BILL ANALYSIS
AB 2241
Page 1
Date of Hearing: May 5, 2010
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Joe Coto, Chair
AB 2241 (Coto) - As Introduced: February 18, 2010
SUBJECT : Gambling Control Act: administration
SUMMARY : Requires a majority of the appointed members of the
California Gambling Control Commission (CGCC) to establish a
quorum. Specifically, this bill :
1)Requires a majority of the appointed members of the CGCC
constitutes a quorum of the commission.
2)Requires the concurring vote of a majority of those
commissioners present at a meeting of the CGCC constituting a
quorum shall be required for any official action of the CGCC
or for the exercise of any of their duties, powers, or
functions.
EXISTING LAW :
1)Establishes the Gambling Control Act and provides for the
CGCC, which consists of five members appointed by the
Governor, subject to confirmation by the Senate.
2)Establishes a majority of the commission members of the CGCC
is a quorum and the concurring vote of three members is
required for any official action.
FISCAL EFFECT : This bill is keyed non-fiscal.
COMMENTS : Author says that the CGCC, currently, has three
members. In order for business of the CGCC to occur, all three
members must agree in order for them to take action. This bill
intends to ensure that the business of the CGCC is carried out,
as long as the concurring vote of a majority of those members is
present at a meeting.
In short, a majority vote count of any count would be final and
binding for the CGCC. This bill is modeled after Business &
Professions Code Section 18605 which sets forth quorum
requirements for the California State Athletic Commission, which
currently holds six (6) members. The quorum requirement for the
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ten-member (10) State Board of Architectural Examiners, for
instance, is six (6); however, five (5) members can take action
if less than ten members are present.
Another example for a similar model, as proposed under this
bill, exists within the State Board of Registration for
Professional Engineers and Land Surveyors. It has thirteen (13)
members and seven (7) constitute a quorum. However, as long as
a quorum is established at a meeting, a majority of the members
present - but no less than five (5) - can take action.
Background . The Gambling Control Act was established in 1998 as
a two-phased statewide regulatory framework for gaming in
California. Phase I established the California Gambling Control
Board (board) granted them with the power to approve, deny,
revoke, condition, or suspend gambling licenses and permits, for
any reasonable cause. In 1999, Phase II abolished the board and
established the CGCC with jurisdictions over the operation of
and supervision over gambling establishments (cardrooms) in the
state. As a result, all of the powers, duties and
responsibilities of the board were transferred from the board to
the CGCC and the Division of Gambling Control (division),
leaving the division with only the investigatory and monitoring
functions. The transfer of duties and responsibilities from the
board to the CGCC were made possible through the Governor's
Executive Order D-29-01, which was declared on March 8, 2001
under then-Governor Gray Davis.
The division is now known as the Bureau of Gambling Control
(bureau) within the Department of Justice and it continues to
perform as the state's law enforcement entity responsible for
the conducting criminal background investigations for the CGCC
on gambling license and work permit applications received by the
CGCC.
The CGCC acts as the regulatory body over gambling
establishments, including all persons or things connected to the
operations of those gambling establishments, proposition
players, and tribal casinos, pursuant to the CGCC's authority
under the Tribal-State Gaming Compacts.
The CGCC is responsible for setting policy, establishing
regulations, conducting audits, making determinations of
suitability for gaming employees and other individuals and
entities, issuing licenses, acting as the administrator of
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gaming revenues deposited into the Indian Gaming Special
Distribution Fund (SDF) and the trustee over the revenues
deposited into the Indian Gaming Revenue Sharing Trust Fund
(RSTF), and administering the provisions of the Gambling Control
Act and the Tribal-State Gaming Compacts.
Policy consideration . The CGCC membership administration
procedures were established under existing law to avoid
perceived notions of political influence and corruption being
carried out by the cardrooms. Although the Gambling Control Act
requires the CGCC to seat five members, all pending business can
be administered as long as there are three members present and
in full consent. This bill, as currently drafted, would allow
the business of the CGCC to be moved as long as there is a
quorum of one, two, or three members present. This bill could
raise perceptions into the efficacy of the decisions being
rendered at the CGCC.
The author and the committee may wish to consider amending this
bill to properly reflect the membership administration policies
being practiced at the California State Athletic Commission, the
State Board of Architectural Examiners, and the State Board of
Registration for Professional Engineers and Land Surveyors. For
example, the intent language could say, "For purposes of this
Act and for the purposes of the five-member CGCC, a majority of
the members must be present to take action, but, in instances
where only three members are present a majority vote would only
be needed to take action on CGCC business."
Prior legislation :
AB 176 (Silva, Chapter 88, Statutes of 2009). Makes changes to
the terms used to describe recording technology to implement the
recommendations of the California Law Revision Commission. As it
relates to the Gambling Control Act, the bill makes technical,
non-substantive changes to Sections 19861 and 19870 of the
Business and Professions Code to eliminate antiquated references
to "videotapes", "tapes" and "audiotapes" used at Commission
meetings and changes these terms to reflect current technology
("video", "recordings", and "audio" recordings).
AB 293 (Mendoza, Chapter 233, Statutes of 2009). Makes numerous
technical and substantive regulatory changes to the Gambling
Control Act, as it relates to cardrooms. The more significant
provisions are as follows: (1) officially recognizes limited
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liability companies in the Gambling Control Act; (2) requires
the Commission to develop licensing regulations to allow
continuous operation of a cardroom under certain circumstances;
(3) clarifies that the Commission can take disciplinary action
against an individual owner without affecting the licenses of
other endorsed owners; (4) adds a definition of "gambling
enterprise"; (5) permits individuals under age 21 to use a
designated pathway to pass through the gaming floor if
accompanied by, or in the presence of, an individual over age
21; and (6) makes numerous other technical and regulatory
changes.
SB 289 (Vincent, Chapter 294, Statutes of 2007). Allows the
CGCC to approve or renew a State gambling establishment
(cardroom) license even if the applicants or licensees hold
limited financial interest in an out-of-state gambling business
that conducts lawful gambling that would otherwise be illegal in
California. The bill authorizes licenses to be approved for
individuals that own up to 1 percent interest in out-of-state
gambling businesses.
SB 730 (Florez, Chapter 438, Statutes of 2007). Restructures
the CGCC's gambling establishment (cardroom) licensing process
under the Gambling Control Act. Specifically, this bill (1)
implements a new individual key employee license program, (2)
requires gambling licenses to renewed for a period of 24 months
from the date of approval, (3) allows the Commission to set
license renewal application fees by regulation, with a cap of
$1200 per two-year period, (4) allows gambling chips to be used
at tables for food and beverage purchases, and (5) requires the
Bureau of Gambling Control within the Department of Justice
(Division) to establish a schedule of charges for background
investigations that differentiate between an initial and renewal
license application.
AB 1620 (Klehs, Chapter 721, Statutes of 2006). Increases
annual table fees paid by gambling establishments (cardrooms)
into the Gambling Control Fund, pursuant to a sliding scale
based on the number of gaming tables or gross revenues,
whichever is higher.
AB 1973 (Bermudez, Chapter 854, Statutes of 2006). Defines
"hours of operation" as the period during which a gambling
establishment (cardroom) is open within a 24-hour period, and
changes the requirements for individuals eligible for
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appointment to the Commission. The bill also requires each
gambling establishment to pay an additional $100 for each table
to the Department of Drug and Alcohol Programs for deposit in
the Gambling Addiction Program Fund, to benefit those who have a
gambling addiction problem. In addition, the bill extends the
moratorium on gambling expansion from January 1, 2010 to January
1, 2015.
AB 3068 (Horton, Chapter 868, Statutes of 2006). Authorizes
the Commission to exempt specified limited partners in limited
partnerships from the gambling establishment (cardroom)
licensure requirements under the Gambling Control Act. The
exemption is available only to a cardroom located on the grounds
of a racetrack, as specified.
SB 1198 (Florez, Chapter 181, Statutes of 2006). Allows local
jurisdictions that permit legalized gambling in gambling
establishments (cardrooms) to authorize "no limit" wagers in
their local gambling ordinances. Specifically, the bill removes
wagering limits from the definition of "expansion of gambling"
in the Gambling Control Act and exempts wagering limits from the
moratorium on gambling expansion. The bill also removes the
requirement that increases in wagering limits be approved by
local voters.
SB 8 (Lockyer, Chapter 867, Statutes of 1997). Repeals the
Gaming Regulation Act, and instead enacts the Gambling Control
Act, which provides for the Division of Gambling Control in the
Department of Justice to investigate and enforce controlled
gambling in the state. It also established the California
Gambling Control Commission to regulate gambling in this state
to issue, suspend, or revoke gambling licenses, as specified.
REGISTERED SUPPORT / OPPOSITION :
Support
Hawaiian Gardens Casino
Opposition
None on file
Analysis Prepared by : Rod Brewer / G. O. / (916) 319-2531