BILL NUMBER: AB 1416 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 3, 2000
AMENDED IN SENATE APRIL 25, 2000
AMENDED IN SENATE APRIL 6, 2000
AMENDED IN SENATE MARCH 29, 2000
AMENDED IN SENATE MARCH 23, 2000
AMENDED IN ASSEMBLY MAY 3, 1999
INTRODUCED BY Assembly Member Wesson
(Principal coauthor: Senator Perata)
FEBRUARY 26, 1999
An act to amend Sections 19805, and 19950.2 of, and to add
Sections 19834.7, 19950.3, and 19980 to, the Business and Professions
Code, and to add Section 330.11 to the Penal Code, relating to
gambling establishments, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 1416, as amended, Wesson. Gambling establishments.
(1) Existing law, the Gambling Control Act, provides for the
regulation, oversight, and licensure of gambling establishments, and
the owners and employees thereof, by the California Gambling Control
Commission and the Division of Gambling Control. Existing law
prohibits a list of specified gambling games or any banking or
percentage game played with cards, dice, or any device, for money,
checks, credit, or any representative of value, and provides that any
person who offers for play or participates in these games is guilty
of a misdemeanor and is punishable as specified.
This bill would authorize gambling establishments to operate
controlled games utilizing a player-dealer position, as defined, and
to contract with a 3rd party for the provision of proposition player
services subject to specified conditions and regulatory requirements.
This bill would specify that the rules of a controlled game
utilizing a player-dealer position shall require that the person
occupying this position be at risk only for the amount wagered on
that hand, that the player-dealer position continuously and
systematically rotate among the seated players, and no player be
allowed to dominate the game by occupying this position for more than
2 consecutive hands. The bill would provide that no person or
entity licensed under the act shall conduct, operate, or offer for
play any banked game, as defined, or allow a banked game to be
conducted on the premises of any licensed gambling establishment, and
that neither the house, nor any owner or on-duty employee of a
licensed gambling establishment shall occupy a player-dealer position
in any controlled game or share or participate in the winnings or
profits of any player except with respect to the payment of lawful
table fees.
(2) Existing law generally requires voter approval of an amendment
to a local ordinance that would result in the expansion of gambling,
as defined, but exempts licensed gambling establishments with 5 or
fewer tables from this restriction. Existing law also provides that
until January 1, 2001, no local jurisdiction that had not authorized
legal gaming prior to January 1, 1996, shall do so, and that no
gaming ordinance in effect on that date may be amended to expand
gaming. Existing law extends this moratorium until January 1, 2003,
with respect to the Counties of Alameda, Contra Costa, Los Angeles,
San Mateo, and Santa Clara.
This bill would provide that the above restriction shall apply in
all counties until December 31, 2006 January
1, 2007 , and would additionally provide that until
December 31, 2006 January 1, 2007 , neither the
commission nor the division shall issue a license for a gambling
establishment that was not licensed to operate on December 31, 1999,
unless an application to operate that establishment was on file with
the division prior to September 1, 2000.
(3) Existing law provides that every person who deals, plays,
carries on, opens, or conducts, or who plays or bets at or against
any banking game is guilty of a misdemeanor and is punishable as
specified.
This bill would provide that "banking game" or "banked game," as
used in the above prohibition and in the Gambling Control Act, means
any game in which the gambling establishment, house, or any other
individual or entity acts as a player in the game, with an interest
in its outcome, and covers all bets in the game, collecting from all
losers and paying all winners, as is the practice in casinos located
in the States of Nevada and New Jersey. The bill would specify that
"banking game" or "banked game" does not include a controlled game
that features a player-dealer position as authorized in (1). By
changing the definition of a crime, this bill would impose a
state-mandated local program.
(4) This bill would provide that if any of its provisions, or the
application thereof, are held invalid, that these provisions are
severable from the remainder of the provisions.
(5) This bill would state findings and declarations of the
Legislature, and would also make various technical changes to the act
to implement these provisions, as well as technical, nonsubstantive
changes, as specified. Because this bill would impose new regulatory
requirements, violations of which would be punishable as
misdemeanors, this bill would impose a state-mandated local program.
(6) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
(7) This bill would declare that it is to take effect immediately
as an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares as follows:
(a) In 1983 and 1984 California card clubs played games with cards
involving a player-dealer position in which players were afforded
the temporary opportunity to wager against multiple players at the
table where the player-dealer position continuously and
systematically rotated among the players, prior to the amendment of
Section 19 of Article IV of the California Constitution by the
California State Lottery Act in 1984.
(b) The amendment to Section 19 of Article IV of the Constitution
declared:
"The Legislature has no power to authorize, and shall prohibit
casinos of the type currently operating in Nevada and New Jersey."
Casinos operating in 1983 and 1984 in the States of Nevada and New
Jersey did not include card games featuring a player-dealer position
which continuously and systematically rotates among the players. In
Nevada and New Jersey, comparable games are banked only by the
house, which is a participant in the game, with an interest in its
outcome, and which covers all bets in the game, paying all winners
and collecting from all losers.
(c) In Hotel Employees & Restaurant Employees v. Davis (1999) 21
Cal. 4th 585, the California Supreme Court recently stated at page
605 that:
"...(t)he type" of casino "operating in Nevada and New Jersey"
presumably refers to a gambling facility that did not legally operate
in California; something other, that is, than "the type" of casino
"operating" in California."
SEC. 2. Section 19805 of the Business and Professions Code is
amended to read:
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, a key employee license, a
registration, a finding of suitability, a work permit, a manufacturer'
s or distributor's license, or an approval of any act or transaction
for which the approval or authorization of the commission or division
is required or permitted under this chapter.
(c) "Banking game" or "banked game," as used in this chapter and
in Section 330 of the Penal Code, means any game in which the
gambling establishment, house, or any other individual or entity acts
as a player in the game, with an interest in its outcome, and covers
all bets in the game, collecting from all losers and paying all
winners, as is the practice in casinos located in the States of
Nevada and New Jersey. "Banking game" or "banked game" does not
include a controlled game that features a player-dealer position as
authorized in Section 19834.7.
(d) "Board" means the California Gambling Control Board.
(e) "Commission" means the California Gambling Control Commission.
(f) "Controlled gambling" means to deal, operate, carry on,
conduct, maintain, or expose for play any controlled game.
(g) "Controlled game" means any controlled game, as defined by
subdivision (e) of Section 337j of the Penal Code.
(h) "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.
(i) "Division" means the Division of Gambling Control in the
Department of Justice.
(j) "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.
(k) "Game" and "gambling game" means any controlled game.
(l) "Gambling" means to deal, operate, carry on, conduct,
maintain, or expose for play any controlled game.
(m) "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.
(n) "Gambling establishment," "establishment," or "licensed
premises" means one or more rooms where any controlled gambling or
activity directly related thereto occurs.
(o) "Gambling license" or "state gambling license" means any
license issued by the state that authorizes the person named therein
to conduct a gambling operation.
(p) "Gambling operation" means exposing for play one or more
controlled games that are dealt, operated, carried on, conducted, or
maintained for commercial gain.
(q) "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, except as provided by regulation.
(r) "House" means the gambling establishment, and any owner,
shareholder, partner, key employee, or landlord thereof.
(s) "Independent agent," except as provided by regulation, means
any person who does either of the following:
(1) 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.
(t) "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 other persons as the
board may determine for reasons consistent with the policies of this
chapter.
(u) "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.
(v) "Key employee license" means a state license authorizing the
holder to be associated with a gambling enterprise as a key employee.
(w) "Licensed gambling establishment" means the gambling premises
encompassed by a state gambling license.
(x) "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.
(y) "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.
(z) "Owner licensee" means an owner of a gambling enterprise who
holds a state gambling license.
(aa) "Person," unless otherwise indicated, includes a natural
person, corporation, partnership, limited partnership, trust, joint
venture, association, or any other business organization.
(ab) "Player" means a patron of a gambling establishment who
participates in a controlled game.
(ac) "Player-dealer" and "controlled game featuring a
player-dealer position" refer to a position in a controlled game, as
defined by the approved rules for that game, in which players are
afforded the temporary opportunity to wager against multiple players
at the same table, provided that this position is continuously and
systematically rotated among the seated players in the game. As used
in this subdivision, "continuously and systematically rotated" means
that one player may not hold the player-dealer position for more
than two consecutive hands.
(ad) "Publicly traded racing association" means a corporation
licensed to conduct horse racing and simulcast wagering pursuant to
Chapter 4 (commencing with Section 19400) whose stock is publicly
traded.
(ae) "Qualified racing association" means a corporation licensed
to conduct horse racing 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.
(af) "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.
SEC. 3. Section 19834.7 is added to the Business and Professions
Code, to read:
19834.7. (a) It is the intent of the Legislature that this
section shall be dispositive of the law regarding the operation of
controlled games featuring a player-dealer position in licensed
gambling establishments in California.
(b) No person or entity licensed pursuant to this chapter shall
conduct, operate, or offer any banked game, or allow such a game to
be conducted on the premises of any licensed gambling establishment.
(c) (1) A banked game is any wagering game where the house or
gambling establishment is a participant in the game, with an interest
in the outcome of any wager, and covers all bets made in the game,
paying all winners and collecting from all losers.
(2) With respect to licensed gambling establishments only, a game
is not a banked game merely because the rules of the game allow a
player, who does not represent the interest of the house, to occupy
the position of player-dealer, provided that this position is
continuously and systematically rotated among seated players, that
the person occupying the player-dealer position is only at risk for
the amount wagered on that hand, and that no player is allowed to
dominate the game by occupying the player-dealer position for more
than two consecutive hands. This section shall not be construed to
allow the house to bank any game.
(d) It shall be a violation of this chapter for the house or any
owner or employee of a licensed gambling establishment to deal, carry
on, or open or cause to be opened, any banked game played for money,
checks, credit, or other representative of value.
(e) Neither the commission nor the division shall authorize the
play of any controlled game featuring a player-dealer position if the
rules of that game would: (1) allow a player to participate in that
game in a manner that would not comply with minimal player-dealer
rotation requirements and allow that player to dominate the game by
occupying the player-dealer position for more than two consecutive
hands, or (2) if the rules of that game do not require the
player-dealer position to continuously and systematically rotate
among the seated players who wish to occupy that position.
(f) An owner or employee of a licensed gambling establishment may
deal, carry on, or open or cause to be opened at the gambling
establishment an authorized controlled game featuring a player-dealer
position, provided that the game is operated in compliance with
subdivision (e). It shall be a violation of this chapter for the
house or any owner or on-duty employee of a licensed gambling
establishment to act as the player-dealer in any game, or to share or
participate in the winnings or profits of any player participating
in the play of that game, except with respect to the payment of a
lawful table fee.
SEC. 4. Section 19950.2 of the Business and Professions Code is
amended to read:
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 operative only until
December 31, 2006 January 1, 2007 , and as of
that date is repealed.
SEC. 5. Section 19950.3 is added to the Business and Professions
Code, to read:
19950.3. (a) In addition to any other limitations on the
expansion of gambling imposed by Section 19950.2 or any provision of
this chapter, neither the commission nor the division shall issue a
gambling license for a gambling establishment that was licensed to
operate on December 31, 1999, unless an application to operate that
establishment was on file with the division prior to September 1,
2000.
(b) This section shall remain in effect only until
December 31, 2006 January 1, 2007 , and as of
that date is repealed, unless a later enacted statute, that is
enacted before December 31, 2006 January 1,
2007 , deletes or extends that date.
SEC. 6. Section 19980 is added to the Business and Professions
Code, to read:
19980. Notwithstanding any other provision of law, a licensed
gambling establishment may contract with a third party for the
purpose of providing proposition player services, subject to the
following conditions:
(a) Any agreement, contract, or arrangement between a gambling
establishment and a third-party provider of proposition player
services shall be approved in advance by the division, and in no
event shall a gambling establishment or the house have any interest,
whether direct or indirect, in funds wagered, lost, or won by any
proposition player.
(b) The commission, may establish reasonable criteria for, and
require the licensure and registration of, any person or entity that
provides proposition player services to gambling establishments
pursuant to this section, including owners, supervisors, and players.
The commission may impose licensing requirements, disclosures,
approvals, conditions, or limitations as it deems necessary to
protect the integrity of controlled gambling in this state, and may
assess and collect reasonable fees and deposits as necessary to
defray the costs of providing this regulation and oversight.
(c) The division, pursuant to regulations of the commission, is
empowered to perform background checks, financial audits, and other
investigatory services as needed to assist the commission in
regulating third party providers of proposition player services, and
may assess and collect reasonable fees and deposits as necessary to
defray the costs of providing this regulation and oversight.
(d) No agreement or contract between a licensed gambling
establishment and a third party concerning the provision of
proposition player services shall be invalidated or prohibited by the
division pursuant to subdivision (a) until the commission
establishes criteria for, and makes determinations regarding the
licensure or registration of, the provision of these services
pursuant to subdivision (b).
SEC. 7. Section 330.11 is added to the Penal Code, to read:
330.11. "Banking game," as used in Section 330, means any game in
which the gambling establishment, house, or any other individual or
entity acts as a player in the game, with an interest in its outcome,
and covers all bets in the game, collecting from all losers and
paying all winners, as is the practice in casinos located in the
States of Nevada and New Jersey. "Banking game" does not include a
controlled game that features a player-dealer position as authorized
in Section 19834.7 of the Business and Professions Code.
SEC. 8. The provisions of this act are severable. If any
provision of this act, or the application thereof, is held invalid,
that invalidity shall not affect other provisions or applications
that can be given effect without the invalid provision or
application.
SEC. 9. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.
SEC. 10. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order to reduce confusion and to ensure at the earliest
possible time that gambling establishments are able to operate within
the law with respect to controlled games featuring a player dealer
position, to provide the California Gambling Control Commmission and
Division of Gambling Control with necessary regulatory guidelines and
enforcement powers, and to impose reasonable limits on the further
expansion of gambling, it is necessary that this act take effect
immediately.