BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 340 (Wolk)
Hearing Date: 5/23/2011 Amended: 5/12/2011
Consultant: Maureen Ortiz Policy Vote: GO 12-0
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BILL SUMMARY: SB 340, an urgency measure, transfers
jurisdiction of remote caller bingo from the California Gambling
Control Commission (CGCC) to the Department of Justice (DOJ).
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Admin cost (CGCC) (Savings) ($104) ($104)
($104) Special*
Admin expenses (DOJ) $75 $75
$75
---Potentially offset by fee revenue--- Special*
*California Bingo Fund
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STAFF COMMENTS:
SB 340 will move the Remote Caller Bingo program from the CGCC
to the Department of Justice. Instead of being licensed by the
CGCC, organizations would register annually with the Department
of Justice (DOJ). The bill outlines the administrative
procedures required by DOJ including developing regulations,
providing a registration form, and maintaining a registry on its
Web site, and authorizes DOJ to charge a fee of $100 to cover
all costs. The fee may be adjusted as needed to ensure that
revenues will fully offset the actual costs. Most of these same
charities already register with the DOJ under the Registry of
Charitable Trusts, therefore the application form already
exists. DOJ anticipates the need for one PY (AGPA) for
administrative work associated with the nonprofit organizations
that newly register.
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Since the inception of the Remote Caller Bingo program in FY
2008-09, the California Gambling Control Commission's start-up,
operating and personnel costs have totaled $340,000, with
offsetting revenue of only $5,000 per year. Nearly all of its
costs have been funded from a loan from the Gambling Control
Fund on January 1, 2009 which was to be repaid as soon as there
was sufficient money in the California Bingo Fund, but no later
than five years after the date of the loan. SB 340 will delete
the requirement that the loan be repaid within 5 years - still
requiring repayment, but eliminating the designated timeframe.
As of June 30, 2011, the commission will no longer have funding
or limited-term positions for support of this program.
SB 340 further authorizes local governments to amend their
ordinance to allow charities that are already conducting bingo
games to participate in remote caller bingo and requires cities
and counties that choose to permit remote caller bingo to
monitor the game. Organizations will be required to provide the
local entity with at least 10 days' advance written notice of
its intent to conduct a remote caller bingo game.
Current law 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
that allows those games to be conducted in accordance with
specified requirements.
Current law, enacted by SB 1369 (Cedillo), Chapter 748, Statutes
of 2008, and updated by SB 126 (Cedillo), Chapter 562, Statutes
of 2009, requires charities to be organized for 3 years before
operating remote caller bingo and prohibits the charity from
organizing for the sole purpose of conducting bingo games.
Current law authorizes nonprofit organizations to conduct remote
caller bingo 2 times per week and SB 340 allows the operation of
one extra game per quarter. An existing provision that forbids
more than 750 players from participating in a remote caller
bingo game at a single location is eliminated in SB 340.
To ensure continuity of remote caller bingo games, SB 340
authorizes local agencies to recognize a state license, work
permit, or approval of equipment that was issued by the
California Gambling Control Commission and effective on June 30,
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2011, until June 1, 2012. If a local entity decides to
recognize a state-issued license, work permit, or equipment
approval, it will be responsible for regulatory oversight and
enforcement in accordance with the standards and procedures
pursuant to local ordinance.
Since the implementation of remote caller bingo, few charities
have conducted the game. While it had been anticipated that
thousands of charities would apply for licensure under the CGCC,
only about 32 actually did apply and very few complied with the
licensing requirements to establish remote caller bingo games.
The existing model ordinance provided to cities and counties
requires the charity to get a tax exempt certification from the
FTB, however the complicated process requires excessive
paperwork and a lengthy period of review and the fundraising
efforts of charities have suffered.
In 1976, through enactment of Proposition 9, California
charities and nonprofit organizations were authorized to operate
conventional paper bingo games for charitable purposes. After
the onset of legalized Indian Gaming and enhancements to the
California State Lottery, charities fundraising efforts through
the play of bingo began to subside. To regain lost
participation and income, charitable organizations began
offering bingo play using electronic bingo machines. However,
during 2007-08 it was acknowledged that the use of electronic
bingo games violated exclusivity clauses contained in Indian
Gaming compacts and the games were ceased. In 2008, SB 1369 was
enacted to allow the play of remote caller bingo in an effort to
help nonprofit organizations continue their fundraising efforts.
However, the existing regulatory process has proven to be
cumbersome and inefficient for many charities, therefore, remote
caller bingo has not proven to be a viable option. SB 340 will
streamline the regulatory process while still maintaining
oversight by the Department of Justice and local law enforcement
agencies.
Remote caller bingo is played through the use of audio and video
technology to link any number of 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. Remote caller bingo games can offer
payouts equal to 37 percent of gross revenues, but at least 43
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percent of revenues must go to the sponsoring charity or
nonprofit, with no more than 20 percent of receipts spent on
overhead.