Bill Text: CA AB1395 | 2015-2016 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Money laundering: criminal activity: lotteries and gaming.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2016-11-30 - From Senate committee without further action. [AB1395 Detail]
Download: California-2015-AB1395-Amended.html
Bill Title: Money laundering: criminal activity: lotteries and gaming.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2016-11-30 - From Senate committee without further action. [AB1395 Detail]
Download: California-2015-AB1395-Amended.html
BILL NUMBER: AB 1395 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JANUARY 4, 2016
INTRODUCED BY Assembly Member Salas
FEBRUARY 27, 2015
An act to amend Section 17539.1 of the Government Code,
relating to business. 186.9 of the Penal Code,
relating to money laundering.
LEGISLATIVE COUNSEL'S DIGEST
AB 1395, as amended, Salas. Unfair business practices:
contests and sweepstakes. Money laundering: criminal
activity: lotteries and gaming.
Existing law makes it a felony or a misdemeanor to engage in money
laundering, defined as conducting a transaction involving a monetary
instrument of specified value through a financial institution with
the specific intent to promote or facilitate criminal activity.
Existing law defines criminal activity for these purposes as any
criminal offense punishable as a felony.
This bill would expand the definition of criminal activity for
purposes of money laundering to include various offenses punishable
as infractions and misdemeanors related to illegal lotteries and
gaming. By expanding the definition of a crime, this bill would
impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Existing law generally regulates false advertising and
specifically prohibits certain unfair acts or practices undertaken
by, or omissions of, a person in the operation of a contest or
sweepstakes, including, among others, misrepresenting the number of
participants in a contest or sweepstakes or representing, directly or
by implication, that any tie breaker puzzle may be entered upon the
payment of money qualifying the contestant for an extra cash or any
other type prize or prizes except as specified.
This bill would make nonsubstantive changes to these provisions.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no
yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 186.9 of the Penal
Code is amended to read:
186.9. As used in this chapter:
(a) "Conducts" includes, but is not limited to, initiating,
concluding, or participating in conducting, initiating, or concluding
a transaction.
(b) "Financial institution" means, when located or doing business
in this state, any national bank or banking association, state bank
or banking association, commercial bank or trust company organized
under the laws of the United States or any state, any private bank,
industrial savings bank, savings bank or thrift institution, savings
and loan association, or building and loan association organized
under the laws of the United States or any state, any insured
institution as defined in Section 401 of the National Housing Act
(12 (former 12 U.S.C. Sec. 1724(a)),
any credit union organized under the laws of the United States or any
state, any national banking association or corporation acting under
Chapter 6 (commencing with Section 601) of Title 12 of the United
States Code, any agency, agent or branch of a foreign bank, any
currency dealer or exchange, any person or business engaged primarily
in the cashing of checks, any person or business who regularly
engages in the issuing, selling, or redeeming of traveler's checks,
money orders, or similar instruments, any broker or dealer in
securities registered or required to be registered with the
Securities and Exchange Commission under the Securities Exchange Act
of 1934 or with the Commissioner of Corporations under Part 3
(commencing with Section 25200) of Division 1 of Title 4 of the
Corporations Code, any licensed transmitter of funds or other person
or business regularly engaged in transmitting funds to a foreign
nation for others, any investment banker or investment company, any
insurer, any dealer in gold, silver, or platinum bullion or coins,
diamonds, emeralds, rubies, or sapphires, any pawnbroker, any
telegraph company, any person or business regularly engaged in the
delivery, transmittal, or holding of mail or packages, any person or
business that conducts a transaction involving the transfer of title
to any real property, vehicle, vessel, or aircraft, any personal
property broker, any person or business acting as a real property
securities dealer within the meaning of Section 10237 of the Business
and Professions Code, whether licensed to do so or not, any person
or business acting within the meaning and scope of subdivisions (d)
and (e) of Section 10131 and Section 10131.1 of the Business and
Professions Code, whether licensed to do so or not, any person or
business regularly engaged in gaming within the meaning and scope of
Section 330, any person or business regularly engaged in pool selling
or bookmaking within the meaning and scope of Section 337a, any
person or business regularly engaged in horse racing whether licensed
to do so or not under the Business and Professions Code, any person
or business engaged in the operation of a gambling ship within the
meaning and scope of Section 11317, any person or business engaged in
controlled gambling within the meaning and scope of subdivision
(e) (f) of Section 19805 of the
Business and Professions Code, whether registered to do so or not,
and any person or business defined as a "bank," "financial agency,"
or "financial institution" by Section 5312 of Title 31 of the United
States Code or Section 103.11 1010.100
of Title 31 of the Code of Federal Regulations and any successor
provisions thereto.
(c) "Transaction" includes the deposit, withdrawal, transfer,
bailment, loan, pledge, payment, or exchange of currency, or a
monetary instrument, as defined by subdivision (d), or the
electronic, wire, magnetic, or manual transfer of funds between
accounts by, through, or to, a financial institution as defined by
subdivision (b).
(d) "Monetary instrument" means United States currency and coin;
the currency, coin, and foreign bank drafts of any foreign country;
payment warrants issued by the United States, this state, or any
city, county, or city and county of this state or any other political
subdivision thereof; any bank check, cashier's check, traveler's
check, or money order; any personal check, stock, investment
security, or negotiable instrument in bearer form or otherwise in a
form in which title thereto passes upon delivery; gold, silver, or
platinum bullion or coins; and diamonds, emeralds, rubies, or
sapphires. Except for foreign bank drafts and federal, state, county,
or city warrants, "monetary instrument" does not include personal
checks made payable to the order of a named party which have not been
endorsed or which bear restrictive endorsements, and also does not
include personal checks which have been endorsed by the named party
and deposited by the named party into the named party's account with
a financial institution.
(e) "Criminal activity" means a criminal offense punishable under
the laws of this state by death, imprisonment in the state prison, or
imprisonment pursuant to subdivision (h) of Section 1170 or
from a criminal offense committed in another jurisdiction
punishable under the laws of that jurisdiction by death or
imprisonment for a term exceeding one year. "Criminal activity"
also means a criminal offense specified in Chapter 9 (commenci
ng with Section 319) or Chapter 10 (commencing with Section 330)
of Title 9.
(f) "Foreign bank draft" means a bank draft or check issued or
made out by a foreign bank, savings and loan, casa de cambio, credit
union, currency dealer or exchanger, check cashing business, money
transmitter, insurance company, investment or private bank, or any
other foreign financial institution that provides similar financial
services, on an account in the name of the foreign bank or foreign
financial institution held at a bank or other financial institution
located in the United States or a territory of the United States.
SEC. 2. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.
SECTION 1. Section 17539.1 of the Business and
Professions Code is amended to read:
17539.1. (a) The following unfair acts or practices undertaken
by, or omissions of, any person in the operation of any contest or
sweepstakes are prohibited:
(1) Failing to clearly and conspicuously disclose, at the time of
the initial contest solicitation, at the time of each precontest
promotional solicitation and each time the payment of money is
required to become or to remain a contestant, the total number of
contestants anticipated based on prior experience and the percentages
of contestants correctly solving each puzzle used in the three most
recently completed contests conducted by the person. If the person
has not operated or promoted three contests he or she shall disclose
for each prior contest if any, the information required by this
section.
(2) Failing to promptly send to each member of the public upon his
or her request, the actual number and percentage of contestants
correctly solving each puzzle or game in the contest most recently
completed.
(3) Misrepresenting in any manner the odds of winning any prize.
(4) Misrepresenting in any manner, the rules, terms, or conditions
of participation in a contest.
(5) Failing to clearly and conspicuously disclose with all contest
puzzles and games and with all promotional puzzles and games all of
the following:
(A) The maximum number of puzzles or games that may be necessary
to complete the contest and determine winners.
(B) The maximum amount of money, including the maximum cost of any
postage and handling fees, that a participant may be asked to pay to
win each of the contest prizes then offered.
(C) That future puzzles or games, if any, or tie breakers, if any,
will be significantly more difficult than the initial puzzle.
(D) The date or dates on or before which the contest will
terminate and upon which all prizes will be awarded.
(E) The method of determining prizewinners if a tie remains after
the last tie breaker puzzle is completed.
(F) All rules, regulations, terms, and conditions of the contest.
(6) Failing to clearly and conspicuously disclose the exact nature
and approximate value of the prizes when offered.
(7) Failing to award and distribute all prizes of the value and
type represented.
(8) Representing directly or by implication that the number of
participants has been significantly limited, or that any particular
person has been selected to win a prize unless that is the fact.
(9) Representing directly or by implication that any particular
person has won any money, prize, thing, or other value in a contest
unless there has been a real contest in which a meaningful
percentage, which shall be at least a majority, of the participants
in those contests have failed to win a prize, money, thing, or other
value.
(10) Representing directly or by implication that any particular
person has won any money, prize, thing, or other value without
disclosing the exact nature and approximate value thereof.
(11) Using the word "lucky" to describe any number, ticket,
coupon, symbol, or other entry, or representing in any other manner
directly or by implication that any number, ticket, coupon, symbol,
or other entry confers or will confer an advantage upon the recipient
that other recipients will not have, that the recipient is more
likely to win a prize than are others, or that the number, ticket,
coupon, symbol, or other entry has some value that other entries do
not have.
(12) Using or offering for use any method intended to be used by a
person interacting with an electronic video monitor to simulate
gambling or play gambling-themed games in a business establishment
that (A) directly or indirectly implements the predetermination of
sweepstakes cash, cash-equivalent prizes, or other prizes of value,
or (B) otherwise connects a sweepstakes player or participant with
sweepstakes cash, cash-equivalent prizes, or other prizes of value.
For the purposes of this paragraph, "business establishment" means a
business that has any financial interest in the conduct of the
sweepstakes or the sale of the products or services being promoted by
the sweepstakes at its physical location. This paragraph does not
make unlawful game promotions or sweepstakes conducted by for-profit
commercial entities on a limited and occasional basis as an
advertising and marketing tool that are incidental to substantial
bona fide sales of consumer products or services and that are not
intended to provide a vehicle for the establishment of places of
ongoing gambling or gaming.
(13) Failing to obtain the express written or oral consent of
individuals before their names are used for a promotional purpose in
connection with a mailing to a third person.
(14) Using or distributing simulated checks, currency, or any
simulated item of value unless there is clearly and conspicuously
printed thereon the words: SPECIMEN--NONNEGOTIABLE.
(15) Representing, directly or by implication, orally or in
writing, that any tie breaker puzzle may be entered upon the payment
of money qualifying the contestant for an extra cash or any other
type prize or prizes unless:
(A) It is clearly and conspicuously disclosed that the payments
are optional and that contestants are not required to pay money,
except for reasonable postage and handling fees, to play for an extra
cash or any other type of prize or prizes; and
(B) Contestants are clearly and conspicuously given the
opportunity to indicate they wish to enter that phase of the contest
for free, except for reasonable postage and handling fees the amount
of which shall not exceed one dollar and fifty cents ($1.50) plus the
actual cost of postage and which shall be clearly and conspicuously
disclosed at the time of the initial contest solicitation and each
time thereafter that the payment of the fees is required. The
contestants' opportunity to indicate they wish to enter for free
shall be in immediate conjunction with and in a like manner as the
contestants' opportunity to indicate they wish to play for an extra
prize.
(b) For the purposes of this section, "sweepstakes" means a
procedure, activity, or event, for the distribution, donation, or
sale of anything of value by lot, chance, predetermined selection, or
random selection that is not unlawful under other provisions of law,
including, but not limited to, Chapter 9 (commencing with Section
319) and Chapter 10 (commencing with Section 330) of Title 9 of Part
1 of the Penal Code.
(c) This section does not apply to an advertising plan or program
that is regulated by, and complies with, the requirements of Section
17537.1.
(d) Nothing in this section shall be deemed to render lawful any
activity that is unlawful pursuant to other law, including, but not
limited to, Section 320, 330a, 330b, 330.1, or 337j of the Penal
Code.
(e) Nothing in this section shall be deemed to render unlawful or
restrict otherwise lawful games and methods used by a gambling
enterprise licensed under the Gambling Control Act or operations of
the California State Lottery.
