BILL ANALYSIS
AB 1924
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1924 (Jeffries)
As Amended June 30, 2008
Majority vote
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|ASSEMBLY: |78-0 |(April 21, |SENATE: |39-0 |(July 2, 2008) |
| | |2008) | | | |
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Original Committee Reference: G.O.
SUMMARY : Provides with respect to bingo games conducted by the
Lake Elsinore Elks Lodge only an increase in the amount of bingo
proceeds that may be used for rental and overhead, to 20% of the
proceeds before the deduction for prizes, or $3,000 per month,
whichever is less, as specified.
The Senate amendments :
1)Provide that for the purposes of bingo games conducted by the
Lake Elsinore Elks Lodge, a portion of the proceeds, not to
exceed 20% of the proceeds before the deduction for prizes, or
$3,000 per month, whichever is less, may be used for the
rental of property and for overhead, including the purchase of
bingo equipment, administrative expenses, security equipment,
and security personnel.
2)Provide that any amount of the proceeds that is in addition to
that currently allowed, up to $1,000, shall be used for the
purpose of financing the rebuilding of the facility and the
replacement of equipment, which was destroyed by fire in 2007.
3)Provide that these provisions are to remain in effect only
until the cost of rebuilding the facility is repaid, or
January 1, 2019, whichever occurs first.
AS PASSED BY THE ASSEMBLY , this bill raised the limit on the
portion of proceeds from charitable bingo that may be
used for the rental of property and for overhead, including the
purchase of bingo equipment, administrative expenses, security
equipment, and security personnel from $2,000 per month
to $3,000 per month.
FISCAL EFFECT : Unknown
AB 1924
Page 2
COMMENTS : This bill was substantially amended in the Senate as
now the bill only applies to bingo games conducted by the Lake
Elsinore Elks Lodge only.
Currently, non-profit organizations in California may host bingo
games and raffles. Charities must register with the Attorney
General's Registry of Charitable Trusts prior to conducting a
raffle, and report afterwards. Charities operating bingo games
must comply with local ordinances regulating days, locations,
and hours of operation. Local governments may charge a
licensing fee for bingo games.
AB 1216 (Harvey), Chapter 394, Statutes of 1993, raised the
portion of proceeds from bingo games to be used for the monthly
rental of property and specified overhead costs, from 20% or
$1,000 whichever is less, to 20% or $2,000 whichever is less.
Supporters stated the $1,000 limit on administrative expenses,
which was last raised in 1981, was no longer sufficient to cover
bingo-operating costs. Charities stated an increase was needed
because it has become necessary for nonprofits to hire security
due to the increase in armed robberies at bingo games.
Due to fewer dollars available to charitable organizations from
the state, the trend has been toward larger games conducted in
bingo parlors. These games are commercialized, and held usually
in custom designed facilities on a seven-day a week basis,
raising and handling large sums of money.
Purpose of the bill : According to the author's office, this
bill is a district bill intended to help the Lake Elsinore Elks
Lodge to rebuild its facility that recently burned down in a
fire. According to a representative from the Elks, the
reconstruction will cost $1.4 million. The Elks insurance
policy covers $750,000 of the costs, and they have received some
donations and are applying for a $100,000 grant from the county.
Lake Elsinore Elks Lodge offers bingo one night a week and
would like to utilize a greater percentage of its bingo proceeds
(provided it is within the 20% limitation) to help offset the
reconstruction costs or help pay off any loans. Depending upon
how the bingo operation is structured, the Elks Lodge may be
able to benefit directly from its own bingo operation and
utilize a greater percentage of its bingo proceeds to help pay
for the reconstruction or pay off any loans.
AB 1924
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Background : In 1976, California voters approved Proposition 9,
an amendment to the Constitution specifying, "The Legislature by
statute may authorize cities and counties to provide for bingo
games, but only for charitable purposes." The Legislature
implemented this constitutional provision by enacting Penal Code
Section 326.5. The statute authorizes the playing of bingo
where the games are conducted by a specified tax-exempt
organization for charitable purposes pursuant to local
ordinance. In general, these ordinances specify limitations of
days, locations, and hours of operations of bingo games. Local
governments have the responsibility to regulate and enforce
their ordinances.
Arguments in opposition : The California Coalition Against
Gambling Expansion (CAGE) argues, in pertinent part, that "while
overtly intended to support the charitable ends of nonprofits,
this bill will actually be yet another windfall to the growing,
bingo parlors and casino vendors that substantially profit from
this gambling enterprise covered in "charitable bingo" veneer.
This measure would raise the ante to these profiteers and likely
continue to expand this growing gambling sector."
Stand Up For California (SUFC) argues, "Third parties have
staked out a cottage industry, by offering to host games for
charities, providing locations, equipment, security and
management. Who are these entrepreneurs? "While AB 1924 may
seem innocuous providing a change to increase the portion of
gross proceeds that may be used for the rental of property and
for specified overhead it has the potential to create a
significant unintentional impact resulting in the expansion of
an unregulated gaming industry.
Prior legislation : AB 839 (Torrico), Chapter 707, Statutes of
2006, provides statutory authority for specified nonprofit
organizations to conduct described fundraisers using controlled
games (i.e., poker nights).
SB 639 (McPherson), Chapter 778, Statutes of 2000, was enabling
legislation to implement SCA 4 (McPherson), Resolution Chapter
123, Statutes of 1999, permitting the legalization and
regulation of charitable raffles as described in California.
SCA 4 became Proposition 17 of 2000, which was enacted by the
electorate and amended the State Constitution to permit the
Legislature to authorize private, nonprofit, eligible
AB 1924
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organizations to conduct raffles as funding mechanisms to
support their own or other private, nonprofit beneficial and
charitable works.
SB 1810 (Davis), Chapter 445, Statutes of 1998, required all
individuals involved in charitable fundraising, to register with
the Attorney General to provide sufficient information to
identify and contact any entity engaged in possible illicit
activity as specified.
SB 8 (Lockyer), Chapter 867, Statutes of 1997, repealed and
re-enacted The Gambling Control Act providing for the regulation
of non-Indian gambling in California.
AB 1216 (Harvey), Chapter 394, Statutes of 1993, raised the
portion of proceeds from bingo games presently allowed to be
used for the monthly rental of property and specified overhead
costs, from 20% or $1,000 whichever is less, to 20% or $2,000
whichever is less. This amount is taken before the deduction of
prizes.
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531
FN: 0005858