Bill Text: CA AB293 | 2009-2010 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Gambling regulation.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2009-10-11 - Chaptered by Secretary of State - Chapter 233, Statutes of 2009. [AB293 Detail]
Download: California-2009-AB293-Amended.html
Bill Title: Gambling regulation.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2009-10-11 - Chaptered by Secretary of State - Chapter 233, Statutes of 2009. [AB293 Detail]
Download: California-2009-AB293-Amended.html
BILL NUMBER: AB 293 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 13, 2009
INTRODUCED BY Assembly Member Mendoza
FEBRUARY 13, 2009
An act to amend Sections 19804, 19805, 19824, 19841, 19846,
19851, 19852, 19868, 19880, 19882, 19890, 19892, 19893, 19900,
19912, 19921, 19932, 19941, and 19984 of, to amend the heading of
Article 6 (commencing with Section 19890) of Chapter 5 of Division 8
of, and to add Sections 19890.5 and 19966 to, the Business and
Professions Code, relating to gambling.
LEGISLATIVE COUNSEL'S DIGEST
AB 293, as amended, Mendoza. Gambling regulation.
(1) The Gambling Control Act provides for the licensure of certain
individuals and establishments involved in various gambling
activities, and for the regulation of those activities, by the
California Gambling Control Commission. Existing law provides for the
enforcement of those activities by the Department of Justice. Any
violation of these provisions is punishable as a misdemeanor, as
specified.
Existing law provides that no temporary injunction or other
provisional order shall issue to restrain, stay, or otherwise
interfere with any action by the department or the commission, except
as specified, and that no order may be effective for more than 15
calendar days.
This bill instead would provide that, except for preliminary
injunctions, no order may be effective for more than 15 calendar
days, and no preliminary order may be effective for more than 45
days, except by stipulation of the department or commission.
(2) Existing law authorizes the commission, for any cause deemed
reasonable by the commission, to deny any application for a license,
permit, or approval, to limit, condition, or restrict any license,
permit, or approval, or to impose any fine upon any person licensed
or approved.
This bill would further authorize the commission to condition,
restrict, discipline, or take action against the license of an
individual owner endorsed on the license certificate of the gambling
enterprise whether or not the commission takes action against the
license of the gambling enterprise.
This bill would also expand the definition of "license" to include
any license issued by the commission pursuant to or adopted pursuant
to the Gambling Control Act.
(3) Existing law authorizes the commission to adopt regulations
for the administration and enforcement of the Gambling Control Act.
The regulations adopted by the commission are required to prohibit
gambling establishments from cashing checks drawn against any
federal, state, or county fund. Existing law requires gambling
establishments to send the department copies of all dishonored or
uncollectible checks at the end of each quarter.
This bill would require the regulations to prohibit gambling
enterprises from cashing checks drawn against any federal, state, or
county fund, and would delete the requirement that copies of
dishonored or uncollectible checks be sent to the department. The
bill also would require the regulations, by December 31,
2010 2011 , to provide procedures, criteria, and
timelines for the processing and approval of applications for the
licensing, temporary or interim licensing, or findings of suitability
for receivers, trustees, beneficiaries, executors, administrators,
conservators, successors in interest, or security interest holders
for a gambling enterprise so that gambling enterprises may operate
continuously in cases , including, but not limited
to, the death, insolvency, foreclosure, receivership, or incapacity
of a licensee.
(4) Existing law provides that the owner of a gambling enterprise
shall apply for and obtain a state gambling license and other persons
who obtain a state gambling license or key employee license shall
not receive a separate license certificate.
This bill would designate the owner of a gambling enterprise as
the owner-licensee, delete an obsolete cross reference, and make
other conforming changes.
(4)
(5) Existing law provides that an owner of a gambling
enterprise that is not a natural person shall not be eligible for a
state gambling license unless certain persons individually apply for
and obtain a state gambling license, except as specified.
This bill would define "gambling enterprise" for purposes of these
provisions, and would require that, if the owner is a limited
liability company, every officer, manager, member, or owner apply for
and obtain a state gambling license as described above. The bill
would make other conforming changes.
(5)
(6) Existing law requires the department to investigate
an applicant for a gambling license. Existing law provides that, if
denial of the application, or approval of the license with
restrictions or conditions on the license, is recommended, the head
of the entity within the department that is responsible for enforcing
these provisions shall prepare and file with the commission his or
her written reasons upon which the recommendation is based.
This bill would, in addition, require the head of that entity
within the department to file with the commission the reasons for his
or her recommendation if he or she recommends approval of the
license with restrictions or conditions. The bill also would require
the head of that entity to prepare and file with the
commission, if a restriction or condition on the license is
recommended, his or her written reasons upon which the recommendation
is based, including informing inform the
applicant in writing generally of the basis for any proposed
recommendation that the application be restricted or conditioned, as
specified.
(6)
(7) Existing law requires a corporation to comply with
specified requirements in order to obtain a gambling license,
including a requirement that the corporation register as a
corporation with the department and supply specified supplemental
information to the department.
This bill would instead require a corporation to supply
supplemental forms and information with the initial license
application, and thereafter only on request, to the department, as
specified.
(7)
(8) Existing law requires the owner of any security
issued by a corporation that applies for or holds an owner license to
immediately offer the security to the issuing corporation for
purchase, if at any time the commission denies a license to the
individual owner of the security.
This bill would instead require the commission, if at any time it
denies a license to, or revokes the license of, an individual owner
of any security issued by a corporation that applies for or holds an
owner license, to immediately notify the individual and the
corporation of that fact. The bill would require the owner of the
security to sell the security, as specified.
(8)
(9) Existing law requires a limited partnership to
comply with specified requirements in order to obtain a gambling
license, including a requirement that the limited partnership be
formed under the laws of this state.
This bill would impose on all partnerships the requirements for
obtaining a gambling license that are applicable to limited
partnerships, and would require that a partnership be registered as
may be required under the laws of this state ,
instead of being formed under the laws of this state. The bill would
modify other applicable requirements, including imposing on
partnerships the requirement described in paragraph (6) relative to
corporations. The bill would also require that limited liability
companies comply with parallel requirements in order to obtain a
gambling license.
(9)
(10) Under existing law, the purported sale,
assignment, transfer, pledge, or other disposition of any interest in
a limited partnership that holds a gambling license, or the grant of
an option to purchase the interest, is void unless approved in
advance by the commission. Existing law also requires the commission,
if at any time it denies a license to an individual owner of any
interest in a limited partnership that holds a gambling license, to
immediately notify the partnership of that fact, and would
require requires the partnership to return to
the denied owner of the interest in cash the amount of his or her
capital account, as specified.
This bill would make these provisions applicable to all
partnerships and limited liability companies that hold a gambling
license, would require the commission to give notice to the
individual owner of the interest when it denies or revokes the
license of the individual, and would require that individual to sell
his or her interest, as specified.
(10)
(11) Existing law requires that, to the extent required
by specified provisions of law, certain persons associated with a
limited partnership that holds or applies for a license to own a
gambling enterprise be licensed individually.
This bill would include members and managers among the persons to
whom the above requirement applies and would impose the requirement,
in addition, on those persons if they are associated with any
partnership or limited liability company that holds or applies for a
license to own a gambling enterprise.
(11)
(12) Existing law prohibits certain security interests
from being enforced without the prior approval of the commission and
compliance with certain regulations adopted by the department,
including a security interest in a security issued by a partnership,
except as specified. The department is required to adopt regulations
establishing the procedure for the enforcement of a security
interest.
This bill would, in addition, prohibit enforcement of a security
interest without the above approval if the security interest is in a
security issued by a limited partnership or limited liability
company. The bill would instead require the commission to adopt those
regulations.
(12)
(13) Existing law requires an order of the commission
denying an application for a work permit to be reviewed in accordance
with specified provisions of law.
This bill would, in addition, apply the above requirement to an
order of the commission placing restrictions or conditions on a work
permit.
(13)
(14) Existing law prohibits permitting any person under
21 years of age from entering upon the premises of a licensed
gambling establishment, except for limited areas, as specified, and
requires a separate entrance to those areas.
This bill would include among those exceptions a designated
pathway to reach those permissible areas, would delete the
requirement for a separate entrance, and would permit passage of a
person under 21 years of age through the gaming floor by way of a
designated pathway if accompanied by a person over 21 years of age or
an employee of the gambling establishment.
(14)
(15) Existing law provides that any person aggrieved by
a final decision or order of the commission that limits, conditions,
suspends, or revokes any previously granted license or approval,
made after hearing by the commission, may petition the Superior Court
for the County of Sacramento for judicial review pursuant to
specified provisions of law. Existing law provides that the court may
summarily deny the petition, or the court may issue an alternative
writ directing the commission to certify the whole record of the
department in the case to the court. Existing law requires that, if
an alternative writ issues, the cause be heard on the whole record of
the department as certified by the commission.
This bill would, instead, with respect to the above alternative
writ, authorize the court to issue that writ to certify the whole
record in the case to the court, and would require that, if the
alternative writ issues, the cause be heard on the whole record as
certified by the commission.
(15) Existing law provides that any licensee or employee in a
gambling establishment who violates or permits the violation of
specified prohibitions, including a provision prohibiting a person
under 21 years of age from loitering in or about any room in which a
gambling game is operated or conducted, is guilty of a crime.
This bill would eliminate the above crime as it applies to a
licensee or employee in a gambling establishment who permits a person
under 21 years of age from loitering as described above.
(16) The Gambling Control Act authorizes a city or county to
permit controlled gambling, consistent with state law, if a majority
of voters affirmatively approve an ordinance so permitting, as
specified. That law authorizes an amendment of an ordinance
permitting an expansion of gambling, within a specified limit,
without voter approval, and also authorizes, without voter approval,
an amendment to an ordinance permitting an increase of 24.99% in the
number of gambling tables that may be operated in a gambling
establishment or 2 gambling tables, whichever is greater, compared to
the ordinance in effect on January 1, 1996.
This bill would authorize, if a gambling establishment is located
in an unincorporated area annexed by a city without a local election
other than the election to approve the annexation, the city acquiring
jurisdiction to adopt an ordinance permitting and regulating
controlled gaming in the existing gambling establishment, providing
hours of operation, the games to be played, wagering limits, the
maximum number of gambling establishments, and the maximum number of
tables permitted in each gambling establishment, the same as those
limits in any ordinance or resolutions that formerly applied to the
gambling establishment.
(17) Because any violation of these provisions would be punishable
as a misdemeanor, the bill would impose a state-mandated local
program by creating a new crime.
(18) 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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 19804 of the Business and Professions Code is
amended to read:
19804. (a) In any action for declaratory or injunctive relief, or
for relief by way of any extraordinary writ, other than an action
initiated pursuant to Section 19932, wherein the construction,
application, or enforcement of this chapter, or any regulation
adopted pursuant thereto, or any order of the department or the
commission issued pursuant thereto, is called into question, a court
shall not grant any preliminary or permanent injunction, or any
peremptory writ of mandate, certiorari, or prohibition, in connection
therewith, except as follows:
(1) Upon proof by clear and convincing evidence that the
department or the commission is abusing or threatens to abuse its
discretion.
(2) Upon proof by clear and convincing evidence that the
department or the commission is exceeding or threatens to exceed its
jurisdiction.
(b) No temporary injunction or other provisional order shall issue
to restrain, stay, or otherwise interfere with any action by the
department or the commission, except upon a finding by the court,
based on clear and convincing evidence, that the public interest will
not be prejudiced thereby, and, except for preliminary injunctions,
no order may be effective for more than 15 calendar days, except by
stipulation of the department or commission. No preliminary order may
be effective for more than 45 days, except by stipulation of the
department or commission.
(c) This section does not relieve a petitioner's obligation to
exhaust administrative remedies.
(d) In an action for relief of any nature wherein the
construction, application, or enforcement of this chapter, or any
regulation adopted pursuant thereto, or any order of the department
or commission issued pursuant thereto, is called into question, the
party filing the pleading shall furnish a copy thereof to the
department and to the commission. The copy shall be furnished by the
party filing the pleading within 10 business days after filing.
SEC. 2. Section 19805 of the Business and Professions Code is
amended to read:
19805. As used in this chapter, the following definitions shall
apply:
(a) "Affiliate" means a person who, directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under
common control with, a specified person.
(b) "Applicant" means any person who has applied for, or is about
to apply for, a state gambling license, a key employee license, a
registration, a finding of suitability, a work permit, a manufacturer'
s or distributor's license, or an approval of any act or transaction
for which the approval or authorization of the commission or
department is required or permitted under this chapter.
(c) "Banking game" or "banked 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, ensure that the player-dealer is able to win or
lose only a fixed and limited wager during the play of the game, and
preclude the house, another entity, a player, or an observer from
maintaining or operating as a bank during the course of the game. For
purposes of this section , it is not the intent of the
Legislature to mandate acceptance of the deal by every player if the
department finds that the rules of the game render the maintenance of
or operation of a bank impossible by other means. The house shall
not occupy the player-dealer position.
(d) "Chief" means the head of the entity within the department
that is responsible for fulfilling the obligations imposed upon the
department by this chapter.
(e) "Commission" means the California Gambling Control Commission.
(f) "Controlled gambling" means to deal, operate, carry on,
conduct, maintain, or expose for play any controlled game.
(g) "Controlled game" means any controlled game, as defined by
subdivision (e) of Section 337j of the Penal Code.
(h) "Department" means the Department of Justice.
(i) "Director" means any director of a corporation or any person
performing similar functions with respect to any organization.
(j) "Finding of suitability" means a finding that a person meets
the qualification criteria described in subdivisions (a) and (b) of
Section 19857, and that the person would not be disqualified from
holding a state gambling license on any of the grounds specified in
Section 19859.
(k) "Game" and "gambling game" means any controlled game.
(l) "Gambling" means to deal, operate, carry on, conduct,
maintain, or expose for play any controlled game.
(m) "Gambling enterprise" means any person that owns a
gambling operation 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 this chapter .
(n) "Gambling enterprise employee" means any natural person
employed in the operation of a gambling enterprise, including,
without limitation, dealers, floor personnel, security employees,
countroom personnel, cage personnel, collection personnel,
surveillance personnel, data-processing personnel, appropriate
maintenance personnel, waiters and waitresses, and secretaries, or
any other natural person whose employment duties require or authorize
access to restricted gambling establishment areas.
(o) "Gambling establishment," "establishment," or "licensed
premises," except as otherwise defined in Section 19812, means one or
more rooms where any controlled gambling or activity directly
related thereto occurs.
(p) "Gambling license" or "state gambling license" means any
license issued by the state that authorizes the person named therein
to conduct a gambling operation.
(q) "Gambling operation" means exposing for play one or more
controlled games that are dealt, operated, carried on, conducted, or
maintained for commercial gain.
(r) "Gross revenue" means the total of all compensation received
for conducting any controlled game, and includes interest received in
payment for credit extended by an owner licensee to a patron for
purposes of gambling, except as provided by regulation.
(s) "Hours of operation" means the period during which a gambling
establishment is open to conduct the play of controlled games within
a 24-hour period. In determining whether there has been expansion of
gambling relating to "hours of operation," the department shall
consider the hours in the day when the local ordinance permitted the
gambling establishment to be open for business on January 1, 1996,
and compare the current ordinance and the hours during which the
gambling establishment may be open for business. The fact that the
ordinance was amended to permit gambling on a day, when gambling was
not permitted on January 1, 1996, shall not be considered in
determining whether there has been gambling in excess of that
permitted by Section 19961.
(t) "House" means the gambling enterprise, and any owner,
shareholder, partner, key employee, or landlord thereof.
(u) "Independent agent," except as provided by regulation, means
any person who does either of the following:
(1) Collects debt evidenced by a credit instrument.
(2) Contracts with an owner licensee, or an affiliate thereof, to
provide services consisting of arranging transportation or lodging
for guests at a gambling establishment.
(v) "Initial license" means the license first issued to a person
authorizing that person to commence the activities authorized by that
license.
(w) "Institutional investor" means any retirement fund
administered by a public agency for the exclusive benefit of federal,
state, or local public employees, any investment company registered
under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et
seq.), any collective investment trust organized by banks under Part
Nine of the Rules of the Comptroller of the Currency, any closed-end
investment trust, any chartered or licensed life insurance company or
property and casualty insurance company, any banking and other
chartered or licensed lending institution, any investment advisor
registered under the Investment Advisors Act of 1940 (15 U.S.C. Sec.
80b-1 et seq.) acting in that capacity, and other persons as the
commission may determine for reasons consistent with the policies of
this chapter.
(x) "Key employee" means any natural person employed in the
operation of a gambling enterprise in a supervisory capacity or
empowered to make discretionary decisions that regulate gambling
operations, including, without limitation, pit bosses, shift bosses,
credit executives, cashier operations supervisors, gambling operation
managers and assistant managers, managers or supervisors of security
employees, or any other natural person designated as a key employee
by the department for reasons consistent with the policies of this
chapter.
(y) "Key employee license" means a state license authorizing the
holder to be employed as a key employee.
(z) "License" means a gambling license or
, key employee license license, or any
other license issued by the commission pursuant to this chapter or
regulations adopted pursuant to this chapter .
(aa) "Licensed gambling establishment" means the gambling premises
encompassed by a state gambling license.
(ab) "Limited partnership" means a partnership formed by two or
more persons having as members one or more general partners and one
or more limited partners.
(ac) "Limited partnership interest" means the right of a general
or limited partner to any of the following:
(1) To receive from a limited partnership any of the following:
(A) A share of the revenue.
(B) Any other compensation by way of income.
(C) A return of any or all of his or her contribution to capital
of the limited partnership.
(2) To exercise any of the rights provided under state law.
(ad) "Owner licensee" means an owner of a gambling enterprise who
holds a state gambling license.
(ae) "Person," unless otherwise indicated, includes a natural
person, corporation, partnership, limited partnership, trust, joint
venture, association, or any other business organization.
(af) "Player" means a patron of a gambling establishment who
participates in a controlled game.
(ag) "Player-dealer" and "controlled game featuring a
player-dealer position" refer to a position in a controlled game, as
defined by the approved rules for that game, in which seated player
participants are afforded the temporary opportunity to wager against
multiple players at the same table, provided that this position is
rotated amongst the other seated players in the game.
(ah) "Publicly traded racing association" means a corporation
licensed to conduct horse racing and simulcast wagering pursuant to
Chapter 4 (commencing with Section 19400) whose stock is publicly
traded.
(ai) "Qualified racing association" means a corporation licensed
to conduct horse racing and simulcast wagering pursuant to Chapter 4
(commencing with Section 19400) that is a wholly owned subsidiary of
a corporation whose stock is publicly traded.
(aj) "Renewal license" means the license issued to the holder of
an initial license that authorizes the license to continue beyond the
expiration date of the initial license.
(ak) "Work permit" means any card, certificate, or permit issued
by the commission, or by a county, city, or city and county, whether
denominated as a work permit, registration card, or otherwise,
authorizing the holder to be employed as a gambling enterprise
employee or to serve as an independent agent. A document issued by
any governmental authority for any employment other than gambling is
not a valid work permit for the purposes of this chapter.
SEC. 3. Section 19824 of the Business and Professions Code is
amended to read:
19824. The commission shall have all powers necessary and proper
to enable it fully and effectually to carry out the policies and
purposes of this chapter, including, without limitation, the power to
do all of the following:
(a) Require any person to apply for a license, permit,
registration, or approval as specified in this chapter, or
regulations adopted pursuant to this chapter.
(b) For any cause deemed reasonable by the commission, deny any
application for a license, permit, or approval provided for in this
chapter or regulations adopted pursuant to this chapter, limit,
condition, or restrict any license, permit, or approval, or impose
any fine upon any person licensed or approved. The commission may
condition, restrict, discipline, or take action against the license
of an individual owner endorsed on the license certificate
of the gambling enterprise whether or not the commission takes
action against the license of the gambling enterprise.
(c) Approve or disapprove transactions, events, and processes as
provided in this chapter.
(d) Take actions deemed to be reasonable to ensure that no
ineligible, unqualified, disqualified, or unsuitable persons are
associated with controlled gambling activities.
(e) Take actions deemed to be reasonable to ensure that gambling
activities take place only in suitable locations.
(f) Grant temporary licenses, permits, or approvals on appropriate
terms and conditions.
(g) Institute a civil action in any superior court against any
person subject to this chapter to restrain a violation of this
chapter. An action brought against a person pursuant to this section
does not preclude a criminal action or administrative proceeding
against that person by the Attorney General or any district attorney
or city attorney.
(h) Issue subpoenas to compel attendance of witnesses and
production of documents and other material things at a meeting or
hearing of the commission or its committees, including advisory
committees.
SEC. 4. Section 19841 of the Business and Professions Code is
amended to read:
19841. The regulations adopted by the commission shall do all of
the following:
(a) With respect to applications, registrations, investigations,
and fees, the regulations shall include, but not be limited to,
provisions that do all of the following:
(1) Prescribe the method and form of application and registration.
(2) Prescribe the information to be furnished by any applicant,
licensee, or registrant concerning, as appropriate, the person's
personal history, habits, character, associates, criminal record,
business activities, organizational structure, and financial affairs,
past or present.
(3) Prescribe the information to be furnished by an owner licensee
relating to the licensee's gambling employees.
(4) Require fingerprinting or other methods of identification of
an applicant, licensee, or employee of a licensee.
(5) Prescribe the manner and method of collection and payment of
fees and issuance of licenses.
(b) Provide for the approval of game rules and equipment by the
department to ensure fairness to the public and compliance with state
laws.
(c) Implement the provisions of this chapter relating to licensing
and other approvals.
(d) Require owner licensees to report and keep records of
transactions, including transactions as determined by the department,
involving cash or credit. The regulations may include, without
limitation, regulations requiring owner licensees to file with the
department reports similar to those required by Sections 5313 and
5314 of Title 31 of the United States Code, and by Sections 103.22
and 103.23 of Title 31 of the Code of Federal Regulations, and any
successor provisions thereto, from financial institutions, as defined
in Section 5312 of Title 31 of the United States Code and Section
103.11 of Title 31 of the Code of Federal Regulations, and any
successor provisions.
(e) Provide for the receipt of protests and written comments on an
application by public agencies, public officials, local governing
bodies, or residents of the location of the gambling establishment or
future gambling establishment.
(f) Provide for the disapproval of advertising by licensed
gambling establishments that is determined by the department to be
deceptive to the public. Regulations adopted by the commission for
advertising by licensed gambling establishments shall be consistent
with the advertising regulations adopted by the California Horse
Racing Board and the Lottery Commission. Advertisement that appeals
to children or adolescents or that offers gambling as a means of
becoming wealthy is presumptively deceptive.
(g) Govern all of the following:
(1) The extension of credit.
(2) The cashing, deposit, and redemption of checks or other
negotiable instruments.
(3) The verification of identification in monetary transactions.
(h) Prescribe minimum procedures for adoption by owner licensees
to exercise effective control over their internal fiscal and gambling
affairs, which shall include, but not be limited to, provisions for
all of the following:
(1) The safeguarding of assets and revenues, including the
recording of cash and evidences of indebtedness.
(2) Prescribing the manner in which compensation from games and
gross revenue shall be computed and reported by an owner licensee.
(3) The provision of reliable records, accounts, and reports of
transactions, operations, and events, including reports to the
department.
(i) Provide for the adoption and use of internal audits, whether
by qualified internal auditors or by certified public accountants. As
used in this subdivision, "internal audit" means a type of control
that operates through the testing and evaluation of other controls
and that is also directed toward observing proper compliance with the
minimum standards of control prescribed in subdivision (h).
(j) Require periodic financial reports from each owner licensee.
(k) Specify standard forms for reporting financial conditions,
results of operations, and other relevant financial information.
(l) Formulate a uniform code of accounts and accounting
classifications to ensure consistency, comparability, and effective
disclosure of financial information.
(m) Prescribe intervals at which the information in subdivisions
(j) and (k) shall be furnished to the department.
(n) Require audits to be conducted, in accordance with generally
accepted auditing standards, of the financial statements of all owner
licensees whose annual gross revenues equal or exceed a specified
sum. However, nothing herein shall be construed to limit the
department's authority to require audits of any owner licensee.
Audits, compilations, and reviews provided for in this subdivision
shall be made by independent certified public accountants licensed to
practice in this state.
(o) Restrict, limit, or otherwise regulate any activity that is
related to the conduct of controlled gambling, consistent with the
purposes of this chapter.
(p) Define and limit the area, games, hours of operation, number
of tables, wagering limits, and equipment permitted, or the method of
operation of games and equipment, if the commission, upon the
recommendation of, or in consultation with, the department,
determines that local regulation of these subjects is insufficient to
protect the health, safety, or welfare of residents in geographical
areas proximate to a gambling establishment.
(q) Prohibit gambling enterprises from cashing checks drawn
against any federal, state, or county fund, including, but not
limited to, social security, unemployment insurance, disability
payments, or public assistance payments. However, a gambling
enterprise shall not be prohibited from cashing any payroll checks or
checks for the delivery of goods or services that are drawn against
a federal, state, or county fund.
(r) Provide for standards, specifications, and procedures
governing the manufacture, distribution, including the sale and
leasing, inspection, testing, location, operation, repair, and
storage of gambling equipment, and for the licensing of persons
engaged in the business of manufacturing, distributing, including the
sale and leasing, inspection, testing, repair, and storage of
gambling equipment.
(s) By December 31, 2010 2011 ,
provide procedures, criteria, and timelines for the processing and
approval of applications for the licensing, temporary or interim
licensing, or findings of suitability for receivers, trustees,
beneficiaries, executors, administrators, conservators, successors in
interest, or security interest holders for a gambling enterprise so
that gambling enterprises may operate continuously in cases
including, but not limited to, the death, insolvency, foreclosure,
receivership, or incapacity of a licensee.
SEC. 5. Section 19846 of the Business and Professions Code is
amended to read:
19846. (a) Notwithstanding any other provision of law and except
as provided in subdivision (b), a gambling enterprise that ejects or
excludes an individual based upon Section 19844 or 19845 is not
subject to civil liability for a mistake as to the grounds for
ejecting or excluding a person if the ejection or exclusion was based
upon a reasonable and good faith belief, after a reasonable
investigation, that these sections applied to the individual in
question.
(b) Notwithstanding subdivision (a), a gambling enterprise may not
be relieved from liability for any damages arising from the means of
ejection or exclusion.
SEC. 6. Section 19851 of the Business
and Professions Code is amended to read:
19851. (a) The owner of a gambling enterprise shall apply for and
obtain a state gambling license. The owner of a gambling
enterprise shall be known as the owner-licensee.
(b) Other persons who also obtain a state gambling license,
or key employee license, as required by this
chapter, shall not receive a separate license certificate, but the
license of every such person shall be endorsed on the license
certificate that is issued to the owner of the gambling
enterprise.
(c) Notwithstanding subdivision (b), this section shall not apply
to key employee licenses issued on or after July 1, 2008, or the
effective date of the process established pursuant to subdivision (d)
of Section 19854 to make key employee licenses personal and
portable, whichever is sooner.
SEC. 6. SEC. 7. Section 19852 of the
Business and Professions Code is amended to read:
19852. Except as provided in Section 19852.2, an owner of a
gambling enterprise that is not a natural person shall not be
eligible for a state gambling license unless each of the following
persons individually applies for and obtains a state gambling
license:
(a) If the owner is a corporation, then each officer, director,
and shareholder, other than a holding or intermediary company, of the
owner. The foregoing does not apply to an owner that is either a
publicly traded racing association or a qualified racing association.
(b) If the owner is a publicly traded racing association, then
each officer, director, and owner, other than an institutional
investor, of 5 percent or more of the outstanding shares of the
publicly traded corporation.
(c) If the owner is a qualified racing association, then each
officer, director, and shareholder, other than an institutional
investor, of the subsidiary corporation and any owner, other than an
institutional investor, of 5 percent or more of the outstanding
shares of the publicly traded corporation.
(d) If the owner is a partnership, then every general and limited
partner of, and every trustee or person, other than a holding or
intermediary company, having or acquiring a direct or beneficial
interest in, that partnership owner.
(e) If the owner is a trust, then the trustee and, in the
discretion of the commission, any beneficiary and the trustor of the
trust.
(f) If the owner is a limited liability company, every officer,
manager, member, or owner.
(g) If the owner is a business organization other than a
corporation, partnership, trust, or limited liability company, then
all those persons as the commission may require, consistent with this
chapter.
(h) Each person who receives, or is to receive, any percentage
share of the revenue earned by the owner from gambling activities.
(i) Every employee, agent, guardian, personal representative,
lender, or holder of indebtedness of the owner who, in the judgment
of the commission, has the power to exercise a significant influence
over the gambling operation.
SEC. 7. SEC. 8. Section 19868 of the
Business and Professions Code is amended to read:
19868. (a) Within a reasonable time after the filing of an
application and any supplemental information the department may
require, and the deposit of any fee required pursuant to Section
19867, the department shall commence its investigation of the
applicant and, for that purpose, may conduct any proceedings it deems
necessary. To the extent practicable, all applications shall be
acted upon within 180 calendar days of the date of submission of a
completed application. If an investigation has not been concluded
within 180 days after the date of submission of a completed
application, the department shall inform the applicant in writing of
the status of the investigation and shall also provide the applicant
with an estimated date on which the investigation may reasonably be
expected to be concluded.
(b) If denial of the application, or approval of the license with
restrictions or conditions on the license, is recommended, the chief
shall prepare and file with the commission his or her written reasons
upon which the recommendation is based.
(1) Prior to filing his or her recommendation with the commission,
the chief shall meet with the applicant, or the applicant's duly
authorized representative, and inform him or her generally of the
basis for any proposed recommendation that the application be denied,
restricted, or conditioned.
(2) Not less than 10 business days prior to the meeting of the
commission at which the application is to be considered, the
department shall deliver to the applicant a summary of the chief's
final report and recommendation.
(3) This section requires the department neither to divulge to the
applicant any confidential information received from any law
enforcement agency or any information received from any person with
assurances that the information would be maintained confidential, nor
to divulge any information that might reveal the identity of any
informer or jeopardize the safety of any person.
(c) If a
restriction or condition on the license is recommended, the chief
shall prepare and file with the commission his or her written reasons
upon which the recommendation is based.
(1) Prior to filing his or her recommendation with the commission,
and not less than 10 business days prior to the meeting of the
commission at which the application is to be considered, the chief
shall inform the applicant in writing generally of the basis for any
proposed recommendation that the application be restricted or
conditioned, including the legal and factual grounds on which the
recommendation is based.
(2) This section does not require the department to divulge to the
applicant any confidential information received from any law
enforcement agency or any information received from any person with
assurances that the information would be maintained confidential, or
to divulge any information that might reveal the identity of any
informer or jeopardize the safety of any person.
(d) A recommendation of denial of an application shall be without
prejudice to a new and different application filed in accordance with
applicable regulations.
SEC. 8. SEC. 9. Section 19880 of the
Business and Professions Code is amended to read:
19880. In addition to the requirements of Section 19852, in order
to be eligible to receive a gambling license as the owner of a
gambling enterprise, a corporation shall comply with all of the
following requirements:
(a) Maintain an office of the corporation in the gambling
establishment.
(b) Comply with all of the requirements of the laws of this state
pertaining to corporations.
(c) Maintain, in the corporation's principal office in California
or in the gambling establishment, a ledger that meets both of the
following conditions:
(1) At all times reflects the ownership of record of every class
of security issued by the corporation.
(2) Is available for inspection by the department at all
reasonable times without notice.
(d) Supply supplemental forms and information, in accordance with
Section 19865, with the initial license application, and thereafter
only on request, to the department, which shall include, but not be
limited to, all of the following:
(1) The organization, financial structure, and nature of the
business to be operated, including the names, personal and criminal
history, and fingerprints of all officers and directors, and the
names, addresses, and number of shares held by all stockholders of
record.
(2) The rights and privileges acquired by the holders of different
classes of authorized securities, including debentures.
(3) The terms on which securities are to be offered.
(4) The terms and conditions on all outstanding loans, mortgages,
trust deeds, pledges, or any other indebtedness or security interest.
(5) The extent of the equity security holdings in the corporation
of all officers, directors, and underwriters, and their remuneration
as compensation for services, in the form of salary, wages, fees, or
otherwise.
(6) The amount of remuneration to persons other than directors and
officers in excess of one hundred thousand dollars ($100,000) per
annum.
(7) Bonus and profit-sharing arrangements.
(8) Management, consultant, and service contracts related to the
operation of controlled gaming.
(9) Options existing, or to be created, in respect of their
securities or other interests.
(10) Financial statements for at least three fiscal years
preceding the year of registration, or, if the corporation has not
been in existence for a period of three years, financial statements
from the date of its formation. All financial statements shall be
prepared in accordance with generally accepted accounting principles
and audited by a licensee of the California Board of Accountancy.
(11) Any further financial data that the department, with the
approval of the commission, may deem necessary or appropriate for the
protection of the state.
(12) An annual profit-and-loss statement and an annual balance
sheet, and a copy of its annual federal income tax return, within 30
calendar days after that return is filed with the Internal Revenue
Service.
SEC. 9. SEC. 10. Section 19882 of the
Business and Professions Code is amended to read:
19882. (a) If at any time the commission denies a license to, or
revokes the license of, an individual owner of any security issued by
a corporation that applies for or holds an owner license, the
commission shall immediately notify the individual and the
corporation of that fact. The owner of the security shall sell the
security for an amount not greater than fair market value, within 60
calendar days of the denial or revocation. Upon a showing of due
diligence, the commission may extend the time for selling the
security.
(b) Beginning upon the date when the department
commission serves notice of the denial upon the
corporation, it is unlawful for the denied security owner to do any
of the following:
(1) Receive any dividend, income, or interest upon any security
described in subdivision (a), except dividends equal to the good
faith estimate of the owner's personal share of any income tax due on
the ownership interest until the date of the sale, as determined in
writing by an independent certified public accountant, or as may be
necessary to protect the election of the gambling enterprise to be
treated as an "S corporation" under Subchapter S (commencing with
Section 1361) of Chapter 1 of Subtitle A of the Internal Revenue
Code.
(2) Exercise, directly or through any trustee or nominee, any
voting right conferred by any security described in subdivision (a).
(3) Receive any remuneration in any form from the corporation for
services rendered or for any other purpose.
(c) Every security issued by a corporate owner licensee shall bear
a statement, on both sides of the certificate evidencing the
security, of the restrictions imposed by this section.
SEC. 10. SEC. 11. The heading of
Article 6 (commencing with Section 19890) of Chapter 5 of Division 8
of the Business and Professions Code is amended to read:
Article 6. Licensing of Partnerships and Limited Liability
Companies
SEC. 11. SEC. 12. Section 19890 of
the Business and Professions Code is amended to read:
19890. In addition to the requirements of Section 19852, in order
to be eligible to receive a gambling license to own a gambling
enterprise, a partnership shall comply with all of the following
requirements:
(a) Be registered as may be required under the laws of this state.
(b) Maintain an office of the partnership in the gambling
establishment.
(c) Comply with all of the requirements of the laws of this state
pertaining to partnerships.
(d) Maintain an ongoing ledger in an office of the partnership in
California that shall meet both of the following conditions:
(1) At all times reflects the ownership of all interests in the
partnership.
(2) Be available for inspection by the department at all
reasonable times without notice.
(e) Supply the following supplemental forms and information in
accordance with Section 19865 with the initial license application,
and thereafter upon request, to the department, which shall include,
but not be limited to:
(1) The organization, financial structure, and nature of the
business to be operated, including the name, address, personal
history, interest, and fingerprints of each partner and manager.
(2) The rights, privileges, and relative priorities of any
partners as to the return of contributions to capital, and the right
to receive income, accept losses, and incur liabilities.
(3) The terms on which partnership interests are to be offered.
(4) The terms and conditions on all outstanding loans, mortgages,
trust deeds, pledges, or any other indebtedness or security interest.
(5) The extent of the holding in the partnership of all
underwriters, and their remuneration as compensation for services, in
the form of salary, wages, fees, or otherwise.
(6) The remuneration to persons other than general partners in
excess of one hundred thousand dollars ($100,000) per annum.
(7) Bonus and profit-sharing arrangements.
(8) Management, consulting, and service contracts related to the
operation of controlled gambling.
(9) Options existing or to be created.
(10) Financial statements for at least three fiscal years
preceding the year of registration, or, if the partnership has not
been in existence for a period of three years, financial statements
from the date of its formation. All financial statements shall be
prepared in accordance with generally accepted accounting principles
and audited by a licensee of the California Board of Accountancy in
accordance with generally accepted auditing standards.
(11) Any further financial data that the department reasonably
deems necessary or appropriate for the protection of the state.
(12) An annual profit and loss
profit-and-loss statement, an annual balance sheet, and a copy
of its annual federal income tax return, within 30 calendar days
after the return is filed with the Internal Revenue Service.
SEC. 12. SEC. 13. Section 19890.5 is
added to the Business and Professions Code, to read:
19890.5. In addition to the requirements of Section 19852, in
order to be eligible to receive a gambling license to own a gambling
enterprise, a limited liability company shall comply with all of the
following requirements:
(a) Be registered to do business in California.
(b) Maintain an office in the gambling establishment.
(c) Comply with all of the requirements of the laws of this state
pertaining to a limited liability company.
(d) Maintain an ongoing ledger in an office of the limited
liability company in California that shall meet both of the following
conditions:
(1) At all times reflect the ownership, membership, and management
interests.
(2) Be available for inspection by the department at all
reasonable times without notice.
(e) Supply the following supplemental forms and information in
accordance with Section 19865 with the initial application, and
thereafter upon request to the department, which shall include, but
not be limited to, all of the following:
(1) The organization, financial structure, and nature of the
business to be operated, including the names, personal and criminal
history, and fingerprints of all members and managers, and the name,
address, and interest of each owner, member, and manager.
(2) The rights, privileges, and relative priorities of members as
to the return of contributions to capital, and the right to receive
income, accept losses, and incur liabilities.
(3) The terms on which membership interests are to be offered.
(4) The terms and conditions on all outstanding loans, mortgages,
trust deeds, pledges, or any other indebtedness or security interest.
(5) The extent of the holding in the limited liability company of
all underwriters, and their remuneration as compensation for
services, in the form of salary, wages, fees, or otherwise.
(6) The remuneration to persons other than managers or members in
excess of one hundred thousand dollars ($100,000) per annum.
(7) Bonus and profit-sharing arrangements.
(8) Management, consulting, and service contracts related to the
operation of controlled gambling.
(9) Options existing or to be created.
(10) Financial statements for at least three fiscal years
preceding the year of application, or, if the limited liability
company has not been in existence for a period of three years,
financial statements from the date of its formation. All financial
statements shall be prepared in accordance with generally accepted
accounting principles and audited by a licensee of the California
Board of Accountancy in accordance with generally accepted auditing
standards.
(11) Any further financial data that the department reasonably
deems necessary or appropriate for the protection of the state.
(12) An annual profit and loss
profit-and-loss statement, an annual balance sheet, and a copy
of its annual federal income tax return, within 30 calendar days
after the return is filed with the Internal Revenue Service.
SEC. 13. SEC. 14. Section 19892 of
the Business and Professions Code is amended to read:
19892. (a) The purported sale, assignment, transfer, pledge, or
other disposition of any interest in a partnership or limited
liability company that holds a gambling license, or the grant of an
option to purchase the interest, is void unless approved in advance
by the commission.
(b) If at any time the commission denies a license to, or revokes
the license of, an individual owner of any interest described in
subdivision (a), the commission shall immediately notify the
individual and the partnership or limited liability company of that
fact. The individual denied a license, or whose license is revoked,
shall sell his or her interest in an amount not greater than fair
market value, within 60 calendar days of the denial or revocation.
Upon a showing of due diligence, the commission may extend the time
for selling the security.
(c) Beginning upon the date when the commission serves a notice of
denial upon the partnership or limited liability company, it is
unlawful for the denied owner of the interest to do any of the
following:
(1) Receive any share of the revenue or interest upon the
partnership or limited liability company interest, except
distributions equal to the good faith estimate of the owner's
personal share of any income tax due on the ownership interest until
the date of the sale as determined in writing by an independent
certified public accountant.
(2) Exercise, directly or through any trustee or nominee, any
voting right conferred by that interest.
(3) Receive any remuneration in any form from the partnership, for
services rendered or for any other purpose.
(d) Every certificate of limited partnership of any limited
partnership or limited liability company holding a
gambling license shall contain a statement of the restrictions
imposed by this section.
SEC. 14. SEC. 15. Section 19893 of
the Business and Professions Code is amended to read:
19893. To the extent required by this chapter, general partners,
limited partners, lenders, members, managers, holders of evidence of
indebtedness, underwriters, agents, or employees of a partnership or
limited liability company that holds or applies for a license to own
a gambling enterprise shall be licensed individually. The partnership
or limited liability company shall require these persons to apply
for and obtain a gambling license. A person who is required to be
licensed by this section as a partner, manager, or member shall not
hold that position until he or she secures the required approval of,
or a temporary license issued by, the commission. A person who is
required to be licensed pursuant to a decision of the commission
shall apply for a license within 30 days after the commission
requests him or her to do so.
SEC. 15. SEC. 16. Section 19900 of
the Business and Professions Code is amended to read:
19900. (a) Except as may be provided by regulation of the
commission, the following security interests shall not be enforced
without the prior approval of the commission and compliance with
regulations adopted pursuant to subdivision (b):
(1) In a security issued by a corporation that is a holder of a
gambling license in this state.
(2) In a security issued by a holding company that is not a
publicly traded corporation.
(3) In a security issued by a partnership, limited partnership, or
limited liability company that is a holder of a gambling license in
this state.
(b) The commission shall adopt regulations establishing the
procedure for the enforcement of a security interest. Any remedy
provided by the regulations for the enforcement of the security
interest is in addition to any other remedy provided by law.
SEC. 16. SEC. 17. Section 19912 of
the Business and Professions Code is amended to read:
19912. (a) (1) A person shall not be employed as a gambling
enterprise employee, or serve as an independent agent, except as
provided in paragraph (2), unless he or she is the holder of one of
the following:
(A) A valid work permit issued in accordance with the applicable
ordinance or regulations of the county, city, or city and county in
which his or her duties are performed.
(B) A work permit issued by the commission pursuant to regulations
adopted by the commission for the issuance and renewal of work
permits. A work permit issued by the commission shall be valid for
two years.
(2) An independent agent is not required to hold a work permit if
he or she is not a resident of this state and has registered with the
department in accordance with regulations.
(b) A work permit shall not be issued by any city, county, or city
and county to any person who would be disqualified from holding a
state gambling license for the reasons specified in subdivisions (a)
to (g), inclusive, of Section 19859.
(c) The department may object to the issuance of a work permit by
a city, county, or city and county for any cause deemed reasonable by
the department, and if the department objects to issuance of a work
permit, the work permit shall be denied.
(1) The commission shall adopt regulations specifying particular
grounds for objection to issuance of, or refusal to issue, a work
permit.
(2) The ordinance of any city, county, or city and county relating
to issuance of work permits shall permit the department to object to
the issuance of any permit.
(3) Any person whose application for a work permit has been denied
because of an objection by the department may apply to the
commission for an evidentiary hearing in accordance with regulations.
(d) Application for a work permit for use in any jurisdiction
where a locally issued work permit is not required by the licensing
authority of a city, county, or city and county shall be made to the
commission, and may be granted or denied for any cause deemed
reasonable by the commission. If the commission denies the
application, it shall include in its notice of denial a statement of
facts upon which it relied in denying the application. Upon receipt
of an application for a work permit, the commission may issue a
temporary work permit for a period not to exceed 120 days, pending
completion of the background investigation by the department and
official action by the commission with respect to the work permit
application.
(e) An order of the commission denying an application for, or
placing restrictions or conditions on, a work permit, including an
order declining to issue a work permit following review pursuant to
paragraph (3) of subdivision (c), may be reviewed in accordance with
subdivision (e) of Section 19870.
SEC. 17. SEC. 18. Section 19921 of
the Business and Professions Code is amended to read:
19921. (a) No person under the age of 21 years
21 years of age shall be permitted to enter upon the
premises of a licensed gambling establishment, or any part thereof,
except the following:
(1) An area, physically separated from any gambling area, for the
exclusive purpose of dining. For purposes of this subdivision, any
place wherein food or beverages are dispensed primarily by vending
machines shall not constitute a place for dining.
(2) Restrooms.
(3) A supervised room that is physically separated from any
gambling area and used primarily for the purpose of entertainment or
recreation.
(4) A designated pathway to reach any of the areas described in
paragraphs (1) to (3), inclusive. To the extent that the designated
pathway requires an individual to enter upon or pass through the
gaming floor, all persons under 21 years of age shall be accompanied
by a person over 21 years of age or be in the presence of a gambling
establishment employee over 21 years of age.
(b) No person under 21 years of age shall be permitted to loiter
in a gaming area.
SEC. 18. SEC. 19. Section 19932 of
the Business and Professions Code is amended to read:
19932. (a) Any person aggrieved by a final decision or order of
the commission that limits, conditions, suspends, or revokes any
previously granted license or approval, made after hearing by the
commission, may petition the Superior Court for the County of
Sacramento for judicial review pursuant to Section 1094.5 of the Code
of Civil Procedure and Section 11523 of the Government Code.
Notwithstanding any other provision of law, the standard set forth in
paragraph (1) of subdivision (h) of Section 1094.5 of the Code of
Civil Procedure shall apply for obtaining a stay of the operation of
a final decision or order of the commission. In every case where it
is claimed that the findings are not supported by the evidence, abuse
of discretion is established if the court determines that the
findings are not supported by substantial evidence in light of the
whole record.
(b) The court may summarily deny the petition, or the court may
issue an alternative writ directing the commission to certify the
whole record in the case to the court within a time specified. No new
or additional evidence shall be introduced in the court, but, if an
alternative writ issues, the cause shall be heard on the whole record
as certified by the commission.
(c) In determining the cause following issuance of an alternative
writ, the court shall enter judgment affirming, modifying, or
reversing the order of the commission, or the court may remand the
case for further proceedings before, or reconsideration by, the
commission.
(d) Except as otherwise provided in Section 19870 and subdivision
(e) in Section 19912, this section provides the exclusive means to
review adjudicatory decisions of the commission.
SEC. 19. SEC. 20. Section 19941 of
the Business and Professions Code is amended to read:
19941. (a) A person under the age of 21 years
21 years of age shall not do any of the following:
(1) Play, be allowed to play, place wagers at, or collect winnings
from, whether personally or through an agent, any gambling game.
(2) Be employed as an employee in a licensed gambling
establishment except in a parking lot, coffee shop, restaurant,
business office, or other similar room, as determined by regulations,
wherein no gambling activity or activity directly associated with
gambling takes place.
(3) Present or offer to any licensee, or to an agent of a
licensee, any written, printed, or photostatic evidence of age and
identity that is false, fraudulent, or not actually his or her own
for the purpose of doing any of the things described in paragraphs
(1) and (2).
(4) Loiter in or about any room in which any gambling game is
operated or conducted.
(b) Any licensee or employee in a gambling establishment who
violates or permits the violation of paragraphs (1) to (3),
inclusive, of subdivision (a) is guilty of a misdemeanor.
(c) Any person under 21 years of age who violates this section is
guilty of a misdemeanor.
(d) Proof that a licensee, or agent or employee of a licensee,
demanded, was shown, and acted in reliance upon bona fide evidence of
age and identity shall be a defense to any criminal prosecution
under this section or to any proceeding for the suspension or
revocation of any license or work permit based thereon. For the
purposes of this section, "bona fide evidence of age and identity"
means a document issued by a federal, state, county, or municipal
government, or subdivision or agency thereof, including, but not
limited to, a motor vehicle operator's license or an identification
card issued to a member of the armed forces
Armed Forces , that contains the name, date of birth,
description, and picture of the person.
SEC. 20. SEC. 21. Section 19966 is
added to the Business and Professions Code, to read:
19966. If a gambling establishment is located in an
unincorporated area annexed by a city, notwithstanding Section 19960
or 19962, without a local election other than the election to approve
the annexation, the city acquiring jurisdiction may adopt an
ordinance permitting and regulating controlled gaming in the existing
gambling establishment, providing hours of operation, the games to
be played, wagering limits, the maximum number of gambling
establishments, and the maximum number of tables permitted in each
gambling establishment, the same as those limits in any ordinance or
resolutions that formerly applied to the gambling establishment.
Where this article refers to an expansion of gaming as compared to
that permitted on January 1, 1996, for the purposes of this section,
it that reference shall be to the
ordinance or resolutions that governed the gambling establishment as
of that date.
SEC. 21. SEC. 22. Section 19984 of
the Business and Professions Code is amended to read:
19984. Notwithstanding any other law, a licensed gambling
enterprise may contract with a third party for the purpose of
providing proposition player services at a gambling establishment,
subject to the following conditions:
(a) Any agreement, contract, or arrangement between a gambling
enterprise and a third-party provider of proposition player services
shall be approved in advance by the department, and in no event shall
a gambling enterprise or the house have any interest, whether direct
or indirect, in funds wagered, lost, or won.
(b) The commission shall establish reasonable criteria for, and
require the licensure and registration of, any person or entity that
provides proposition player services at gambling establishments
pursuant to this section, including owners, supervisors, and players.
Those employed by a third-party provider of proposition player
services, including owners, supervisors, observers, and players,
shall wear a badge which clearly identifies them as proposition
players whenever they are present within a gambling establishment.
The commission may impose licensing requirements, disclosures,
approvals, conditions, or limitations as it deems necessary to
protect the integrity of controlled gambling in this state, and may
assess and collect reasonable fees and deposits as necessary to
defray the costs of providing this regulation and oversight.
(c) The department, pursuant to regulations of the commission, is
empowered to perform background checks, financial audits, and other
investigatory services as needed to assist the commission in
regulating third party providers of proposition player services, and
may assess and collect reasonable fees and deposits as necessary to
defray the costs of
providing this regulation and oversight. The department may adopt
emergency regulations in order to implement this subdivision.
(d) No agreement or contract between a licensed gambling
enterprise and a third party concerning the provision of proposition
player services shall be invalidated or prohibited by the department
pursuant to this section until the commission establishes criteria
for, and makes determinations regarding the licensure or registration
of, the provision of these services pursuant to subdivision (b).
SEC. 22. SEC. 23. 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.
