BILL ANALYSIS
Bill No: AB
813
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
AB 813 Author: Hall
As Amended: May 5, 2009
Hearing Date: July 8, 2009
Consultant: Chris Lindstrom
SUBJECT
Gambling Control Act: administration.
DESCRIPTION
AB 813 limits the times that the Department of Justice
(DOJ) may perform routine audits at controlled gambling
establishments to the normal business hours, between 8 a.m.
to 6 p.m. within a five-day work week. AB 813 provides
that the limitation on the times that a routine audit may
be performed shall not be construed to take away from DOJ's
investigatory authority and duties.
EXISTING LAW
Existing law, the Gambling Control Act, provides for the
licensure and regulation of various legalized gambling
activities and establishments by California Gambling
Control Commission (CGCC) and the enforcement of those
activities by DOJ.
Existing law provides DOJ with all powers necessary and
proper to enable it to carry out fully and effectually the
duties and responsibilities of DOJ specified in the
Gambling Control Act.
Existing law provides that DOJ may take any of the
following actions:
AB 813 (Hall) continued
Page 2
1)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 the Gambling Control Act.
2)Visit, inspect, and examine all premises where gambling
equipment is manufactured, sold, or distributed.
3)Inspect all equipment and supplies in any gambling
establishment or in any premises where gambling equipment
is manufactured, sold, or distributed.
4)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.
5)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.
BACKGROUND
Purpose of the bill. According to the sponsor, "this bill
seeks to make a change in the Gambling Control Act to allow
card clubs with the ability to have themselves subject to
random inspections during the hours and days when the
operating manager is on site."
Supporters of the bill described incidents where DOJ
inspectors conducted late night audits where the inspectors
requested the on-site shift manager to provide them with
receipts, payroll data and other related records. That
manager, then, had to contact the main operating manager,
who has access to the requested information, to avoid being
charged with a misdemeanor, pay a fine, or both. According
to this bill's sponsor, the language referring to the
inspection and copying of gaming operation papers, books,
and records is basically the same as language contained in
the 1999 Tribal-State Gaming Compacts.
Background. Prior to 1998, California's gambling industry
was essentially unregulated. In 1984, the Legislature
enacted the Gaming Registration Act, which required the
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Attorney General's office to provide uniform, minimum
regulation of California's cardrooms. However, the scope
of the Attorney General's authority was extremely limited
and funding was inadequate - it was basically a
registration program. Recognizing the need for broader
oversight of California's gambling industry, the
Legislature enacted the Gambling Control Act (Chapter 867,
Statutes of 1997). The Act created a comprehensive scheme
for statewide regulation of legal gambling.
The provisions of the Act are administered through a
bifurcated system. The Bureau of Gambling Control within
DOJ was created to enforce the provisions of the Gambling
Control Act which includes, among other things, the
authority to 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. In addition, the Act
created a five-member, Governor-appointed California
Gambling Control Commission to establish minimum regulatory
standards for the gambling industry and to ensure that
state gambling licenses are not issued to or held by
unsuitable or unqualified individuals.
Tribal-State Gaming Compacts (compacts). The provision of
the compacts related to onsite audits and inspection of
records provides, "Inspection and copying of Gaming
Operation papers, books, and records may occur at any time,
immediately after notice to the Tribal Gaming Agency,
during the normal hours of the Gaming Facility's business
office, provided that the inspection and copying of those
papers, books or records shall not interfere with the
normal functioning of the Gaming Operation or Facility."
PRIOR/RELATED LEGISLATION
AB 2431 (Governmental Organization Committee), Chapter 738,
Statutes of 2002 . Renumbers various sections and article
headings within the Gambling Control Act, eliminates
outdated references, resolves conflicting provisions, and
makes other technical and clarifying changes.
SB 8 (Lockyer), Chapter 867, Statutes of 1997 . Repealed
the Gaming Regulation Act, and instead enacted the Gambling
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Control Act, which provided for DOJ to investigate and
enforce controlled gambling in the state. It also
establishes CGCC to regulate gambling in this state to
issue, suspend, or revoke gambling licenses.
SUPPORT: As of July 6, 2009:
Lucky Chances Casino
Lucky Derby
Village Club
OPPOSE: None on file as of July 6, 2009.
FISCAL COMMITTEE: Senate Appropriations Committee
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