BILL ANALYSIS
Bill No: AB
2596
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
AB 2596 Author: Portantino
As Amended: June 17, 2010
Hearing Date: June 29, 2010
Consultant: Art Terzakis
SUBJECT
Gambling: license
DESCRIPTION
AB 2596 makes the following substantive changes to the
Gambling Control Act relative to license renewal and
payment of annual fees:
1. Provides that the California Gambling Control
Commission (CGCC) may extend an owner's license for up to
180 days if it falls behind in processing renewal
applications and makes it explicit that a gambling
license shall be renewed bieiennially.
2. Authorizes the CGCC to assess reasonable late penalties
in order to expedite the processing of a renewal
application that is not filed in a timely manner.
3. Authorizes the CGCC to assess a late penalty of up to
three times the renewal fee for late applications.
4. Adds a new provision to the Act that allows the CGCC to
close a gambling establishment for up to 90 days if an
owner licensee fails to make timely payment of annual
fees.
EXISTING LAW
Article IV, section 19, subdivision (e) of the California
Constitution prohibits casinos of the type currently
operating in Nevada and New Jersey. Those casinos commonly
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offer their patrons a broad spectrum of gaming and
house-banked games.
The Gambling Control Act of 1997 established the CGCC.
Among other responsibilities, the Act grants the CGCC
licensing jurisdiction over the operation of card clubs and
of all persons having an interest in the operation of card
clubs. The Bureau of Gambling Control has the task of
investigating and enforcing controlled gambling activities
in California.
Existing law provides that licenses renewed on or before
July 31, 2008, shall be for the renewal period in effect at
the time of the renewal but shall not expire any sooner
than 15 months after the approval of the renewal
application, and that licenses renewed on or after August
1, 2008, shall expire 24 months after the date of the
approval of the renewal application or after the expiration
of the prior license, whichever is later, as described.
Existing law requires that an application for renewal of a
license application be filed with the commission no later
than 120 days prior to expiration of the current license.
Existing law requires the CGCC to act upon any application
for renewal prior to the date of expiration of the current
license and, upon renewal of any owner license, the
commission shall issue an appropriate renewal certificate
or validating device or sticker.
Existing law provides that 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.
Under existing law, if an owner licensee fails to renew the
gambling license, the CGCC may order the immediate closure
of the premises and a cessation of all gambling activity
therein until the license is renewed.
Existing law provides that the CGCC may deem an applicant
suitable to hold a state gambling license even if the
applicant has a financial interest in another business
conducting lawful gambling in California, or another
business conducting lawful gambling outside of California
that would violate California law if conducted within the
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state.
Existing law stipulates that an application for a license
or a determination of suitability shall be accompanied by
the deposit of a sum of money that will be adequate to pay
the anticipated costs and charges incurred in the
investigation and processing of the application, as
specified. An applicant may be required to deposit any
additional sums as are required to pay final costs and
charges of the investigation.
BACKGROUND
Purpose of AB 2596: According to the author's office,
under existing law, the CGCC and Bureau of Gambling Control
do not have the authority to assess late penalties on those
who file their applications for renewal of their gambling
licenses late. This has become a significant problem, so
much so that the CGCC recently held a hearing to discuss
remedies which could be assessed for those who file their
applications late. During this hearing, it was suggested
that the CGCC assess late penalties on those who file their
applications in a tardy fashion. The CGCC responded that
they do not have the legal authority to assess late
penalties on those who file their applications for renewal
late. According to the author's office, this measure has
been introduced to provide the CGCC with an alternative
sanction for those who do not file for the renewal of their
gambling licenses in a timely fashion.
PRIOR/RELATED LEGISLATION
SB 1125 (Florez) 2009-10 Session. Authorizes the CGCC to
establish and charge additional fees to applicants for
gaming licenses who wish to have their applications
processed and background investigations conducted in an
expedited manner. (Pending in Assembly policy committee)
AB 2627 (Mendoza) 2007-08 Session. Would have made
numerous, mostly technical, modifications to the Gambling
Control Act to provide for streamlined licensing and
enforcement enhancements. (Vetoed)
SB 1697 (Florez) 2007-2008 Session . Among other things,
would have allowed CGCC to consider applications to
activate expired gambling licenses. (Died in Assembly
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G.O.)
SB 730 (Florez) Chapter 438, Statutes of 2007. Provided
for a number of changes to the licensing renewal process
for gambling clubs under the Gambling Control Act in an
effort to streamline the process and eliminate some of the
current requirements.
AB 1973 (Bermudez) Chapter 854, Statutes of 2006 . Among
other things, extended the moratorium on the expansion of
gambling from January 1, 2010, to January 1, 2015.
SB 1198 (Florez) Chapter 181, Statutes of 2006 . Deleted
"wagering limits" from the list of items that are
considered expansion of gambling pursuant to the moratorium
on the expansion of existing gaming in a locality.
SB 814 (Vincent) Chapter 799, Statutes of 2003 . Authorized
CGCC to renew gambling licenses for a period of up to 2
years. Specified that for any license issued for more than
one year the licensee shall continue to pay the annual
gambling license fee. Also, extended the moratorium on the
expansion of gambling from January 1, 2007 to January 1,
2010.
SB 952 (Governmental Organization Committee) Chapter 945,
Statutes of 2001. Made numerous changes pertaining to the
CGCC and the duties of the Division of Gambling Control.
SB 8 (Lockyer) Chapter 867, Statutes of 1997 . Repealed the
Gaming Regulation Act, and instead enacted the Gambling
Control Act, which provided for DOJ to investigate and
enforce controlled gambling in the state. It also
established CGCC to regulate gambling in this state to
issue, suspend, or revoke gambling licenses.
SB 100 (Maddy) Chapter 387, Statutes of 1995. Established
the original moratorium on card room expansion, prohibiting
the creation of new card rooms until January 1, 2001.
SUPPORT: As of June 25, 2010:
Commerce Club
Hollywood Park Casino
Village Club
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OPPOSE: None on file as of June 25, 2010
FISCAL COMMITTEE: Senate Appropriations Committee