BILL ANALYSIS �
Bill No: SB
340
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2011-2012 Regular Session
Bill Analysis
SB 340 Author: Wolk
Amended: April 14, 2011
Hearing Date: April 26, 2011
Consultant: Paul Donahue
SUBJECT : Remote caller bingo
SUMMARY : Streamlines the regulatory scheme governing
remote caller bingo.
Existing law :
1) Declares in Section 19(c) of Article IV of the
California Constitution that the Legislature may enact
statutes authorizing cities and counties to provide for
bingo games, but only for charitable purposes.
2) Authorizes cities and counties to permit eligible
nonprofit organizations to conduct bingo games and remote
caller bingo games for charitable purposes pursuant to an
ordinance<1> that allows those games to be conducted in
accordance with specified requirements.
3) Prohibits an organization from conducting remote caller
bingo more than 2 days per week, and forbids more than 750
players from participating in a remote caller bingo game at
a single location.
4) Requires an organization authorized to conduct remote
caller bingo games to give at least 30 days' advance
written notice of its intent to conduct a remote caller
bingo game.
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<1> Existing law contains a model ordinance for cities and
counties to use when authorizing remote caller bingo.
�Penal Code � 326.3 (c)(1)]
SB 340 (Wolk) continued
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5) Requires the California Gambling Control Commission
(Commission) to regulate remote caller bingo, including
licensure and operations.
6) Requires any person who conducts a remote caller bingo
game, and any person who manufactures or otherwise provides
equipment for use in the playing of a remote caller bingo
game to be licensed.
7) Requires the Commission to approve in advance all
equipment used for remote caller bingo, to monitor
operation of the transmission and other equipment used for
remote caller bingo, and to monitor the game itself.
8) Requires the Commission to submit a report to the
Legislature, on or before January 1, 2012, on the
fundraising effectiveness and regulation of remote caller
bingo.
This bill :
1) Permits remote caller bingo games in cities and counties
that have adopted an ordinance allowing bingo games to be
conducted, if the city or county opts to permit remote
caller bingo under that ordinance by resolution.
2) Allows a licensed organization to conduct one extra
remote caller bingo game per quarter in addition to the
current 2 days per week authorization.
3) Deletes the limit on the number of players that may
participate in a remote caller bingo game in a single
location, and would delete the requirement for advance
written notice of intent to conduct a remote caller bingo
game.
4) Deletes the licensing requirement for persons conducting
remote caller bingo games.
5) Authorizes DOJ or the Commission to audit the books and
records of a licensed organization or vendor of equipment
used in a remote caller bingo game at any time.
6) Specifies that an organization licensed by a city or
county to conduct remote caller bingo games shall transmit
a copy of its bingo license to the Department of Justice
SB 340 (Wolk) continued
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(DOJ) instead of the Commission.
7) Continues to require the Commission to approve in
advance all equipment used for remote caller bingo, but
requires the DOJ to monitor operation of the transmission
and other equipment used for remote caller bingo, and to
monitor the game.
8) Authorizes the DOJ to charge a $100 annual registration
fee, which will be deposited into the Gambling Control Fund
to cover DOJ's actual costs to administer and enforce the
program.
9) Enacts changes relating to the requirements for
co-sponsoring remote caller bingo games, and simplifies
other procedures and requirements applicable to the conduct
of remote caller bingo games.
10) Makes technical and conforming changes relating to the
duties of DOJ and to the model ordinance.
COMMENTS :
1) Historical background : A 1976 ballot measure authorized
California charities and nonprofits to operate conventional
paper bingo games for charitable purposes. But in recent
years, traditional bingo offered by the Catholic Church,
Elks lodges, American Legion halls and other charities has
struggled to compete against the expanding and flourishing
tribal casinos. To regain lost participation and income,
charitable organizations began offering bingo play using
electronic bingo machines.
Despite opinions of the Attorney General concluding that
electronic bingo is illegal under long-standing state law,
electronic bingo machines began to proliferate throughout
the state. Indian gaming interests warned that the
machines violated "exclusivity" agreements on electronic
gaming devices, for which they had agreed to pay the state
hundreds of millions of dollars a year. Unless the state
acted, tribes threatened to suspend those payments. The
Gambling Control Commission began seizing electronic bingo
machines until a federal court enjoined this practice
pending further litigation.
Against this backdrop, Governor Schwarzenegger signed SB
SB 340 (Wolk) continued
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1369 (Cedillo) in 2008. This compromise legislation
expressly prohibits electronic bingo machines other than
those in Indian casinos or federal military installations,
but it also authorizes simulcast or "remote caller" bingo
for charities and nonprofits.
2) Remote caller bingo : In remote caller bingo, the
organization conducting the bingo game uses audio and video
technology to link any of its facilities for the purpose of
transmitting the remote "calling" of a live bingo game from
a single location to multiple locations owned, leased or
rented by that organization. Recent legislation eliminated
a $250 prize limit that had existed for more than 30 years.
Remote caller bingo games can offer payouts equal to 37
percent of gross revenues, but at least 43 percent of
revenues must go to the sponsoring charity or nonprofit,
with no more than 20 percent of receipts spent on overhead.
3) Purpose of this bill : Although the 2008 legislation was
clearly intended to freely allow remote caller bingo events
for charitable organizations, the author and supporters of
this bill contend that the existing regulatory process is
too cumbersome and inefficient for many charities.
According to the author and supporters, this bill is
designed to streamline the process and make it easier for
the charities to participate, while still maintaining an
oversight process that ensures legitimacy by bringing in
supervision by DOJ and local law enforcement. In support
of the bill, the author further emphasizes:
-- Charities still need to be organized for more than three
years, which assists in eliminating organizations from
being formed just to play bingo.
-- It streamlines paperwork for both the charities and the
regulators while maintaining the integrity of the game.
-- The bill maintains and strengthens local control over
bingo.
-- This bill establishes a charity registration system at
DOJ that is similar to other charitable fundraising
activities, such as raffles and casino nights which
function under the Charitable Trust Division of DOJ.
SB 340 (Wolk) continued
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-- This bill retains licensure of equipment and vendors at
the Gambling Control Commission, which has the expertise
and experience in this area.
-- This bill maintains the highest statutory charity
proceeds in the country at a 43% return of their locations'
gross receipts.
-- Charitable bingo is one of the oldest forms of
fundraising, and in these tough economic times we need to
make it simpler to meet the needs of these charities that
serve our communities.
4) Bureaucratic delay : The legislation authorizing remote
caller bingo has been on the books since January 2009.
Authorization of remote caller bingo was intended to
respond to concerns raised by charitable organizations that
other provisions in the bill that outlawed electronic bingo
machines would decimate charitable fundraising
opportunities. But since the authorizing statutes passed,
only one remote caller bingo game has been conducted under
the "new" law. For the most part, the delay is
attributable to bureaucratic inertia and a lack of
coordination among local and state regulators.
At the outset, charitable organizations complained that
cities and counties were slow to adopt the enabling
ordinances. In response, the charitable organizations
sponsored legislation to enact a permissive model remote
caller bingo ordinance in statute.<2> In addition, the
model ordinance itself has been criticized because it
called for charitable organizations to obtain a certificate
from the Franchise Tax Board proving they are in fact
tax-exempt organizations. The organizations state that
this a difficult and time consuming process.
5) Supporters : Supporters say that the current law requires
charities to follow complicated bureaucratic guidelines,
which stunt the ability of qualified honorable charities to
easily provide fundraising games in their communities. The
current process requires excessive paperwork and a lengthy
period of review for qualification. Simply put, it is too
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<2> To date there are only 22 local jurisdictions which
have adopted remote caller bingo ordinances, but 13
additional cities or counties are in the process of
finalizing remote caller bingo ordinances.
SB 340 (Wolk) continued
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overwhelming for charities to navigate. Supporters argue
that the spirit of the remote caller bingo law was to
enable charities to utilize an easy method of fundraising
to help their organizations provide essential services.
6) Opposition : The California Coalition Against Gambling
Expansion writes that, before policymakers vote for more
bills to expand existing forms or authorize new types of
gambling activities, they ought to consider the social,
economic, and moral impact that more legalized gambling
will have on our state and its citizenry. Specifically,
they are troubled by the provisions in this bill that would
allow for limitless numbers of persons participating in a
bingo game at a single location via remote call-in, the
deletion of the advance written notice of such activities,
transfer of oversight of remote caller bingo from the
Gambling Control Commission to the Department of Justice,
and the continued erosion of the primary purpose of
legalized bingo, i.e., its charitable fundraising.
7) Related legislation :
SB 1090 (Cedillo 2010) allows charitable organizations to
conduct remote caller bingo games up to 2 days per week,
instead of 1 day per week. Amended the model local
ordinance to provide additional flexibility for local
agencies to verify the tax-exempt status of organizations
applying for a license to conduct bingo games. (Stats.
2010, ch. 514)
SB 126 (Cedillo, 2009) enacted a model local ordinance for
use by local government agencies to sanction remote caller
bingo in the city or county jurisdiction, and specified
that an organization may be authorized to offer remote
caller bingo not more than 2 times per week. (Stats. 2009,
ch. 562)
SB 1369 (Cedillo, 2008) banned the use of electronic bingo
machines, but authorized the play of remote caller bingo up
to one time per week in jurisdictions that have a remote
caller bingo ordinance, and created a mitigation fund to
minimize the impacts to the charities that previously
operated electronic bingo machines. (Stats. 2008, ch. 748)
SUPPORT:
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American Legion, Department of California
AMVETS, Department of California
Bingo Innovations
Calexico Chamber of Commerce
California Association of Nonprofits
Knights of Columbus, Council No. 11137
Knights of Columbus, Grass Valley Council, No. 1875
Our Lady of Lourdes Catholic community, Tujunga, CA
St. Rose of Lima Catholic Church, Simi Valley, CA
Vietnam Veterans of America, California State Council
OPPOSE:
California Coalition Against Gambling Expansion
FISCAL COMMITTEE: Yes
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