BILL ANALYSIS �
AB 156
Page 1
ASSEMBLY THIRD READING
AB 156 (Lara)
As Amended March 14, 2011
Majority vote
GOVERNMENTAL ORGANIZATION 17-0 APPROPRIATIONS 17-0
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|Ayes:|Hall, Nestande, Atkins, |Ayes:|Fuentes, Harkey, |
| |Block, Blumenfield, | |Blumenfield, Bradford, |
| |Chesbro, Cook, Galgiani, | |Charles Calderon, Campos, |
| |Garrick, Gatto, Hill, | |Davis, Donnelly, Gatto, |
| |Jeffries, Ma, Perea, V. | |Hall, Hill, Lara, |
| |Manuel P�rez, Silva, | |Mitchell, Nielsen, Smyth, |
| |Torres | |Solorio, Wagner |
| | | | |
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SUMMARY : Amends the Gambling Control Act (Act) by adding a
"hold harmless" provision if a controlled game is later deemed
unlawful, as specified, and permits a closing date of less than
90 days, for a contract approved by the California Gambling
Control Commission (CGCC) for sale or lease of a real or
personal property, as defined, if requested by the parties to
the contract. Specifically, this bill :
1)Provides that a gambling establishment that conducts play of a
controlled game that has been approved by the Department of
Justice (DOJ), but is later found to be unlawful, has an
absolute defense to any criminal, administrative, or civil
action provided the game was being played in the manner
approved and, during the time for which it was approved, and
play ceases upon notice that the game has been found unlawful.
2)Permits a contract for the sale or lease of real or personal
property, subject to the limitations described above, to
specify a closing date earlier than 90 days after the
submission of the contract to the CGCC if the CGCC has
approved the contract and the parties have requested it.
EXISTING LAW :
1)Provides, pursuant to the Act, the licensure of certain
individuals and gambling establishments involved in various
AB 156
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gambling activities, and for the regulation of those
activities, by the CGCC.
2)Provides for the enforcement of those activities by the Bureau
of Gambling Control (Bureau) within DOJ.
3)Limits the transfer of property if the transferee has to be
approved or licensed by the CGCC, and specifically prohibits a
contract for sale or lease of real or personal property that
requires approval of CGCC, as specified, from specifying a
closing date earlier than 90 days after the submission of the
contract to the CGCC, as specified.
4)Requires CGCC to approve the play of any controlled game,
including, but not limited to, placing restrictions and
limitations on how a controlled game is played.
5)Provides that a banking game does not include a controlled
game if the published rules of the game feature a
player-dealer position and provide that this position must be
continuously and systematically rotated amongst each of the
participants during the play of the game, and if other
specified conditions are met.
6)Defines "house" to mean the gambling enterprise, and any
owner, shareholder, partner, key employee, or
landlord thereof.
7)Defines "gambling enterprise" to mean a natural person or an
entity, whether individual, corporate, or otherwise, that
conducts a gambling operation and that by virtue thereof is
required to hold a state gambling license under the Act.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, no significant costs associated with this
legislation.
COMMENTS : According to the bill's sponsor, Commerce Club
Casino, this bill will provide that if a card club is playing a
controlled game approved by the Bureau in the manner in which it
was approved, the approval by the Bureau shall be an absolute
defense to any action that is brought through the criminal
courts, administrative courts, or civil courts if the game being
played is later ruled to be deemed unlawful.
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In at least one situation, a game approved by Bureau was
subsequently found to be unlawful by the Court of Appeal. The
Attorney General then brought administrative action against
numerous card clubs for playing a game which they had approved.
This bill seeks to insulate a club from criminal, civil and
administrative action if a game that has been approved by the
Bureau and is played in the manner in which it was approved.
A second provision of this bill will give the CGCC the authority
to allow the sale of a gambling establishment to occur prior to
90 days expiring from the time that the contract is first
submitted to CGCC for approval. This provision was placed in
the Act to give CGCC staff the time to approve a purchase and
sale agreement. However, once the agreement is approved nothing
is served by delaying the closing transaction.
The sponsor states, there may be situations where the affected
parties want a particular transaction to close sooner rather
than later. This change will give the CGCC the authority, after
they have approved a purchase/sale agreement to allow that
transaction to take place prior to expiration of 90 days,
provided the CGCC has, in fact, approved the purchase/sale.
Similar language vetoed last year . SB 1125 (Florez) of 2009,
was vetoed by Governor Schwarzenegger. SB 1125 (Florez)
contained two provisions, one of which is in this bill. SB 1125
contained the same "absolute defense" language which stated that
a gambling establishment that conducts play of an approved
controlled game that is subsequently found to be unlawful shall
be protected from any criminal, administrative, or civil action,
provided the game was played in an approved manner and was not
played after it was found to be illegal.
The veto message stated in part . "This past legislative
session, my Administration sponsored several bills to address
the issue of tort reform. Similar to this measure, one of these
measures provided for limited immunity for businesses
that engaged in conduct that was approved by a federal or state
agency. However, even this modest reform contained a provision
that prevented an absolute defense if the business in question
intentionally misrepresented material information or defrauded
the public entity that gave its approval.
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"I am unable to sign this bill because, unlike the measure
previously mentioned, this bill does not take into account
possible misconduct by a gambling establishment that may have
induced the Bureau to erroneously approve a controlled game. In
addition, there may be other instances where a gambling
establishment may be playing a controlled game in bad faith and
in violation of other provisions of existing law.
Notwithstanding the fact that the Bureau may have approved such
conduct, that approval alone should not constitute an absolute
defense to all civil, criminal, or administration actions."
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531
FN: 0000761