership or
management thereof, by unqualified or disqualified persons, or by
persons whose operations are conducted in a manner that is inimical
to the public health, safety, or welfare.
(b) For the purposes of this section, "unqualified person" means a
person who is found to be unqualified pursuant to the criteria set
forth in Section 19848, and "disqualified person" means a person who
is found to be disqualified pursuant to the criteria set forth in
Section 19850.
(c) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 15. Section 19823A is added to the Business and Professions
Code, to read:
19823A. (a) The commission shall have all powers necessary and
proper to enable it fully and effectually to carry out the policies
and purposes of this chapter, including, without limitation, the
power to do all of the following:
(1) Require any person to apply for a license or approval as
specified in this chapter.
(2) For any cause deemed reasonable by the commission, deny any
application for a license, permit, or approval provided for in this
chapter, limit, condition, or restrict any such license, permit, or
approval, or impose any fine upon any person licensed or approved.
(3) Approve or disapprove transactions, events, and processes as
provided in this chapter.
(4) Take actions deemed to be reasonable to ensure that no
ineligible, unqualified, disqualified, or unsuitable persons are
associated with controlled gambling activities.
(5) Take actions deemed to be reasonable to ensure that gambling
activities take place only in suitable locations.
(6) Grant temporary licenses or approvals on appropriate terms and
conditions.
(7) Institute a civil action in any superior court against any
person subject to this chapter to restrain a violation of this
chapter. An action brought against a person pursuant to this section
does not preclude a criminal action or administrative proceeding
against that person by the Attorney General or any district attorney
or city attorney.
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 16. Section 19824A is added to the Business and Professions
Code, to read:
19824A. The division shall have all of the following
responsibilities:
(a) To investigate the qualifications of applicants before any
license is issued, and to investigate any request to the commission
for any approval or permission that may be required pursuant to this
chapter. The division may recommend the denial or the limitation,
conditioning, or restriction of any license, approval, or permission.
(b) To monitor the conduct of all licensees and other persons
having a material involvement, directly or indirectly, with a
gambling operation or its holding company, for the purpose of
ensuring that licenses are not issued or held by, and that there is
no direct or indirect material involvement with, a gambling operation
or holding company by ineligible, unqualified, disqualified, or
unsuitable persons, or persons whose operations are conducted in a
manner that is inimical to the public health, safety, or welfare.
(c) To investigate suspected violations of this chapter or laws of
this state relating to gambling, including any activity prohibited
by Chapter 9 (commencing with Section 319) or Chapter 10 (commencing
with Section 330) of Title 9 of Part 1 of the Penal Code.
(d) To investigate complaints that are lodged against licensees,
or other persons associated with a gambling operation, by members of
the public.
(e) To initiate, where appropriate, disciplinary actions as
provided in this chapter. In connection with any disciplinary
action, the division may seek restriction, limitation, suspension, or
revocation of any license or approval, or the imposition of any fine
upon any person licensed or approved.
(f) To adopt regulations reasonably related to its functions and
duties as specified in this chapter.
(g) Approve the play of any controlled game, including placing
restrictions and limitations on how a controlled game may be played.
(h) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 17. Article 3 (commencing with Section 19830A) is added to
Chapter 5 of Division 8 of the Business and Professions Code, to
read:
Article 3. Regulations
19830A. (a) The commission may adopt regulations for the
administration and enforcement of this chapter. To the extent
appropriate, regulations of the commission and the division shall
take into consideration the operational differences of large and
small establishments.
(b) Subject to subdivision (d), Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code does not apply to the
following regulations of the commission, if adopted within 90 days
after the effective date of this chapter:
(1) Regulations described in subdivisions (a), (b), (e), (g), (h),
(i) to (n), inclusive, (p), and (q) of Section 19834A.
(2) Regulations adopted for the purpose of implementing Section 62
of the act that enacted this chapter.
(c) Any regulation adopted pursuant to subdivision (b) shall be
filed with the Secretary of State and shall be effective immediately
upon that filing.
(d) Except as otherwise provided in this subdivision, no
regulation adopted pursuant to subdivision (b) shall be valid after
September 1, 1998, unless the regulation has been subsequently
readopted by the division in accordance with Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code, subject to all of the following:
(1) This subdivision does not apply to a regulation that is
exempted from Article 5 (commencing with Section 11346) of Chapter
3.5 of Division 3 of Title 2 of the Government Code, by operation of
subdivision (a) of Section 11346.1 of the Government Code.
(2) If, prior to September 1, 1998, the division has mailed a
notice described in Section 11346.4 of the Government Code with
respect to a regulation adopted pursuant to subdivision (b), the
regulation shall not cease to be effective pursuant to this
subdivision until the earlier of one of the following events:
(A) The readopted regulation is filed with the Secretary of State
pursuant to subdivision (a) of Section 11349.3, or subdivision (e) of
Section 11349.5, of the Government Code.
(B) The readopted regulation has been disapproved by the Office of
Administrative Law and the time within which a request for review
may be filed pursuant to Section 11349.5 of the Government Code has
expired.
(C) The readopted regulation is disapproved by the Office of
Administrative Law, and the Governor transmits a decision pursuant to
subdivision (c) of Section 11349.5 of the Government Code affirming
the disapproval.
19834A. The regulations adopted by the commission shall do all of
the following:
(a) With respect to applications, registrations, investigations,
and fees, the regulations shall include, but not be limited to,
provisions that do all of the following:
(1) Prescribe the method and form of application and registration.
(2) Prescribe the information to be furnished by any applicant,
licensee, or registrant concerning, as appropriate, the person's
personal history, habits, character, associates, criminal record,
business activities, organizational structure, and financial affairs,
past or present.
(3) Prescribe the information to be furnished by an owner licensee
relating to the licensee's gambling employees.
(4) Require fingerprinting or other methods of identification of
an applicant, licensee, or employee of a licensee.
(5) Prescribe the manner and method of collection and payment of
fees and issuance of licenses.
(b) Provide for the approval of game rules and equipment by the
division to ensure fairness to the public and compliance with state
laws.
(c) Implement the provisions of this chapter relating to
licensing.
(d) Require owner licensees to report and keep records of
transactions, as determined by the division, involving cash or
credit. The regulations may include, without limitation, regulations
requiring owner licensees to file with the division reports similar
to those required by Sections 5313 and 5314 of Title 31 of the United
States Code, and by Sections 103.22 and 103.23 of Title 31 of the
Code of Federal Regulations, and any successor provisions thereto,
from financial institutions, as defined in Section 5312 of Title 31
of the United States Code and Section 103.11 of Title 31 of the Code
of Federal Regulations, and any successor provisions.
(e) Provide for the receipt of protests and written comments on an
application by public agencies, public officials, local governing
bodies, or residents of the location of the gambling establishment or
future gambling establishment.
(f) Provide for the disapproval of advertising by licensed
gambling establishments that is determined by the division to be
deceptive to the public. Regulations adopted by the division for
advertising by licensed gambling establishments shall be consistent
with the advertising regulations adopted by the California Horse
Racing Board and the Lottery Commission. Advertisement that appeals
to children or adolescents or that offers gambling as a means of
becoming wealthy is presumptively deceptive.
(g) Govern all of the following:
(1) The extension of credit.
(2) The cashing, deposit, and redemption of checks or other
negotiable instruments.
(3) The verification of identification in monetary transactions.
(h) Prescribe minimum procedures for adoption by owner licensees
to exercise effective control over their internal fiscal and gambling
affairs, which shall include, but not be limited to, provisions for
all of the following:
(1) The safeguarding of assets and revenues, including the
recording of cash and evidences of indebtedness.
(2) Prescribing the manner in which compensation from games and
gross revenue shall be computed and reported by an owner licensee.
(3) The provision of reliable records, accounts, and reports of
transactions, operations, and events, including reports to the
division.
(i) Provide for the adoption and use of internal audits, whether
by qualified internal auditors or by certified public accountants.
As used in this subdivision, "internal audit" means a type of control
that operates through the testing and evaluation of other controls
and that is also directed toward observing proper compliance with the
minimum standards of control prescribed in subdivision (h).
(j) Require periodic financial reports from each owner licensee.
(k) Specify standard forms for reporting financial conditions,
results of operations, and other relevant financial information.
(l) Formulate a uniform code of accounts and accounting
classifications to ensure consistency, comparability, and effective
disclosure of financial information.
(m) Prescribe intervals at which the information in subdivisions
(j) and (k) shall be furnished to the division.
(n) Require audits to be conducted, in accordance with generally
accepted auditing standards, of the financial statements of all owner
licensees whose annual gross revenues equal or exceed a specified
sum. However, nothing herein shall be construed to limit the
division's authority to require audits of any owner licensee.
Audits, compilations, and reviews provided for in this subdivision
shall be made by independent certified public accountants licensed to
practice in this state.
(o) Restrict, limit, or otherwise regulate any activity that is
related to the conduct of controlled gambling, consistent with the
purposes of this chapter.
(p) Define and limit the area, games, hours of operation, number
of tables, wagering limits, and equipment permitted, or the method of
operation of games and equipment, if the division determines that
local regulation of these subjects is insufficient to protect the
health, safety, or welfare of residents in geographical areas
proximate to a gambling establishment.
(q) Prohibit gambling establishments from cashing checks drawn
against any federal, state, or county fund, including, but not
limited to, social security, unemployment insurance, disability
payments, or public assistance payments. However, a gambling
establishment shall not be prohibited from cashing any payroll checks
or checks for the delivery of goods or services that are drawn
against a federal, state, or county fund.
(r) Provide for standards, specifications, and procedures
governing the manufacture, distribution, including the sale and
leasing, inspection, testing, location, operation, repair, and
storage of gambling equipment, and for the licensing of persons
engaged in the business of manufacturing, distributing, including the
sale and leasing, inspection, testing, repair, and storage of
gambling equipment.
19834.5A. (a) The commission shall not prohibit, on a statewide
basis, the play of any game or restrict the manner in which any game
is played, unless the commission, in a proceeding pursuant to this
article, finds that the game, or the manner in which the game is
played, violates a law of the United States, a law of this state, or
a local ordinance.
(b) Nothing in this section shall be construed to limit the powers
of the commission in a proceeding against a licensee pursuant to
Article 9.5 (commencing with Section 19920A).
(c) No regulation prohibiting a game or the manner in which a game
is played shall be deemed to be an emergency regulation.
19834.6A. The commission shall not prohibit, on a statewide
basis, the placing of a wager on a controlled game by a person at a
gaming table, if the person is present at the table and actively
participating in the hand with a single-seated player upon whose hand
the wagers are placed.
19835A. (a) The commission shall, by regulation, provide for the
formulation of a list of persons who are to be excluded or ejected
from any gambling establishment. The list may include any person
whose presence in the establishment is determined by the commission
to pose a threat to the interests of this state or to controlled
gambling, or both.
(b) In making the determination described in subdivision (a), the
commission may consider, but is not limited to considering, any of
the following:
(1) Prior conviction of a crime that is a felony in this state or
under the laws of the United States, a crime involving moral
turpitude, or a violation of the gambling laws of this or any other
state.
(2) The violation of, or conspiracy to violate, the provisions of
this chapter relating to the failure to disclose an interest in a
gambling establishment for which the person is required to obtain a
license, or the willful evasion of fees.
(3) A notorious or unsavory reputation that would adversely affect
public confidence and trust that the gambling industry is free from
criminal or corruptive elements.
(4) An order of exclusion or ejection from a racing inclosure
issued by the California Horse Racing Board.
(c) The commission shall distribute the list of persons who are to
be excluded or ejected from any gambling establishment to all owner
licensees and shall provide notice to any persons included on the
list.
(d) The commission shall adopt regulations establishing procedures
for hearing of petitions by persons who are ejected or excluded from
licensed premises pursuant to this section or pursuant to Section
19835.5A.
(e) The commission may revoke, limit, condition, or suspend the
license of an owner, or fine an owner licensee, if that licensee
knowingly fails to exclude or eject from the gambling establishment
of that licensee any person included on the list of persons to be
excluded or ejected.
19835.5A. (a) A licensee may remove from his or her licensed
premises any person who, while on the premises:
(1) Is a disorderly person, as defined by Section 647 of the Penal
Code.
(2) Interferes with a lawful gambling operation.
(3) Solicits or engages in any act of prostitution.
(4) Begs, is boisterous, or is otherwise offensive to other
persons.
(5) Commits any public offense.
(6) Is intoxicated.
(7) Is a person who the commission, by regulation, has determined
should be excluded from licensed gambling establishments in the
public interest.
(b) Nothing in this section shall be deemed, expressly or
impliedly, to preclude a licensee from exercising the right to deny
access to or to remove any person from its premises or property for
any reason the licensee deems appropriate.
19836A. This article shall become operative on the occurrence of
one of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 18. Section 19841A is added to the Business and Professions
Code, to read:
19841A. (a) An owner of a gambling enterprise that is not a
natural person shall not be eligible for a state gambling license
unless each of the following persons individually applies for and
obtains a state gambling license:
(1) If the owner is a corporation, then each officer, director,
and shareholder, other than a holding or intermediary company, of the
owner. The foregoing does not apply to an owner that is either a
publicly traded racing association or a qualified racing association.
(2) If the owner is a publicly traded racing association, then
each officer, director, and owner, other than an institutional
investor, of five percent or more of the outstanding shares of the
publicly traded corporation.
(3) If the owner is a qualified racing association, then each
officer, director, and shareholder, other than an institutional
investor, of the subsidiary corporation and any owner, other than an
institutional investor, of five percent or more of the outstanding
shares of the publicly traded corporation.
(4) If the owner is a partnership, then every general and limited
partner of, and every trustee or person, other than a holding or
intermediary company, having or acquiring a direct or beneficial
interest in, that partnership owner.
(5) If the owner is a trust, then the trustee, every beneficiary,
and, in the discretion of the commission, the trustor of the trust.
(6) If the owner is a business organization other than a
corporation, partnership, or trust, then all those persons as the
commission may require, consistent with this chapter.
(7) Each person, other than a landlord, who receives, or is to
receive, any percentage share of the revenue earned by the owner from
gambling activities.
(8) Every employee, agent, guardian, personal representative,
lender, or holder of indebtedness of the owner who, in the judgment
of the commission, has the power to exercise a significant influence
over the gambling operation.
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 19. Section 19842A is added to the Business and Professions
Code, to read:
19842A. (a) The commission, by regulation or order, may require
that the following persons register with the commission, apply for a
finding of suitability, or apply for a gambling license:
(1) Any person who furnishes any services or any property to a
gambling enterprise under any arrangement whereby that person
receives payments based on earnings, profits, or receipts from
controlled gambling.
(2) Any person who owns an interest in the premises of a licensed
gambling establishment or in real property used by a licensed
gambling establishment.
(3) Any person who does business on the premises of a licensed
gambling establishment.
(4) Any person who is an independent agent of, or does business
with, a gambling enterprise as a ticket purveyor, a tour operator,
the operator of a bus program, or the operator of any other type of
travel program or promotion operated with respect to a licensed
gambling establishment.
(5) Any person who provides any goods or services to a gambling
enterprise for compensation that the commission finds to be grossly
disproportionate to the value of the goods or services provided.
(6) Every person who, in the judgment of the commission, has the
power to exercise a significant influence over the gambling
operation.
(b) If a publicly traded corporation is engaged in activities
described in paragraphs (2), (3), and (4) of subdivision (a), the
division may require the corporation and the following other persons
to apply for and obtain a license or finding of suitability:
(1) Any officer or director.
(2) Any owner, other than an institutional investor, of five
percent or more of the outstanding shares of the corporation.
(c) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 20. Section 19846A is added to the Business and Professions
Code, to read:
19846A. (a) 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 30 calendar days
after receipt of the order.
(b) This section shall become operative on the occurrence of one
of the events specified in paragraphs (1) to (4), inclusive, of
Section 66 of the act that added this section to the Business and
Professions Code.
SEC. 21. Section 19847A is added to the Business and Professions
Code, to read:
19847A. (a) Any person who the commission determines is qualified
to receive a state license, having due consideration for the proper
protection of the health, safety, and general welfare of the
residents of the State of California and the declared policy of this
state, may be issued a license. The burden of proving his or her
qualifications to receive any license is on the applicant.
(b) An application to receive a license constitutes a request for
a determination of the applicant's general character, integrity, and
ability to participate in, engage in, or be associated with,
controlled gambling.
(c) In reviewing an application for any license, the commission
shall consider whether issuance of the license is inimical to public
health, safety, or welfare, and whether issuance of the license will
undermine public trust that the gambling operations with respect to
which the license would be issued are free from criminal and
dishonest elements and would be conducted honestly.
(d) This section shall become operative on the occurrence of one
of the events specified in paragraphs (1) to (4), inclusive, of
Section 66 of the act that added this section to the Business and
Professions Code.
SEC. 22. Section 19848A is added to the Business and Professions
Code, to read:
19848A. No gambling license shall be issued unless, based on all
of the information and documents submitted, the commission is
satisfied that the applicant is all of the following:
(a) A person of good character, honesty, and integrity.
(b) A person whose prior activities, criminal record, if any,
reputation, habits, and associations do not pose a threat to the
public interest of this state, or to the effective regulation and
control of controlled gambling, or create or enhance the dangers of
unsuitable, unfair, or illegal practices, methods, and activities in
the conduct of controlled gambling or in the carrying on of the
business and financial arrangements incidental thereto.
(c) A person that is in all other respects qualified to be
licensed as provided in this chapter.
(d) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 23. Section 19850A is added to the Business and Professions
Code, to read:
19850A. (a) The commission shall deny a license to any applicant
who is disqualified for any of the following reasons:
(1) Failure of the applicant to clearly establish eligibility and
qualification in accordance with this chapter.
(2) Failure of the applicant to provide information,
documentation, and assurances required by this chapter or requested
by the director, or failure of the applicant to reveal any fact
material to qualification, or the supplying of information that is
untrue or misleading as to a material fact pertaining to the
qualification criteria.
(3) Conviction of the applicant for any crime punishable as a
felony.
(4) Conviction of the applicant for any misdemeanor involving
dishonesty or moral turpitude within the 10-year period immediately
preceding the submission of the application, unless the applicant has
been granted relief pursuant to Section 1203.4, 1203.4a, or 1203.45
of the Penal Code.
(5) Association of the applicant with criminal profiteering
activity or organized crime, as defined by Section 186.2 of the Penal
Code.
(6) Contumacious defiance by the applicant of any legislative
investigatory body, or other official investigatory body of any state
or of the United States, when that body is engaged in the
investigation of crimes relating to gambling; official corruption
related to gambling activities; or criminal profiteering activity or
organized crime, as defined by Section 186.2 of the Penal Code.
(7) The applicant is less than 21 years of age.
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 24. Section 19851A is added to the Business and Professions
Code, to read:
19851A. (a) The commission shall deny a gambling license with
respect to any gambling establishment that is located in a city,
county, or city and county that does not have an ordinance governing
all of the following matters:
(1) The hours of operation of gambling establishments.
(2) Patron security and safety in and around the gambling
establishments.
(3) The location of gambling establishments.
(4) Wagering limits in gambling establishments.
(5) The number of gambling tables in each gambling establishment
and in the jurisdiction.
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 25. Section 19852A is added to the Business and Professions
Code, to read:
19852A. (a) In addition to other grounds stated in this chapter,
the commission shall consider denying a gambling license for any of
the following reasons:
(1) If issuance of the license with respect to the proposed
gambling establishment or expansion would tend unduly to create law
enforcement problems in a city, county, or city and county other than
the city, county, or city and county that has regulatory
jurisdiction over the applicant's premises.
(2) If an applicant fails to conduct an economic feasibility study
that demonstrates to the satisfaction of the commission that the
proposed gambling establishment will be economically viable, and that
the owners have sufficient resources to make the gambling
establishment successful. The commission shall hold a public hearing
for the purpose of reviewing the feasibility study.
(3) If issuance of the license is sought in respect to a new
gambling establishment, or the expansion of an existing gambling
establishment, that is to be located or is located near an existing
school, an existing building used primarily as a place of worship, an
existing playground or other area of juvenile congregation, an
existing hospital, convalescence facility, or near another similarly
unsuitable area, as determined by regulation of the commission, which
is located in a city, county, or city and county other than the
city, county, or city and county that has regulatory jurisdiction
over the applicant's gambling premises.
(b) For the purposes of this section, "expansion" means an
increase of 25 percent or more in the number of authorized gambling
tables in a gambling establishment, based on the number of gambling
tables for which a license was initially issued pursuant to this
chapter.
(c) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 26. Section 19853A is added to the Business and Professions
Code, to read:
19853A. (a) Application for a state license or other commission
action shall be made on forms furnished by the commission.
(b) The application for a gambling license shall include all of
the following:
(1) The name of the proposed licensee.
(2) The name and location of the proposed gambling establishment.
(3) The gambling games proposed to be conducted.
(4) The names of all persons directly or indirectly interested in
the business and the nature of the interest.
(5) A description of the proposed gambling establishment and
operation.
(6) Any other information and details the commission may require
in order to discharge its duty properly.
(c) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 27. Section 19854A is added to the Business and Professions
Code, to read:
19854A. (a) An applicant for licensing or for any approval or
consent required by this chapter, shall make full and true disclosure
of all information to the division and the commission as necessary
to carry out the policies of this state relating to licensing,
registration, and control of gambling.
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 28. Section 19856A is added to the Business and Professions
Code, to read:
19856A. (a) Within a reasonable time after the filing of an
application and any supplemental information the division may
require, and the deposit of any fee required pursuant to Section
19855, the division shall commence its investigation of the applicant
and, for that purpose, may conduct any proceedings it deems
necessary. To the extent practicable, all applications shall be
acted upon within 180 calendar days of the date of submission of a
completed application. If an investigation has not been concluded
within 180 days after the date of submission of a completed
application, the division shall inform the applicant in writing of
the status of the investigation and shall also provide the applicant
with an estimated date on which the investigation may reasonably be
expected to be concluded.
(b) If denial of the application is recommended, the director
shall prepare and file with the commission his or her written reasons
upon which the recommendation is based.
(1) Prior to filing his or her recommendation with the
commission, the director shall meet with the applicant, or the
applicant's duly authorized representative, and inform him or her
generally of the basis for any proposed recommendation that the
application be denied, restricted, or conditioned.
(2) Not less than 10 business days prior to the meeting of the
commission at which the application is to be considered, the division
shall deliver to the applicant a summary of the director's final
report and recommendation.
(3) Nothing herein shall require the division to divulge to the
applicant any confidential information received from any law
enforcement agency or any information received from any person with
assurances that the information would be maintained confidential, and
nothing herein shall require the division to divulge any information
that might reveal the identity of any informer or jeopardize the
safety of any person.
(c) A recommendation of denial of an application shall be without
prejudice to a new and different application filed in accordance with
applicable regulations.
(d) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 29. Section 19857A is added to the Business and Professions
Code, to read:
19857A. (a) A request for withdrawal of any application may be
made at any time prior to final action upon the application by the
director by the filing of a written request to withdraw with the
commission. For the purposes of this section, final action by the
division means a final determination by the director regarding his or
her recommendation on the application to the commission. The
commission shall not grant the request unless the applicant has
established that withdrawal of the application would be consistent
with the public interest and the policies of this chapter. If a
request for withdrawal is denied, the division may go forward with
its investigation and make a recommendation to the commission upon
the application, and the commission may act upon the application as
if no request for withdrawal had been made. If a request for
withdrawal is granted with prejudice, the applicant thereafter shall
be ineligible to renew its application until the expiration of one
year from the date of the withdrawal. Unless the commission
otherwise directs, no fee or other payment relating to any
application is refundable by reason of withdrawal of an application.
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 30. Section 19858A is added to the Business and Professions
Code, to read:
19858A. (a) The commission, after considering the recommendation
of the director and such other testimony and written comments as may
be presented at the meeting, or as may have been submitted in
writing to the commission prior to the meeting, may either deny the
application or grant a license to an applicant who it determines to
be qualified to hold the license.
(b) When the commission grants an application for a license or
approval, the commission may limit or place restrictions thereon as
it may deem necessary in the public interest, consistent with the
policies described in this chapter.
(c) When an application is denied, the executive secretary shall
prepare and file a detailed statement of the commission's reasons for
the denial.
(d) All proceedings at a meeting of the commission relating to a
license application shall be recorded stenographically or on
audiotape.
(e) A decision of the commission denying a license or approval, or
imposing any condition or restriction on the grant of a license or
approval may be reviewed by petition pursuant to Section 1085 of the
Code of Civil Procedure. Section 1094.5 of the Code of Civil
Procedure shall not apply to any judicial proceeding described in the
foregoing sentence, and the court may grant the petition only if the
court finds that the action of the commission was arbitrary and
capricious, or that the action exceeded the commission's
jurisdiction.
(f) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 31. Section 19858.7A is added to the Business and Professions
Code, to read:
19858.7A. (a) No member of the commission may communicate ex
parte, directly or indirectly, with any applicant, or any agent,
representative, or person acting on behalf of an applicant, upon the
merits of an application for a license, permit, registration, or
approval while the application is pending disposition before the
division or the commission.
(b) No applicant, or any agent, representative, or person acting
on behalf of an applicant, and no person who has a direct or indirect
interest in the outcome of a proceeding to consider an application
for a license, permit, registration, or approval may communicate ex
parte, directly or indirectly, with any member of the commission,
upon the merits of the application while the application is pending
disposition before the division.
(c) No employee or agent of the division, applicant, or any agent,
representative, or person acting on behalf of an applicant, and no
person who has a direct or indirect interest in the outcome of a
proceeding to consider an application for a license, permit,
registration, or approval may communicate ex parte, directly or
indirectly, with any member of the commission, upon the merits of the
application, while the application is pending disposition before the
commission.
(d) The receipt by a member of the commission of an ex parte
communication prohibited by this section may provide the basis for
disqualification of that member or the denial of the application.
The commission shall adopt regulations to implement this subdivision.
(e) For the purposes of this subdivision, "ex parte" means a
communication without notice and opportunity for all parties to
participate in the communication.
(f) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 32. Section 19860A is added to the Business and Professions
Code, to read:
19860A. (a) Subject to subdivision (b) of Section 19840.5, the
commission shall issue and deliver to the applicant a license
entitling the applicant to engage in the activity for which the
license is issued, together with an enumeration of any specific terms
and conditions of the license if both of the following conditions
have been met:
(1) The commission is satisfied that the applicant is eligible and
qualified to receive the license.
(2) All license fees required by statute and by regulations of the
commission have been paid.
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 33. Section 19862A is added to the Business and Professions
Code, to read:
19862A. (a) Subject to the power of the commission to deny,
revoke, suspend, condition, or limit any license, as provided in this
chapter, a license shall be renewed annually by the commission from
the date of issuance, upon proper application for renewal and payment
of state license fees as required by statute or regulation.
(b) An application for renewal of a gambling license shall be
filed by the owner licensee with the commission no later than 120
calendar days prior to the expiration of the current license, and all
license fees shall be paid to the commission on or before the
expiration of the current license. The commission shall act upon any
application for renewal prior to the date of expiration of the
current license. Upon renewal of any owner license, the commission
shall issue an appropriate renewal certificate or validating device
or sticker.
(c) Unless the commission determines otherwise, renewal of an
owner's gambling license shall be deemed to effectuate the renewal of
every other gambling license endorsed thereon.
(d) In addition to the penalties provided by law, any owner
licensee who deals, operates, carries on, conducts, maintains, or
exposes for play any gambling game after the expiration date of the
gambling license is liable to the state for all license fees and
penalties that would have been due upon renewal.
(e) If an owner licensee fails to renew the gambling license as
provided in this chapter, the commission may order the immediate
closure of the premises and a cessation of all gambling activity
therein until the license is renewed.
(f) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 34. Section 19863A is added to the Business and Professions
Code, to read:
19863A. (a) Neither an owner licensee, nor a California affiliate
of an owner licensee, shall enter into, without prior approval of
the commission, any contract or agreement with a person who is denied
a license, or whose license is suspended or revoked by the
commission, or with any business enterprise under the control of that
person, after the date of receipt of notice of the action by the
division.
(b) An owner licensee or an affiliate of the owner licensee shall
not employ, without prior approval of the commission, any person in
any capacity for which he or she is required to be licensed, if the
person has been denied a license, or if his or her license has been
suspended or revoked after the date of receipt of notice of the
action by the commission. Neither an owner licensee, nor a
California affiliate of an owner licensee, without prior approval of
the commission, shall enter into any contract or agreement with a
person whose application has been withdrawn with prejudice, or with
any business enterprise under the control of that person, for the
period of time during which the person is prohibited from filing a
new application for licensure.
(c) (1) If an employee who is required to be licensed pursuant to
this chapter fails to apply for a license within the time specified
by regulation, is denied a license, or has his or her license revoked
by the commission, the employee shall be terminated in any capacity
in which he or she is required to be licensed and he or she shall not
be permitted to exercise a significant influence over the gambling
operation, or any part thereof, upon being notified of that action.
(2) If an employee who is required to be licensed pursuant to this
chapter has his or her license suspended, the employee shall be
suspended in any capacity in which he or she is required to be
licensed and shall not be permitted to exercise a significant
influence over the gambling operation, or any part thereof, during
the period of suspension, upon being notified of that action.
(3) If the owner licensee designates another employee to replace
the employee whose employment was terminated, the owner licensee
shall promptly notify the division and shall require the newly
designated employee to apply for a license.
(d) An owner licensee or an affiliate of the owner licensee shall
not pay to a person whose employment has been terminated pursuant to
subdivision (c) any remuneration for any service performed in any
capacity in which the person is required to be licensed except for
amounts due for services rendered before the date of receipt of
notice of the action by the division. Neither an owner licensee, nor
an affiliate thereof, during the period of suspension, shall pay to
a person whose employment has been suspended pursuant to subdivision
(c), any remuneration for any service performed in any capacity in
which the person is required to be licensed, except for amounts due
for services rendered before the date of receipt of notice of the
action by the division.
(e) Except as provided in subdivision (c), a contract or agreement
for the provision of services or property to an owner licensee or an
affiliate thereof, or for the conduct of any activity at a gambling
establishment, which is to be performed by a person required by this
chapter or by the division to be licensed, shall be terminated upon a
suspension or revocation of the person's license.
(f) In any case in which a contract or agreement for the provision
of services or property to an owner licensee or an affiliate
thereof, or for the conduct of any activity at a gambling
establishment, is to be performed by a person required by this
chapter or by the commission to be licensed, the contract shall be
deemed to include a provision for its termination without liability
on the part of the owner licensee or its duly registered holding
company upon a suspension or revocation of the person's license. In
any action brought by the division to terminate a contract pursuant
to subdivision (c) or (e), it shall not be a defense that the
agreement does not expressly include the provision described in this
subdivision, and the lack of express inclusion of the provision in
the agreement shall not be a basis for enforcement of the contract by
a party thereto.
(g) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 35. Section 19864A is added to the Business and Professions
Code, to read:
19864A. (a) With regard to a person who has had his or her
application for a license denied by the commission, all of the
following shall apply:
(1) Except as provided in paragraph (3), the person shall not be
entitled to profit from his or her investment in any business entity
that has applied for or been granted a state license.
(2) The person shall not retain his or her interest in a business
entity described in paragraph (1) beyond that period prescribed by
the commission.
(3) The person shall not accept more for his or her interest in a
business entity described in paragraph (1) than he or she paid for
it, or the market value on the date of the denial of the license or
registration, whichever is higher.
(4) Nothing in this section shall be construed as a restriction or
limitation on the powers of the commission specified in this
chapter.
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 36. Section 19871A is added to the Business and Professions
Code, to read:
19871A. (a) No corporation is eligible to receive a license to
own a gambling enterprise unless the conduct of controlled gambling
is among the purposes stated in its articles of incorporation and the
articles of incorporation have been submitted to and approved by the
commission.
(b) On and after the effective date of this section, the Secretary
of State shall not accept for filing any articles of incorporation
of any corporation that include as a stated purpose the conduct of
controlled gambling, or any amendment thereto, or any amendment that
adds this purpose to articles of incorporation already filed, unless
the articles have, or amendment has, been approved by the commission.
(c) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 37. Section 19872A is added to the Business and Professions
Code, to read:
19872A. (a) If at any time the commission denies a license to an
individual owner of any security issued by a corporation that applies
for or holds an owner license, the owner of the security shall
immediately offer the security to the issuing corporation for
purchase. The corporation shall purchase the security so offered,
for cash in an amount not greater than fair market value, within 30
calendar days after the date of the offer.
(b) Beginning upon the date when the division serves notice of the
denial upon the corporation, it is unlawful for the denied security
owner to do any of the following:
(1) Receive any dividend or interest upon any security described
in subdivision (a).
(2) Exercise, directly or through any trustee or nominee, any
voting right conferred by any security described in subdivision (a).
(3) Receive any remuneration in any form from the corporation for
services rendered or for any other purpose.
(c) Every security issued by a corporate owner licensee shall bear
a statement, on both sides of the certificate evidencing the
security, of the restrictions imposed by this section.
(d) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 38. Section 19882A is added to the Business and Professions
Code, to read:
19882A. (a) The purported sale, assignment, transfer, pledge, or
other disposition of any interest in a limited partnership that holds
a gambling license, or the grant of an option to purchase the
interest, is void unless approved in advance by the commission.
(b) If at any time the commission denies a license to an
individual owner of any interest described in subdivision (a), the
division shall immediately notify the partnership of that fact. The
limited partnership, within 30 calendar days from the date it
receives the notice from the division, shall return to the denied
owner of the interest, in cash, the amount of his or her capital
account as reflected on the books of the partnership.
(c) Beginning upon the date when the commission serves a notice of
denial upon the limited partnership, it is unlawful for the denied
owner of the interest to do any of the following:
(1) Receive any share of the revenue or interest upon the limited
partnership interest.
(2) Exercise, directly or through any trustee or nominee, any
voting right conferred by that interest.
(3) Receive any remuneration in any form from the limited
partnership, for services rendered or for any other purpose.
(d) Every certificate of limited partnership of any limited
partnership holding a gambling license shall contain a statement of
the restrictions imposed by this section.
(e) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 39. Section 19883A is added to the Business and Professions
Code, to read:
19883A. (a) To the extent required by this chapter, general
partners, limited partners, lenders, holders of evidence of
indebtedness, underwriters, agents, or employees of a limited
partnership that holds or applies for a license to own a gambling
enterprise shall be licensed individually. The limited partnership
shall require these persons to apply for and obtain a gambling
license. A person who is required to be licensed by this section as
a general or limited partner shall not hold that position until he or
she secures the required approval of the commission. A person who
is required to be licensed pursuant to a decision of the commission
shall apply for a license within 30 days after the commission
requests him or her to do so.
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 40. Article 7 (commencing with Section 19900A) is added to
Chapter 5 of Division 8 of the Business and Professions Code, to
read:
Article 7. Restrictions on Certain Transactions
19900A. (a) Except as may be provided by regulation of the
division, the following security interests shall not be enforced
without the prior approval of the commission and compliance with
regulations adopted pursuant to subdivision (b):
(1) In a security issued by a corporation that is a holder of a
gambling license in this state.
(2) In a security issued by a holding company that is not a
publicly traded corporation.
(3) In a security issued by a partnership that is a holder of a
gambling license in this state.
(b) The division shall adopt regulations establishing the
procedure for the enforcement of a security interest. Any remedy
provided by the regulations for the enforcement of the security
interest is in addition to any other remedy provided by law.
19901A. It is unlawful for any person to sell, purchase, lease,
hypothecate, borrow or loan money, or create a voting trust agreement
or any other agreement of any sort to, or with, any licensee in
connection with any controlled gambling operation licensed under this
chapter or with respect to any portion of the gambling operation,
except in accordance with the regulations of the commission.
19902A. When any person contracts to sell or lease any property
or interest in property, real or personal, under circumstances that
require the approval or licensing of the purchaser or lessee by the
commission pursuant to subdivision (a) of Section 19842, the contract
shall not specify a closing date for the transaction that is earlier
than the expiration of 90 calendar days after the submission of the
completed application for approval for licensing. Any provision of a
contract that specifies an earlier closing date is void for all
purposes, but the invalidity does not affect the validity of any
other provision of the contract.
19903A. When any person contracts to sell or lease any property
or interest in property, real or personal, under circumstances that
require the approval or licensing of the purchaser or lessee by the
commission pursuant to subdivision (a) of Section 19842A, the
contract shall contain a provision satisfactory to the commission
regarding responsibility for the payment of any fees due pursuant to
any subsequent deficiency determinations made under this chapter that
shall encompass any period of time before the closing date of the
transaction.
19904A. The purported sale, assignment, transfer, pledge, or
other disposition of any security issued by a corporation that holds
a gambling license, or the grant of an option to purchase that
security, is void unless approved in advance by the commission.
19905A. Every owner licensee that is involved in a transaction
for the extension or redemption of credit by the licensee, or for the
payment, receipt, or transfer of coin, currency, or other monetary
instruments, as specified by the commission, in an amount,
denomination, or amount and denomination, or under circumstances
prescribed by regulations, and any other participant in the
transaction, as specified by the commission, shall, if required by
regulation, make and retain a record of, or file with the division a
report on, the transaction, at the time and in the manner prescribed
by regulations.
19906A. This article shall become operative on the occurrence of
one of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 41. Section 19910.5A is added to the Business and Professions
Code, to read:
19910.5A. (a) (1) A person shall not be employed as a gambling
enterprise employee, or serve as an independent agent, except as
provided in paragraph (2), unless he or she is the holder of one of
the following:
(A) A valid work permit issued in accordance with the applicable
ordinance or regulations of the county, city, or city and county in
which his or her duties are performed.
(B) A work permit issued by the commission.
(2) An independent agent is not required to hold a work permit if
he or she is not a resident of this state and has registered with the
division in accordance with regulations.
(b) A work permit shall not be issued by any city, county, or city
and county to any person who would be disqualified from holding a
state gambling license for the reasons specified in paragraphs (1) to
(7), inclusive, of subdivision (a) of Section 19850.
(c) The division may object to the issuance of a work permit by a
city, county, or city and county for any cause deemed reasonable by
the division, and if the division objects to issuance of a work
permit, the work permit shall be denied.
(1) The commission shall adopt regulations specifying particular
grounds for objection to issuance of, or refusal to issue, a work
permit.
(2) The ordinance of any city, county, or city and county relating
to issuance of work permits shall permit the division to object to
the issuance of any permit.
(3) Any person whose application for a work permit has been denied
because of an objection by the division may apply to the commission
for an evidentiary hearing in accordance with regulations.
(d) Application for a work permit for use in any jurisdiction
where a locally issued work permit is not required by the licensing
authority of a city, county, or city and county shall be made to the
division, and may be granted or denied for any cause deemed
reasonable by the commission. If the commission denies the
application, it shall include in its notice of denial a statement of
facts upon which it relied in denying the application.
(e) An order of the commission denying an application for a work
permit, including an order declining to issue a work permit following
review pursuant to paragraph (3) of subdivision (c), may be reviewed
in accordance with subdivision (e) of Section 19858.
(f) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 42. Section 19911A is added to the Business and Professions
Code, to read:
19911A. (a) The commission may issue an order summarily
suspending a person's work permit, whether issued by a city, county,
or city and county, or by the commission, upon a finding that the
suspension is necessary for the immediate preservation of the public
peace, health, safety, or general welfare. The order is effective
when served upon the holder of the permit.
(b) The order of summary suspension shall state facts upon which
the finding of necessity for the suspension is based. For the
purposes of this section, the order of summary suspension shall be
deemed an accusation.
(c) An order of summary suspension
shall be signed by at least three members of the commission.
(d) The person whose work permit is summarily suspended has a
right to a hearing to commence not more than 30 calendar days from
the date of service of the suspension.
(e) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 43. Section 19912A is added to the Business and Professions
Code, to read:
19912A. (a) The commission may revoke a work permit or, if issued
by the licensing authority of a city, county, or city and county,
notify the authority to revoke it, and the licensing authority shall
revoke it, if the commission finds, after a hearing, that a gambling
enterprise employee or independent agent has failed to disclose,
misstated, or otherwise misled the division or the commission with
respect to any fact contained in any application for a work permit,
or if the commission finds that the employee or independent agent,
subsequent to being issued a work permit, has done any of the
following:
(1) Committed, attempted, or conspired to do any acts prohibited
by this chapter.
(2) Engaged in any dishonest, fraudulent, or unfairly deceptive
activities in connection with controlled gambling, or knowingly
possessed or permitted to remain in or upon any premises any cards,
dice, mechanical devices, or any other cheating device.
(3) Concealed or refused to disclose any material fact in any
investigation by the division.
(4) Committed, attempted, or conspired to commit, any embezzlement
or larceny against a gambling licensee or upon the premises of a
gambling establishment.
(5) Been convicted in any jurisdiction of any offense involving or
relating to gambling.
(6) Accepted employment without prior commission approval in a
position for which he or she could be required to be licensed under
this chapter after having been denied a license or after failing to
apply for licensing when requested to do so by the commission.
(7) Been refused the issuance of any license, permit, or approval
to engage in or be involved with gambling or parimutuel wagering in
any jurisdiction, or had the license, permit, or approval revoked or
suspended.
(8) Been prohibited under color of governmental authority from
being present upon the premises of any licensed gambling
establishment or any establishment where parimutuel wagering is
conducted, for any reason relating to improper gambling activities or
any illegal act.
(9) Been convicted of any felony.
(b) The commission shall revoke a work permit if it finds, after
hearing, that the holder thereof would be disqualified from holding a
state gambling license for the reasons specified in paragraph (6) or
(7) of subdivision (a) of Section 19850A.
(c) Nothing in this section shall be construed to limit any powers
of the commission with respect to licensing.
(d) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 44. Section 19913A is added to the Business and Professions
Code, to read:
19913A. (a) The fee for a work permit issued by the commission
shall be not less than twenty-five dollars ($25) or more than two
hundred fifty dollars ($250).
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 45. Section 19915A is added to the Business and Professions
Code, to read:
19915A. (a) It is the policy of the State of California to
require that all establishments wherein controlled gambling is
conducted in this state be operated in a manner suitable to protect
the public health, safety, and general welfare of the residents of
the state. The responsibility for the employment and maintenance of
suitable methods of operation rests with the owner licensee, and
willful or persistent use or toleration of methods of operation
deemed unsuitable by the commission or by local government shall
constitute grounds for license revocation or other disciplinary
action.
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 46. Section 19918A is added to the Business and Professions
Code, to read:
19918A. (a) Each owner licensee shall maintain security controls
over the gambling premises and all operations therein related to
gambling, and those security controls are subject to the approval of
the commission.
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 47. Section 19920A is added to the Business and Professions
Code, to read:
19920A. (a) The division shall make appropriate investigations as
follows:
(1) Determine whether there has been any violation of this chapter
or any regulations adopted thereunder.
(2) Determine any facts, conditions, practices, or matters that it
may deem necessary or proper to aid in the enforcement of this
chapter or any regulation adopted thereunder.
(3) To aid in adopting regulations.
(4) To secure information as a basis for recommending legislation
relating to this chapter.
(b) If, after any investigation, the division is satisfied that a
license, permit, finding of suitability, or approval should be
suspended or revoked, it shall file an accusation with the commission
in accordance with Chapter 5 (commencing with Section 11500) of Part
1 of Division 3 of Title 2 of the Government Code.
(c) In addition to any action that the commission may take against
a license, permit, finding of suitability, or approval, the
commission may also require the payment of fines or penalties.
However, no fine imposed shall exceed twenty thousand dollars
($20,000) for each separate violation of any provision of this
chapter or any regulation adopted thereunder.
(d) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 48. Section 19921A is added to the Business and Professions
Code, to read:
19921A. (a) The commission may issue any emergency orders against
an owner licensee or any person involved in a transaction requiring
prior approval that the division deems reasonably necessary for the
immediate preservation of the public peace, health, safety, or
general welfare.
(b) The emergency order shall set forth the grounds upon which it
is based, including a statement of facts constituting the alleged
emergency necessitating the action.
(c) The emergency order is effective immediately upon issuance and
service upon the owner licensee or any agent of the licensee
registered with the division for receipt of service, or, in cases
involving prior approval, upon issuance and service upon the person
or entity involved, or upon an agent of that person or entity
authorized to accept service of process in this state. The emergency
order may suspend, limit, condition, or take other action in
relation to the license of one or more persons in an operation
without affecting other individual licensees, registrants, or the
licensed gambling establishment. The emergency order remains
effective until further order of the commission or final disposition
of any proceeding conducted pursuant to subdivision (d).
(d) Within two calendar days after issuance of an emergency order,
the division shall file an accusation with the commission against
the person or entity involved. Thereafter, the person or entity
against whom the emergency order has been issued and served is
entitled to a hearing which, if so requested, shall commence within
10 business days of the date of the request if a gambling operation
is closed by the order, and in all other cases, within 30 calendar
days of the date of the request. On application of the division, and
for good cause shown, a court may extend the time within which a
hearing is required to be commenced, upon those terms and conditions
that the court deems equitable.
(e) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 49. Section 19933.5A is added to the Business and Professions
Code, to read:
19933.5A. (a) Except as specified in subdivision (c), this
section applies to any person or business that is engaged in
controlled gambling, whether or not licensed to do so.
(b) Any person or business described in subdivision (a), with
actual knowledge of the requirements of regulations adopted by the
commission pursuant to subdivision (d) of Section 19834A, that
knowingly and willfully fails to comply with the requirements of
those regulations shall be liable for a monetary penalty. The
commission may impose a monetary penalty for each violation.
However, in the first proceeding that is initiated pursuant to this
subdivision, the penalties for all violations shall not exceed a
total sum of ten thousand dollars ($10,000). If a penalty was
imposed in a prior proceeding before the commission or its
predecessor, the California Gambling Control Board, the penalties for
all violations shall not exceed a total sum of twenty-five thousand
dollars ($25,000). If a penalty was imposed in two or more prior
proceedings before the commission or its predecessor, the California
Gambling Control Board, the penalties for all violations shall not
exceed a total sum of one hundred thousand dollars ($100,000).
(c) This section does not apply to any case where the person is
criminally prosecuted in federal or state court for conduct related
to a violation of Section 14162 of the Penal Code.
(d) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 50. Section 19942A is added to the Business and Professions
Code, to read:
19942A. (a) The commission, by regulation, shall establish fees
for special licenses authorizing irregular operation of tables in
excess of the total number of tables otherwise authorized to a
licensed gambling establishment, for tournaments and other special
events.
(b) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 51. Section 19959.5A is added to the Business and Professions
Code, to read:
19959.5A. (a) A member of the commission, the executive secretary
of the commission, the director of the division, and any employee
designated by regulation of the commission or the division for
purposes of this section, shall not, for a period of three years
after leaving office or terminating employment, for compensation, act
as agent or attorney for, or otherwise represent, any other person
by making any formal or informal appearance, or by making any oral or
written communication, before the commission or the division, or any
officer or employee thereof, if the appearance or communication is
for the purpose of influencing administrative action, or influencing
any action or proceeding involving the issuance, amendment, awarding,
or revocation of a permit, license, or approval.
(b) A member of the commission shall not solicit or accept
campaign contributions from any person, including any applicant or
licensee.
(c) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 52. Section 19960.2A is added to the Business and Professions
Code, to read:
19960.2A. (a) A license may be denied, suspended, or revoked if
the applicant or licensee, within three years prior to the submission
of the license or renewal application, or any time thereafter,
violates any law or ordinance with respect to campaign finance
disclosure or contribution limitations applicable to an election that
is conducted pursuant to Section 19950 or pursuant to former Section
19819, as that section read immediately prior to its repeal by the
act that enacted this chapter.
(1) The remedies specified herein are in addition to any other
remedy or penalty provided by law.
(2) Any final determination by the Fair Political Practices
Commission that the applicant did not violate any provision of state
law within its jurisdiction shall be binding on the commission.
(3) Any final determination by a city or county governmental body
having ultimate jurisdiction over the matter that the applicant did
not violate an ordinance with respect to campaign finance disclosure
or contribution limitations applicable to an election conducted
pursuant to Section 19950, or former Section 19819, as that section
read immediately prior to its repeal by the act that enacted this
chapter, shall be binding on the commission.
(b) Every applicant for a gambling license, or any renewal
thereof, shall file with the division, at the time the license
application or renewal is filed, the following information:
(1) Any statement or other document required to be filed with the
Fair Political Practices Commission relative to an election that is
conducted pursuant to Section 19950, or former Section 19819, as that
section read immediately prior to its repeal by the act that enacted
this chapter, within three years of the date on which the
application is submitted.
(2) Any statement or other document required to be filed with any
local jurisdiction respecting campaign finance disclosure or
contribution limitations applicable to an election that is conducted
pursuant to Section 19950, or former Section 19819, as that section
read immediately prior to its repeal by the act that enacted this
chapter, within three years of the date on which the application is
submitted.
(3) A report of any contribution of money or thing of value, in
excess of one hundred dollars ($100), made to any committee, as
defined by Section 82013 of the Government Code, associated with any
election that is conducted pursuant to Section 19950, or former
Section 19819, as that section read immediately prior to its repeal
by the act that enacted this chapter, within three years of the date
on which the application is submitted.
(4) A report of any other significant involvement by the applicant
or licensee in an election that is conducted pursuant to Section
19950, or former Section 19819, as that section read immediately
prior to its repeal by the act that enacted this chapter, within
three years of the date on which the application is submitted.
(c) The commission shall adopt regulations to implement this
section.
(d) This section shall become operative on the occurrence of one
of the events specified in Section 66 of the act that added this
section to the Business and Professions Code.
SEC. 53. Section 1822.60 is added to the Code of Civil Procedure,
to read:
1822.60. A warrant may be issued under the requirements of this
title to authorize personnel of the Division of Gambling Control of
the Department of Justice to conduct inspections as provided in
subdivision (a) of Section 19825 of the Business and Professions
Code.
SEC. 55. Section 15001 of the Government Code is amended to read:
15001. The department is composed of the Office of the Attorney
General, the Division of Law Enforcement, and the Division of
Gambling Control.
SEC. 56. Section 15001.1 is added to the Government Code, to read:
15001.1. The Division of Gambling Control is responsible for
investigation and enforcement of controlled gambling activity in this
state as set forth in the Gambling Control Act (Chapter 5
(commencing with Section 19800) of Division 8 of the Business and
Professions Code).
SEC. 57. Section 15001.2 is added to the Government Code, to read:
15001.2. Any process issued by the Division of Gambling Control
for purposes of implementing and enforcing the Gambling Control Act
(Chapter 5 (commencing with Section 19800) of Division 8 of the
Business and Professions Code) may be issued in the name of the
division. Any hearing conducted by the Attorney General for these
purposes may be styled as conducted before the division.
SEC. 58. Section 186.9 of the Penal Code is amended to read:
186.9. As used in this chapter:
(a) "Conducts" includes, but is not limited to, initiating,
concluding, or participating in conducting, initiating, or concluding
a transaction.
(b) "Financial institution" means, when located or doing business
in this state, any national bank or banking association, state bank
or banking association, commercial bank or trust company organized
under the laws of the United States or any state, any private bank,
industrial savings bank, savings bank or thrift institution, savings
and loan association, or building and loan association organized
under the laws of the United States or any state, any insured
institution as defined in Section 401 of the National Housing Act (12
U.S.C. Sec. 1724(a)), any credit union organized under the laws of
the United States or any state, any national banking association or
corporation acting under Chapter 6 (commencing with Section 601) of
Title 12 of the United States Code, any agency, agent or branch of a
foreign bank, any currency dealer or exchange, any person or business
engaged primarily in the cashing of checks, any person or business
who regularly engages in the issuing, selling, or redeeming of
traveler's checks, money orders, or similar instruments, any broker
or dealer in securities registered or required to be registered with
the Securities and Exchange Commission under the Securities Exchange
Act of 1934 or with the Commissioner of Corporations under Part 3
(commencing with Section 25200) of Division 1 of Title 4 of the
Corporations Code, any licensed transmitter of funds or other person
or business regularly engaged in transmitting funds to a foreign
nation for others, any investment banker or investment company, any
insurer, any dealer in gold, silver, or platinum bullion or coins,
diamonds, emeralds, rubies, or sapphires, any pawnbroker, any
telegraph company, any personal property broker, any person or
business acting as a real property securities dealer within the
meaning of Section 10237 of the Business and Professions Code,
whether licensed to do so or not, any person or business acting
within the meaning and scope of subdivisions (d) and (e) of Section
10131 and Section 10131.1 of the Business and Professions Code,
whether licensed to do so or not, any person or business regularly
engaged in gaming within the meaning and scope of Section 330, any
person or business regularly engaged in pool selling or bookmaking
within the meaning and scope of Section 337a, any person or business
regularly engaged in horseracing whether licensed to do so or not
under the Business and Professions Code, any person or business
engaged in the operation of a gambling ship within the meaning and
scope of Section 11317, any person or business engaged in controlled
gambling within the meaning and scope of subdivision (d) of Section
19805 of the Business and Professions Code, whether registered to do
so or not, and any person or business defined as a "bank," "financial
agency," or "financial institution" by Section 5312 of Title 31 of
the United States Code or Section 103.11 of Title 31 of the Code of
Federal Regulations and any successor provisions thereto.
(c) "Transaction" includes the deposit, withdrawal, transfer,
bailment, loan, pledge, payment, or exchange of currency, or a
monetary instrument, as defined by subdivision (d), or the
electronic, wire, magnetic, or manual transfer of funds between
accounts by, through, or to, a financial institution as defined by
subdivision (b).
(d) "Monetary instrument" means United States currency and coin;
the currency, coin, and foreign bank drafts of any foreign country;
payment warrants issued by the United States, this state, or any
city, county, or city and county of this state or any other political
subdivision thereof; any bank check, cashier's check, traveler's
check, personal check, money order, stock, investment security, or
negotiable instrument in bearer form or otherwise in such form that
title thereto passes upon delivery; gold, silver, or platinum bullion
or coins; and diamonds, emeralds, rubies, or sapphires. Except for
foreign bank drafts and federal, state, county, or city warrants,
"monetary instrument" does not include bank checks, cashier's checks,
traveler's checks, personal checks, or money orders made payable to
the order of a named party which have not been endorsed or which bear
restrictive endorsements, and also does not include personal checks
which have been endorsed by the named party and deposited by the
named party into the named party's account with a financial
institution.
(e) "Criminal activity" means a criminal offense punishable under
the laws of this state by death or imprisonment in the state prison
or from a criminal offense committed in another jurisdiction
punishable under the laws of that jurisdiction by death or
imprisonment for a term exceeding one year.
(f) "Foreign bank draft" means a bank draft or check issued or
made out by a foreign bank, savings and loan, casa de cambio, credit
union, currency dealer or exchanger, check cashing business, money
transmitter, insurance company, investment or private bank, or any
other foreign financial institution that provides similar financial
services, on an account in the name of the foreign bank or foreign
financial institution held at a bank or other financial institution
located in the United States or a territory of the United States.
SEC. 58.5. Section 186.9 of the Penal Code is amended to read:
186.9. As used in this chapter:
(a) "Conducts" includes, but is not limited to, initiating,
concluding, or participating in conducting, initiating, or concluding
a transaction.
(b) "Financial institution" means, when located or doing business
in this state, any national bank or banking association, state bank
or banking association, commercial bank or trust company organized
under the laws of the United States or any state, any private bank,
industrial savings bank, savings bank or thrift institution, savings
and loan association, or building and loan association organized
under the laws of the United States or any state, any insured
institution as defined in Section 401 of the National Housing Act (12
U.S.C. Sec. 1724(a)), any credit union organized under the laws of
the United States or any state, any national banking association or
corporation acting under Chapter 6 (commencing with Section 601) of
Title 12 of the United States Code, any agency, agent or branch of a
foreign bank, any currency dealer or exchange, any person or business
engaged primarily in the cashing of checks, any person or business
who regularly engages in the issuing, selling, or redeeming of
traveler's checks, money orders, or similar instruments, any broker
or dealer in securities registered or required to be registered with
the Securities and Exchange Commission under the Securities Exchange
Act of 1934 or with the Commissioner of Corporations under Part 3
(commencing with Section 25200) of Division 1 of Title 4 of the
Corporations Code, any licensed transmitter of funds or other person
or business regularly engaged in transmitting funds to a foreign
nation for others, any investment banker or investment company, any
insurer, any dealer in gold, silver, or platinum bullion or coins,
diamonds, emeralds, rubies, or sapphires, any pawnbroker, any
telegraph company, any person or business regularly engaged in the
delivery, transmittal, or holding of mail or packages, any person or
business that conducts a transaction involving the transfer of title
to any real property, vehicle, vessel, or aircraft, any personal
property broker, any person or business acting as a real property
securities dealer within the meaning of Section 10237 of the Business
and Professions Code, whether licensed to do so or not, any person
or business acting within the meaning and scope of subdivisions (d)
and (e) of Section 10131 and Section 10131.1 of the Business and
Professions Code, whether licensed to do so or not, any person or
business regularly engaged in gaming within the meaning and scope of
Section 330, any person or business regularly engaged in pool selling
or bookmaking within the meaning and scope of Section 337a, any
person or business regularly engaged in horseracing whether licensed
to do so or not under the Business and Professions Code, any person
or business engaged in the operation of a gambling ship within the
meaning and scope of Section 11317, any person or business engaged in
controlled gambling within the meaning and scope of subdivision (d)
of Section 19805 of the Business and Professions Code, whether
registered to do so or not, and any person or business defined as a
"bank," "financial agency," or "financial institution" by Section
5312 of Title 31 of the United States Code or Section 103.11 of Title
31 of the Code of Federal Regulations and any successor provisions
thereto.
(c) "Transaction" includes the deposit, withdrawal, transfer,
bailment, loan, pledge, payment, or exchange of currency, or a
monetary instrument, as defined by subdivision (d), or the
electronic, wire, magnetic, or manual transfer of funds between
accounts by, through, or to, a financial institution as defined by
subdivision (b).
(d) "Monetary instrument" means United States currency and coin;
the currency, coin, and foreign bank drafts of any foreign country;
payment warrants issued by the United States, this state, or any
city, county, or city and county of this state or any other political
subdivision thereof; any bank check, cashier's check, traveler's
check, or money order; any personal check, stock, investment
security, or negotiable instrument in bearer form or otherwise in a
form in which title thereto passes upon delivery; gold, silver, or
platinum bullion or coins; and diamonds, emeralds, rubies, or
sapphires. Except for foreign bank drafts and federal, state, county,
or city warrants, "monetary instrument" does not include personal
checks made payable to the order of a named party which have not been
endorsed or which bear
restrictive endorsements, and also does not include personal checks
which have been endorsed by the named party and deposited by the
named party into the named party's account with a financial
institution.
(e) "Criminal activity" means a criminal offense punishable under
the laws of this state by death or imprisonment in the state prison
or from a criminal offense committed in another jurisdiction
punishable under the laws of that jurisdiction by death or
imprisonment for a term exceeding one year.
(f) "Foreign bank draft" means a bank draft or check issued or
made out by a foreign bank, savings and loan, casa de cambio, credit
union, currency dealer or exchanger, check cashing business, money
transmitter, insurance company, investment or private bank, or any
other foreign financial institution that provides similar financial
services, on an account in the name of the foreign bank or foreign
financial institution held at a bank or other financial institution
located in the United States or a territory of the United States.
SEC. 59. Section 337j is added to the Penal Code, to read:
337j. (a) It is unlawful for any person, as owner, lessee, or
employee, whether for hire or not, either solely or in conjunction
with others, to do any of the following without having first procured
and thereafter maintained in effect all federal, state, and local
licenses required by law:
(1) To deal, operate, carry on, conduct, maintain, or expose for
play in this state any controlled game.
(2) To receive, directly or indirectly, any compensation or reward
or any percentage or share of the revenue, for keeping, running, or
carrying on any controlled game.
(3) To manufacture, distribute, or repair any gambling equipment
within the boundaries of this state, or to receive, directly or
indirectly, any compensation or reward for the manufacture,
distribution, or repair of any gambling equipment within the
boundaries of this state.
(b) It is unlawful for any person to knowingly permit any
controlled game to be conducted, operated, dealt, or carried on in
any house or building or other premises that he or she owns or
leases, in whole or in part, if that activity is undertaken by a
person who is not licensed as required by state law, or by an
employee of that person.
(c) It is unlawful for any person to knowingly permit any gambling
equipment to be manufactured, stored, or repaired in any house or
building or other premises that the person owns or leases, in whole
or in part, if that activity is undertaken by a person who is not
licensed as required by state law, or by an employee of that person.
(d) Any person who violates, attempts to violate, or conspires to
violate this section shall be punished by imprisonment in a county
jail for not more than one year, or by a fine of not more than five
thousand dollars ($5,000), or by both that imprisonment and fine.
(e) (1) As used in this section, "controlled game" means any game
of chance, including any gambling device, played for currency, check,
credit, or any other thing of value that is not prohibited and made
unlawful by statute or local ordinance.
(2) As used in this section, "controlled game" does not include
any of the following:
(A) The game of bingo conducted pursuant to Section 326.5.
(B) Parimutuel racing on horseraces regulated by the California
Horse Racing Board.
(C) Any lottery game conducted by the California State Lottery.
(D) Games played with cards in private homes or residences, in
which no person makes money for operating the game, except as a
player.
(f) It is unlawful for any person to collect any fee in connection
with a controlled game authorized pursuant to Chapter 5 (commencing
with Section 19800) of Division 8 of the Business and Professions
Code unless the method of fee collection conforms to regulations
adopted by the Division of Gambling Control of the Department of
Justice or the California Gambling Control Commission. Until those
regulations become operative, an owner licensee may continue to
collect fees, in accordance with any of the following provisions:
(1) In the same manner as fees were collected in the establishment
as of January 1, 1997, if the method of fee collection is permitted
by ordinance, resolution, letter, or other written authorization of
the local governmental entity having regulatory jurisdiction or law
enforcement authority over the gambling establishment.
(2) In the same manner as fees were collected in the establishment
as of January 1, 1997, if all of the following are true:
(A) The amount of the fee is fixed in advance of the game.
(B) There is no minimum wager in any game, round, or hand.
(C) No fee is deducted from the amount wagered.
(D) In any game or round, the same fixed fee is collected from all
players at the table.
(E) The method of fee collection has not been challenged by, and
is not prohibited by any ordinance or resolution of, the local
governmental entity having regulatory jurisdiction or law enforcement
authority over the gambling establishment.
(3) Using any method of fee collection that is otherwise
authorized by law.
SEC. 60. Section 14161 of the Penal Code is amended to read:
14161. As used in this title:
(a) "Financial institution" means, when located or doing business
in this state, any national bank or banking association, state bank
or banking association, commercial bank or trust company organized
under the laws of the United States or any state, any private bank,
industrial savings bank, savings bank or thrift institution, savings
and loan association, or building and loan association organized
under the laws of the United States or any state, any insured
institution as defined in Section 401 of the National Housing Act,
any credit union organized under the laws of the United States or any
state, any national banking association or corporation acting under
Chapter 6 (commencing with Section 601) of Title 12 of the United
States Code, any foreign bank, any currency dealer or exchange, any
person or business engaged primarily in the cashing of checks, any
person or business who regularly engages in the issuing, selling, or
redeeming of traveler's checks, money orders, or similar instruments,
any broker or dealer in securities registered or required to be
registered with the Securities and Exchange Commission under the
Securities Exchange Act of 1934, any licensed sender of money, any
investment banker or investment company, any insurance company, any
dealer in coins, precious metals, stones, or jewelry, any pawnbroker,
any telegraph company, any person or business engaged in controlled
gambling within the meaning of subdivision (e) of Section 19805 of
the Business and Professions Code, whether registered or licensed to
do so or not, and any person or business defined as a "bank,"
"financial agency," or "financial institution" by Section 5312 of
Title 31 of the United States Code or Section 103.11 of Title 31 of
the Code of Federal Regulations and any successor provisions thereto.
(b) "Transaction" includes the deposit, withdrawal, transfer,
bailment, loan, payment, or exchange of currency, or a monetary
instrument, as defined by subdivision (c), by, through, or to, a
financial institution, as defined by subdivision (a). "Transaction"
does not include the purchase of gold, silver, or platinum bullion or
coins, or diamonds, emeralds, rubies, or sapphires by a bona fide
dealer therein, and does not include the sale of gold, silver, or
platinum bullion or coins, or diamonds, emeralds, rubies, or
sapphires by a bona fide dealer therein in exchange for other than a
monetary instrument, and does not include the exchange of gold,
silver, or platinum bullion or coins, or diamonds, emeralds, rubies,
or sapphires by a bona fide dealer therein for gold, silver, or
platinum bullion or coins, or diamonds, emeralds, rubies, or
sapphires.
(c) "Monetary instrument" means United States currency and coin;
the currency and coin of any foreign country; and any instrument
defined as a "monetary instrument" by Section 5312 of Title 31 of the
United States Code or Section 103.11 of Title 31 of the Code of
Federal Regulations, or the successor of either. Notwithstanding any
other provision of this subdivision, "monetary instrument" does not
include bank checks, cashier's checks, traveler's checks, personal
checks, or money orders made payable to the order of a named party
that have not been endorsed or that bear restrictive endorsements.
(d) "Department" means the Department of Justice.
(e) "Criminal justice agency" means the Department of Justice and
any district attorney's office, sheriff's department, police
department, or city attorney's office of this state.
(f) "Currency" means United States currency or coin, the currency
or coin of any foreign country, and any legal tender or coin defined
as currency by Section 103.11 of Title 31 of the Code of Federal
Regulations or any succeeding provision.
SEC. 61. Chapter 8 (commencing with Section 4369) is added to Part
3 of Division 4 of the Welfare and Institutions Code, to read:
CHAPTER 8. STATE PROGRAM OF PROBLEM GAMBLING
4369. There is in the department the Office of Compulsive
Gambling.
4369.1. As used in this chapter, the following definitions shall
apply:
(a) "Compulsive gambling" means any problem or pathological
gambling.
(b) "Compulsive gambling prevention programs" means programs
designed to reduce the prevalence of problem and pathological
gambling among California residents.
(c) "Office" means the Office of Compulsive Gambling.
(d) "Pathological gambling" means an impulse control disorder that
meets the diagnostic criteria set forth in the diagnostic and
statistical manual version 4 of the American Psychiatric Association.
(e) "Problem gambling" means patterns of gambling-related behavior
that compromise, disrupt, or damage personal, family, educational,
and vocational pursuits. The term includes pathological and
compulsive gambling.
4369.2. (a) The office shall develop a comprehensive gambling
prevention program for problem and pathological gamblers within the
state. The comprehensive program shall consist of all of the
following:
(1) Prevention and education services to the general public.
(2) A toll-free telephone service for crisis intervention and
referral of compulsive gamblers to compulsive gambling counselors and
self-help groups.
(3) Research into the origin, causes, treatment, and prevalence of
problem gambling and pathological gambling among juveniles and
adults.
(4) Treatment services for problem and pathological gamblers and
their immediate families, including, but not limited to, outpatient
services, intensive outpatient services, after-care services, and
inpatient services to those persons requiring specialized care.
(5) Training of certified, registered, licensed health
professionals in the area of problem and underage gambling.
(b) The office shall make information available as requested by
the Governor and the Legislature with respect to the comprehensive
program.
4369.3. In designing and developing the program, the office shall
do all of the following:
(a) Develop a statewide plan to address the problem of
pathological gambling.
(b) Adopt any regulations necessary to administer the program.
(c) Develop priorities for funding services and develop criteria
for distributing program funds.
(d) Monitor the expenditures of state funds by agencies and
organizations receiving program funding.
(e) Evaluate the effectiveness of services provided through the
program.
(f) Notwithstanding any other provision of law, any contracts
required to meet the requirements of this chapter are exempt from the
requirements contained in the Public Contract Code and the State
Administrative Manual, and are exempt from the approval of the
Department of General Services.
(g) The first and highest priority of the office with respect to
the use of any funds appropriated for the purposes of this chapter
shall be to carry out subdivision (a).
4369.4. All state agencies, including, but not limited to, the
California Horse Racing Board, any agency that is created to regulate
casino gambling or cardrooms within the state, the Department of
Corrections, the California Youth Authority, the State Department of
Health Services, and the State Department of Alcohol and Drug
Programs, but not including the California State Lottery, shall
coordinate with the office to ensure that state programs take into
account, as much as practicable, problem and pathological gamblers.
The office shall also coordinate and work with other entities
involved in gambling and the treatment of problem and pathological
gamblers.
4369.5. This chapter shall not become operative until funds are
appropriated to the Department of Mental Health to carry out this
chapter in legislation enacted subsequent to the act that added this
chapter to the Welfare and Institutions Code, or in the annual Budget
Act.
SEC. 62. (a) For the purposes of this section, "provisional
license" means a license that is either granted by operation of law
pursuant to this section, or is issued by the Director of the
Division of Gambling Control pursuant to this section, and authorizes
the holder to own and operate a gambling establishment, as defined
by the Gambling Control Act (Chapter 5 (commencing with Section
19800) of Division 8 of the Business and Professions Code), as
enacted by this act. The issuance of a provisional license creates
no vested right to the issuance of a state gambling license. A
provisional license is held subject to all terms and conditions under
which a state gambling license is held pursuant to the Gambling
Control Act (Chapter 5 (commencing with Section 19800) of Division 8
of the Business and Professions Code), as enacted by this act.
(b) (1) Every person possessing a valid registration, issued
pursuant to former Chapter 5 (commencing with Section 19800) of
Division 8 of the Business and Professions Code, as it read
immediately prior to its repeal by this act, and which expires as of
January 1, 1998, shall be deemed, as of January 1, 1998, to hold a
provisional license to conduct those activities authorized by the
registration.
(2) (A) Every owner of a gaming club who possesses a valid
registration issued pursuant to former Chapter 5 (commencing with
Section 19800) of Division 8 of the Business and Professions Code, as
it read immediately prior to its repeal by this act, if the license
has expired as of January 1, 1998, shall be deemed to hold a
provisional license to own, manage, or operate all or a part of
another gambling establishment, or of other gambling establishments,
if all of the following conditions are satisfied with respect to the
other gambling establishment or establishments:
(i) The gambling establishment, on January 1, 1998, was owned by a
person holding a provisional license pursuant to this subdivision.
(ii) Acquisition of the ownership interest is completed no later
than June 30, 1998.
(iii) The applicant has deposited all moneys as required pursuant
to Section 19855 of the Business and Professions Code, as enacted by
this act.
(iv) The applicant has deposited with the division a license fee
calculated as the amount specified for the appropriate level of
operation in subdivision (a) of Section 19941 of the Business and
Professions Code, as enacted by this act.
(B) A provisional license granted in respect to a gambling
establishment by operation of subparagraph (A) shall expire on July
30, 1998, unless, on or before that date, the holder of the
provisional license files an application for a gambling license with
respect to that gambling establishment under the Gambling Control Act
(Chapter 5 (commencing with Section 19800) of Division 8 of the
Business and Professions Code), as enacted by this act.
(3) Until a provisional licensee is summoned pursuant to
subdivision (e), no other state gambling license and no key employee
license shall be required in connection with the operation that is
owned, managed, or operated by a person holding a provisional
license. Nothing in this paragraph shall relieve any person who, on
or after the effective date of this act, acquires an ownership
interest in a gambling establishment, from the provisions of Section
19840 of the Business and Professions Code, as enacted by this act.
Upon payment of the fees described in this section, the provisional
license shall be valid until the earlier of the following events:
(A) December 31, 1998.
(B) The granting or denial of an application for a gambling
license.
(c) Until July 1, 1998, the Director of the Division of Gambling
Control may issue a provisional license to any person who submitted a
completed application for registration pursuant to former Chapter 5
(commencing with Section 19800) of Division 8 of the Business and
Professions Code, as it read immediately prior to its repeal by this
act, if all of the following are true:
(1) The director determines that the applicant is not disqualified
based on any of the reasons for which an application for
registration could have been denied or revoked under former Section
19809 or 19810 of the Business and Professions Code as those sections
read immediately prior to repeal by this act.
(2) The applicant has paid all fees required pursuant to Section
19855 of the Business and Professions Code, as enacted by this act,
less any fees paid pursuant to Section 19808 of the Business and
Professions Code, as that section read immediately prior to its
repeal by this act.
(3) The applicant has deposited with the division a license fee
calculated as the amount specified for each level of operation in
subdivision (b) of Section 19941 of the Business and Professions
Code, as enacted by this act.
(d) Every person holding a provisional license pursuant to
subdivision (b), who desires that the provisional license be
converted to a gambling license under the Gambling Control Act
enacted by this act shall, no later than January 31, 1998, deposit
with the Division of Gambling Control a license fee calculated as the
amount specified for the appropriate level of operation in
subdivision (b) of Section 19941 of the Business and Professions
Code, as enacted by this act.
(e) (1) Commencing July 1, 1998, the Division of Gambling Control
shall summon persons holding provisional licenses for the purpose of
applying for gambling licenses under the Gambling Control Act enacted
by this act. Thereafter, except as otherwise provided herein, the
license application process shall proceed as an initial application
for licensure in accordance with the provisions of the Gambling
Control Act, including the advance deposit of fees for investigation
of the application or applications, if any.
(2) The division shall not require an applicant who holds a
provisional license pursuant to subdivision (b) to furnish, in
connection with an application for licensure, information or
documentation that is presently in the possession of the Department
of Justice by virtue of having conducted a prior investigation of the
applicant pursuant to former Chapter 5 (commencing with Section
19800) of Division 8 of the Business and Professions Code, as it read
immediately prior to its repeal by this act.
(f) If an application for a gambling license is granted, and upon
payment of the fees specified in the Gambling Control Act, a gambling
license may be issued to the owner of a gambling enterprise, to
expire not later than 12 months thereafter. If this license is
issued prior to December 31, 1998, the licensee shall be entitled to
a credit, if any, for the fee paid pursuant to subdivision (d).
(g) Notwithstanding subdivision (a) of Section 19847, there shall
be a rebuttable presumption that every natural person who, on
December 31, 1997, holds a valid and unexpired registration issued
pursuant to former Chapter 5 (commencing with Section 19800) of
Division 8 of the Business and Professions Code, as it read
immediately prior to its repeal by this act, is suitable for
licensure pursuant to this act.
(h) If an application for a gambling license is denied, the
applicant shall be entitled to a pro rata refund of the fee paid
pursuant to subdivision (d), and any unused deposit of investigative
fees.
(i) If the Division of Gambling Control does not, prior to
December 31, 1998, summon a person holding a provisional license for
the purpose of applying for a gambling license, the division, upon
request of the holder of the provisional license, and upon payment of
the fees specified in the Gambling Control Act, shall extend the
provisional license until December 31, 1999. Thereafter, the process
described in subdivisions (e), (f), and (g) shall apply in similar
fashion.
(j) No application for a state gambling license may be submitted
to the Division of Gambling Control prior to July 1, 1998. It is the
intent of the Legislature that the division and the Gambling Control
Board shall be fully operative by July 1, 1998.
SEC. 63. All administrative or judicial proceedings that were
initiated pursuant to former Chapter 5 (commencing with Section
19800) of Division 8 of the Business and Professions Code, as it read
immediately prior to its repeal by this act, and that are not
concluded prior to the effective date of this act, shall continue and
shall be governed by those provisions until concluded.
SEC. 64. Sections 19852 and 19852A of the Business and Professions
Code, as enacted by this act, shall not apply in a situation where
the initial or subsequent annual renewal licensure of any gambling
establishment with respect to which, on December 31, 1997, all
persons who were required to be registered pursuant to former Chapter
5 (commencing with Section 19800) of Division 8 of the Business and
Professions Code, as it read immediately prior to its repeal by this
act, possessed a current and valid registration. However, Sections
19852 and 19852A shall apply to any annual renewal licensure under
the Gambling Control Act, if the application therefor includes an
application for expansion, as defined by subdivision (b) of Section
19852 and subdivision (b) of Section 19852A of the Business and
Professions Code, as enacted by this act.
SEC. 65. All unencumbered funds remaining in the special account
in the General Fund established pursuant to former Section 19818 of
the Business and Professions Code, as that section read immediately
prior to its repeal by this act, effective January 1, 1998, shall be
transferred to the Gambling Control Fund created by Section 19940 of
the Business and Professions Code, as enacted by this act.
SEC. 66. Sections 4 to 52, inclusive, of this act shall become
operative on the earlier of the following events:
(1) January 1, 1999.
(2) The date of enactment of a statute appropriating funds for the
funding of the Division of Gambling Control created by Section 15001
of the Government Code and the California Gambling Control
Commission created by Section 19810 of the Business and Professions
Code, as added by Section 4 of this act.
SEC. 66.5. Notwithstanding any other provision of law, the
Division of Gambling Control and the California Gambling Control
Board created by this act have every power conferred by Sections 1 to
3, inclusive, of this act until the Governor, by executive order,
declares that the California Gambling Control Commission is prepared
to assume the responsibilities and exercise the powers conferred by
Sections 4 to 52, inclusive, of this act.
SEC. 67. The California Gambling Control Board and the Department
of Justice shall jointly prepare a written report setting forth the
expenditures of fees and revenue collected pursuant to this act on
and after January 1, 1998. The report shall be submitted to the
Senate Committee on Budget and Fiscal Review, the Assembly Committee
on Budget, and the Joint Legislative Budget Committee on or before
April 1, 1998.
SEC. 68. Section 58.5 of this bill incorporates amendments to
Section 186.9 of the Penal Code proposed by both this bill and
Assembly Bill 195. It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 1998, (2)
each bill amends Section 186.9 of the Penal Code, and (3) this bill
is enacted after Assembly Bill 195, in which case Section 58 of this
bill shall not become operative.
SEC. 69. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution for certain
costs that may be incurred by a local agency or school district
because in that regard 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 XIIIB of the California Constitution.
However, notwithstanding Section 17610 of the Government Code, if
the Commission on State Mandates determines that this act contains
other costs mandated by the state, reimbursement to local agencies
and school districts for those costs shall be made pursuant to Part 7
(commencing with Section 17500) of Division 4 of Title 2 of the
Government Code. If the statewide cost of the claim for
reimbursement does not exceed one million dollars ($1,000,000),
reimbursement shall be made from the State Mandates Claims Fund.
Notwithstanding Section 17580 of the Government Code, unless
otherwise specified, the provisions of this act shall become
operative on the same date that the act takes effect pursuant to the
California Constitution.