BILL ANALYSIS
SB 213
Page 1
Date of Hearing: July 8, 2009
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Joe Coto, Chairman
SB 213 (Florez) - As Amended: June 18, 2009
SENATE VOTE : 32-3
SUBJECT : Gambling: licenses
SUMMARY : Extends the moratorium on the issuance of new
gambling licenses for card rooms from January 1, 2015 to January
1, 2020, and makes other related changes regarding the
regulation of gambling. Specifically, this bill :
1) Prohibits a governing body of electors representing a
city, county, or city and county from authorizing or
expanding any legal gaming beyond those licenses that were
permitted on January 1, 1996, and, extends the sunset date
from January 1, 2015 to January 1, 2020 [Business and
Professions Code Section 19962].
2) Limits the California Gambling Control Commission (CGCC)
from issuing a gambling license for a card room that was
not licensed to operate on December 31, 1999, unless an
application to operate that establishment was on file with
the Department of Justice (DOJ) before September 1, 2000,
and, extends the sunset date from January 1, 2015 to
January 1, 2020 [Business and Professions Code Section
19963].
EXISTING LAW
1) Establishes the Gambling Control Act (Act) and provides
for the licensure of certain individuals and establishments
involved in various gambling activities, and for the
regulation of those activities, by the CGCC.
2) Provides for the enforcement of those activities by DOJ.
3) Provides that any violation of the Act for which a
penalty is not provided is punishable as a misdemeanor.
4) Prohibits, until January 1, 2015 the governing body and
the electors of a county, city, or city and county from
SB 213
Page 2
authorizing or expanding any legal gaming beyond that
permitted on January 1, 1996.
5) Prohibits the CGCC, until January 1, 2015, from issuing
a gambling establishment that was not licensed to operate
on December 31, 1999, except as specified.
FISCAL EFFECT : Unknown
COMMENTS :
Background . The Gambling Control Act of 1998 (Act) was
established to provide a comprehensive scheme for statewide
regulation of legal gambling. Among several things, the Act
provided that no new gambling establishment may be opened in a
city, county, or city and county, in which a gambling
establishment was not operating on and before January 1, 1984,
except upon the affirmative vote of the electors of that local
jurisdiction. Local jurisdictions may adopt a gambling
ordinance governing items such as the hours of operation of
gambling at those premises, patron security, location of
premises, wagering limits and the number of tables permitted in
those premises and in the jurisdiction as a whole.
There are currently two statutory moratoriums that restrict the
growth of controlled gambling in California. One moratorium
prohibits the state from issuing licenses for new gambling
establishments. The other limits the amount that controlled
gambling can expand in local jurisdictions to no more than 24.99
percent compared to the amount that was authorized on January 1,
1999. Most local jurisdictions have modified their gambling
ordinances to realize the maximum amount of growth authorized by
law.
According to sources who broadly support this bill, they say
that "California has had a longstanding policy against the
proliferation of gambling establishments." They went further by
saying "Since 1995, California has discouraged and precluded
additional cities and counties from adopting ordinances
providing for the expansion of gambling. The Governor adopted
an executive order discouraging casinos in the urban area.
SB 213
Page 3
"Dormant" licenses are those that have been surrendered,
withdrawn, or were temporary and have not been renewed.
However, those licenses are still eligible to be reactivated
pending regulations by the California Gambling Control
Commission.
In Support . The Cities for Self Reliance Joint Powers
Authority, in support of this bill, say some cities receive over
80% of their total revenue from their card club, providing
programs and services essential to [their] community.
Also in support, Hawaiian Gardens Casino say that extending the
sunset date to 2020 "will give city governments like Hawaiian
Gardens and other cities that are highly dependent on revenue
from licensed card rooms sufficient advance warning if their
city revenues are to be jeopardized." A recent Los Angeles
Times Article applauded the Hawaiian Gardens City Council for
using the proceeds from the Hawaiian Gardens Casino for funding
summer school for four schools that serve students who live in
this city.
In Opposition . In opposition, Sutter's Place Inc., doing
business as Bay 101 Casino, says that "extending the moratorium
an additional five years, from 2015 to 2020, this bill would
prohibit any additional growth of existing card rooms."
Sutter's Place Inc. also maintains that if they did not have the
"ability to grow over the next eleven years, normal overhead
costs would increase to a point where many small and mid-size
card rooms would be forced out of business."
Taking no position . The California Gambling Control Commission
says they are taking "No Position" on this bill based on the
language contained in this bill, as amended June 18, 2009.
Policy concerns . Will extending the sunset to this policy
result in good competition among small and medium-sized card
rooms and their large-sized counterparts?
What is the effect of those dormant licenses that would be
impacted by this extension of the sunset moratorium? Will this
have an indirect impact that could result in a monopoly of
larger card rooms in urban areas?
SB 213
Page 4
Will card rooms be forced to move to other jurisdictions if
local ordinances are located in areas where the rope extended to
card rooms are not as long as other jurisdictions?
REGISTERED SUPPORT / OPPOSITION :
Support
California Cities for Self-Reliance Joint Powers Authority
California Gaming Association
Commerce Club
Hawaiian Gardens Casino
Hollywood Park Casino
Lucky Chances Casino
Lucky Lady
Village Club
Opposition
Sutter's Place Inc. (aka Bay 101 Casino)
Analysis Prepared by : Rod Brewer / G. O. / (916) 319-2531