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AB-779 Gambling establishments.(2017-2018)

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Date Published: 04/21/2017 04:00 AM
AB779:v97#DOCUMENT

Amended  IN  Assembly  April 20, 2017
Amended  IN  Assembly  March 23, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 779


Introduced by Assembly Member Burke

February 15, 2017


An act to amend Sections 19805, 19850, 19854, 19857, and 19859 and 19857 of the Business and Professions Code, relating to gambling.


LEGISLATIVE COUNSEL'S DIGEST


AB 779, as amended, Burke. Gambling establishments.
Existing law, the Gambling Control Act, provides for the licensure and regulation of various legalized gambling activities and establishments by the California Gambling Control Commission and the Department of Justice. The act prohibits the commission from issuing a gambling license unless it is satisfied that the applicant, among other things, is a person of good character, honesty, and integrity. The act establishes criminal penalties for a violation of specific provisions.
This bill would modify definitions establishing certain classifications of employees of gambling establishments and specific requirements for their licenses. The bill would authorize, rather than require, the commission to deny a license to an applicant for specific reasons, including, among others, conviction of a felony or being less than 21 years of age. The bill would prohibit requiring a key employee to be on the premises of a gambling establishment while the establishment is open to the public, if certain conditions are met. The bill would also specify that the commission is prohibited from issuing a gambling license unless it is satisfied that the applicant is a person of good moral character, honesty, and integrity. The bill would state the Legislature’s intent to provide comprehensive reforms to the Gambling Control Act by this measure.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature intends this act to provide comprehensive reforms to the Gambling Control Act relating to the licensing of gambling establishments, streamlining the licensing process, and allowing additional resources to be devoted to regulation and oversight of the gambling industry.

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 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 by a gambling establishment who is licensed to conduct any controlled game, including, without limitation, dealers, floor personnel, security employees, countroom personnel, cage personnel, collection personnel, surveillance personnel. personnel, data processing personnel, and maintenance personnel. A “gambling enterprise employee” shall not include an employee whose duties do not involve gaming activities, including, but not limited to, a cocktail server, bartender, janitorial worker, or other person engaged exclusively in preparing or serving food or beverages.
(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 and 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, key employee 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 19850 of the Business and Professions Code is amended to read:

19850.
 Except as otherwise provided in this chapter, it is unlawful for a person, either as owner, lessee, or employee, whether for hire or not, either solely or in conjunction with others, to deal, operate, carry on, conduct, maintain, or expose for play any controlled game in this state, or to receive, directly or indirectly, any compensation or reward, or any percentage or share of the money or property played for keeping, running, or carrying on any controlled game in this state, without having applied for and obtained from the commission, and thereafter maintain, a valid state gambling license, key employee license, or registration permit, as specified in this chapter. In any criminal prosecution for violation of this section, the punishment shall be as provided in Section 337j of the Penal Code.

SEC. 4.Section 19854 of the Business and Professions Code is amended to read:
19854.

(a)Every key employee shall apply for and obtain a key employee license.

(b)No person may be issued a key employee license unless the person would qualify for a state gambling license.

(c)(1)Except as provided in paragraph (2), a key employee license shall entitle the holder to work as a key employee in any key employee position at any gambling establishment, provided that the key employee terminates employment with one gambling establishment before commencing work for another.

(2)Notwithstanding paragraph (1), a key employee with a valid personal portable license may work as a key employee in any key employee position in more than one gambling establishment.

(d)The commission shall establish a program for portable personal licenses for key employees, as well as a process by which valid key employee licenses then in effect shall be converted to personal portable licenses. The commission may, as part of that process, establish a fee to be paid by a key employee when seeking a personal portable license.

(e)A gambling establishment shall not be required to have a key employee on the premises at all times the gambling establishment is open to the public. If a key employee is not on the premises while the gambling establishment is open to the public, a gambling establishment shall designate which owner or employee is responsible for and has authority to ensure compliance with this chapter and the regulations of the commission and the department.

SEC. 5.SEC. 4.

 Section 19857 of the Business and Professions Code is amended to read:

19857.
 No gambling license shall be issued unless, based on all of the information and documents submitted, the commission is satisfied that the applicant is all of the following:
(a) A person of good moral character, honesty, and integrity.
(b) A person whose prior activities, criminal record, if any, reputation, habits, and associations do not pose a threat to the public interest of this state, or to the effective regulation and control of controlled gambling, or create or enhance the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the conduct of controlled gambling or in the carrying on of the business and financial arrangements incidental thereto.
(c) A person that is in all other respects qualified to be licensed as provided in this chapter.

SEC. 6.Section 19859 of the Business and Professions Code is amended to read:
19859.

The commission may deny a license to any applicant who is disqualified for any of the following reasons:

(a)Failure of the applicant to clearly establish eligibility and qualification in accordance with this chapter.

(b)Failure of the applicant to provide information, documentation, and assurances required by this chapter or requested by the chief, or failure of the applicant to reveal any fact material to qualification, or the supplying of information that is untrue or misleading as to a material fact pertaining to the qualification criteria.

(c)Conviction of a felony, including a conviction by a federal court or a court in another state for a crime that would constitute a felony if committed in California.

(d)Conviction of the applicant for any misdemeanor involving dishonesty or moral turpitude within the 10-year period immediately preceding the submission of the application, unless the applicant has been granted relief pursuant to Section 1203.4, 1203.4a, or 1203.45 of the Penal Code; provided, however, that the granting of relief pursuant to Section 1203.4, 1203.4a, or 1203.45 of the Penal Code shall not constitute a limitation on the discretion of the commission under Section 19856 or affect the applicant’s burden under Section 19857.

(e)Association of the applicant with criminal profiteering activity or organized crime, as defined by Section 186.2 of the Penal Code.

(f)Contumacious defiance by the applicant of any legislative investigatory body, or other official investigatory body of any state or of the United States, when that body is engaged in the investigation of crimes relating to gambling; official corruption related to gambling activities; or criminal profiteering activity or organized crime, as defined by Section 186.2 of the Penal Code.

(g)The applicant is less than 21 years of age.