BILL ANALYSIS �
Bill No: SB
383
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2011-2012 Regular Session
Bill Analysis
SB 383 Author: Wolk
Amended: January 4, 2012
Hearing Date: January 10, 2012
Consultant: Paul Donahue
SUBJECT : Remote caller bingo
SUMMARY : Restructures the regulatory scheme governing
remote caller bingo.
Existing law :
1) Authorizes the Legislature to enact statutes enabling
cities and counties to authorize bingo games for charitable
purposes. �Cal. Const. Article IV, � 19(c)]
2) Authorizes a city or county to adopt an ordinance<1>
allowing eligible nonprofit organizations to conduct bingo
games and remote caller bingo games for charitable purposes
under specific conditions.
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.
5) Requires the California Gambling Control Commission
(Commission) to regulate remote caller bingo, including
-------------------------
<1> Existing law also provides a model ordinance for cities
and counties to use in authorizing remote caller bingo.
�Penal Code � 326.3 (c)(1)]
SB 383 (Wolk) continued
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licensure and operations.
6) Requires licensure of 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.
7) Requires the Commission to approve in advance all
equipment used for remote caller bingo, and to monitor
operation of the transmission and other equipment used for
remote caller bingo.
This bill :
1) Allows a city or county to amend an existing local
ordinance that allows bingo games to be conducted within
that jurisdiction to permit the conduct of remote caller
bingo games pursuant to that ordinance.
2) Includes charitable organizations affiliated with a
community college district among the organizations eligible
to conduct remote caller bingo.
3) Prohibits an organization from conducting remote caller
bingo more than 2 days a week, but allows an organization
to conduct one additional game in each calendar quarter if
it so chooses.
4) Requires an organization authorized to conduct remote
caller bingo games to provide at least 10 days' advance
written notice of intent to conduct a remote caller bingo
game on a form prescribed by the city, county, or city and
county, and to provide notice within 24 hours if the
location of the remote caller bingo game changes.
5) Eliminates state licensure requirements for the conduct
of remote caller bingo, and instead requires an
organization that is eligible to conduct remote caller
bingo games to register annually with the Department of
Justice (DOJ).
6) Requires DOJ to maintain a registry on its Internet
website of all organizations registered to conduct remote
caller bingo, and charge an annual registration fee of $100
SB 383 (Wolk) continued
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to cover DOJ's actual costs of administration and
enforcement.
7) Requires an organization licensed to conduct remote
caller bingo, or a management company with whom the
licensed organization contracts, to register all of its
local bingo licenses with DOJ. The bill authorizes DOJ to
charge a fee to cover the cost of the registration
requirement and would require that registration information
be made available to the public upon request.
8) Makes additional technical and conforming changes
relating to the duties of DOJ and the Gambling Control
Commission (Commission), including outlining procedures for
a city or county as the local licensing entity, to obtain a
background check from DOJ.
9) Deletes a requirement that the Commission approve all
equipment used for remote caller bingo in advance, but
would require the city, county, or city and county to
monitor operation of the transmission and other equipment
used for remote caller bingo and to monitor the game.
10) Authorizes DOJ to audit the books and records of a
licensed organization or a management company contracted by
a licensed organization to conduct remote caller bingo at
any time, and would require audit information to be
publicly available.
11) Requires a management company to retain an independent
CPA to conduct an annual audit of its books and records,
and would subject a management company to a civil penalty
for filing false information with DOJ.
12) Specifies that the live, physical calling and broadcast
of a remote caller bingo game shall only be conducted from
a jurisdiction that has adopted an ordinance authorizing
remote caller bingo games within the jurisdiction.
13) Deletes a requirement that a loan to the Commission
from the Gambling Control Fund be repaid within 5 years,
although it does not extinguish the repayment obligation.
14) Makes additional changes relating to the requirements
for cosponsoring remote caller bingo games, and would
simplify other procedures and requirements applicable to
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the conduct of remote caller bingo games. Additionally,
the bill repeals provisions relating to bingo card-minding
devices and related duties of the Commission.
15) Repeals the model remote caller bingo ordinance set
forth in existing law.
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
millions of dollars a year. Unless the state acted, tribes
threatened to suspend those payments. The Commission began
seizing electronic bingo machines until a federal court
enjoined this practice pending further litigation.
2) Remote caller bingo : In 2008, SB 1369 (Cedillo),
Chapter 748, was enacted to allow the play of remote caller
bingo in an effort to help nonprofit organizations continue
their fundraising efforts. In remote caller bingo, the
organization conducting the bingo game uses audio and video
technology to link any of its facilities in order to
transmit 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 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 : According to the author and
supporters, this bill will streamline the regulatory
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process and make it easier for the charities to participate
in remote caller bingo activities, while maintaining an
oversight process that involves state and local
authorities.
4) Program fiscal condition : Since the inception of the
Remote Caller Bingo program in FY 2008-09, the Commission's
start-up, operating and personnel costs totaled $340,000,
with offsetting revenue of only $5,000 per year. Costs of
the program were paid for by 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. This bill deletes the requirement that the loan be
repaid within 5 years, but does not extinguish the loan
repayment obligation.
5) Commission unilaterally halts administration of program :
As of June 30, 2011, the Commission announced that it no
longer has monetary or personnel support for this program,
and has notified affected organizations that it "has
terminated its administration of the program." The
Commission is no longer acting upon applications to
participate in the program. Therefore, only those entities
recognized prior to June 30, 2011 are authorized to conduct
the game, according to the Commission. The Commission
cited no statute or authority in support of its decision to
terminate its administration of the remote caller bingo
law.
6) Changes to remote caller regulatory scheme : This bill
transfers the remote caller bingo program from the
Commission to DOJ. Under this bill, organizations would
register annually with DOJ, and continue to maintain local
licensure and permitting requirements. The author points
out that this is similar to the regulation of traditional
bingo.
The author notes that this bill requires DOJ to develop
regulations, provide a registration form, and maintain a
registry on its website. SB 383 also requires a charity and
its management company to "self-report" pertinent audit
information to DOJ to ensure the legitimacy of the game, as
well as providing DOJ the information it needs to
substantiate an audit should it be deemed necessary. DOJ
is authorized to charge fees to cover the actual
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registration and audit costs associated with the bill.
The author and supporters note that many charities already
register with DOJ under the Registry of Charitable Trusts,
such as those that conduct casino nights for charitable
purposes; therefore, the application form already exists.
SB 383 further authorizes local governments to amend their
ordinances to allow charities that are already conducting
bingo games to participate in remote caller bingo, and
requires cities and counties that elect to permit remote
caller bingo to monitor the game. The author states that
this is consistent with existing law, in which DOJ has
concurrent jurisdiction with local law enforcement agencies
to enforce laws and take action against those who violate
the law.
7) Support : The supporters write that, under the current
legislation, charities are required to follow complicated
bureaucratic guidelines, which stunt the ability of
qualified honorable charities to provide fundraising games
in their community. The process for licensure requires
excessive paperwork and a lengthy period of review for
qualification.
Supporters believe that this bill will streamline and
revise oversight of remote caller bingo. This legislation
provides for very strictly defined accountability, thus
protecting the public, at the same time as it makes
charitable bingo more accessible by simplifying procedures
and requirements for conducting remote caller bingo games.
Supporters state that the current regulatory program is too
complicated and overwhelming for charities to navigate.
Smaller charities seeking part time fundraising (Schools,
little leagues, clubs, etc.) have found the licensing
process too complicated for their occasional small events.
In the spirit of the law, remote caller bingo was designed
to enable all qualified charities a method of fundraising
to help their organizations to provide essential services.
8) Related legislation :
SB 340 (Wolk, 2011) is substantially similar to this bill.
It was held under submission in Assembly Appropriations in
2011.
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SB 1090 (Cedillo) �Stats. 2010, ch. 514] 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.
SB 126 (Cedillo) �Stats. 2009, ch. 562] enacted a model
local ordinance for use by local government agencies to
sanction remote caller bingo in the city or county
jurisdiction.
SB 1369 (Cedillo) �Stats. 2008, ch. 748] 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.
SUPPORT:
AMVETS, Department of California
Bingo Innovations
California Association of Nonprofits
Vietnam Veterans of America
OPPOSE:
None on file
FISCAL COMMITTEE: Senate Appropriations Committee
URGENCY: Yes
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