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AB-1321 Gambling establishments.(2021-2022)

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Date Published: 02/20/2021 04:00 AM
AB1321:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1321


Introduced by Assembly Member Lackey

February 19, 2021


An act to amend Sections 19841, 19862, and 19961 of, to repeal Section 19961.06 of, and to repeal and add Section 19965 of, the Business and Professions Code, relating to gambling.


LEGISLATIVE COUNSEL'S DIGEST


AB 1321, as introduced, Lackey. 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 investigation and enforcement of those activities and establishments by the Department of Justice.
Existing law prohibits, until January 1, 2023, the governing body and the electors of a city, county, or city and county that has not authorized legal gaming within its boundaries prior to January 1, 1996, from authorizing legal gaming. Existing law also prohibits, until January 1, 2023, an ordinance in effect on January 1, 1996, that authorizes legal gaming within a city, county, or city and county from being amended to expand gaming in that jurisdiction beyond that permitted on that effective date.
This bill would exclude an increase in the number of tables authorized in existing gambling establishments from the prohibition on expansion of gaming and would explicitly authorize a city, county, or city and county to expand, by ordinance, the number of tables permitted in a gambling establishment.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 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 manner of application and registration.
(2) Prescribe the information to be furnished by any an 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 that 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 this subdivision does not limit the department’s authority to require audits of any an 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 an 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, 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. 2.

 Section 19862 of the Business and Professions Code is amended to read:

19862.
 (a)In addition to other grounds stated in this chapter, the commission may deny a gambling license for any of the following reasons:

(1)

(a) If issuance of the license with respect to the proposed gambling establishment or expansion would tend unduly to create law enforcement problems in a city, county, or city and county other than the city, county, or city and county that has regulatory jurisdiction over the applicant’s premises.

(2)

(b) If an applicant fails to conduct an economic feasibility study that demonstrates to the satisfaction of the commission that the proposed gambling establishment will be economically viable, and that the owners have sufficient resources to make the gambling establishment successful. The commission shall hold a public hearing for the purpose of reviewing the feasibility study. All papers, studies, projections, pro formas, and other materials filed with the commission pursuant to an economic feasibility study are public records and shall be disclosed to all interested parties.

(3)

(c) If issuance of the license is sought in respect to a new gambling establishment, or the expansion of an existing gambling establishment, establishment that is to be located or is located near an existing school, an existing building used primarily as a place of worship, an existing playground or other area of juvenile congregation, an existing hospital, convalescence facility, or near another similarly unsuitable area, as determined by regulation of the commission, which is located in a city, county, or city and county other than the city, county, or city and county that has regulatory jurisdiction over the applicant’s gambling premises.

(b)For the purposes of this section, “expansion” means an increase of 25 percent or more in the number of authorized gambling tables in a gambling establishment, based on the number of gambling tables for which a license was initially issued pursuant to this chapter.

SEC. 3.

 Section 19961 of the Business and Professions Code is amended to read:

19961.
 (a) (1) Except as provided in paragraph (2), on or after the effective date of this chapter, January 1, 1998, any amendment to any ordinance that would result in an expansion of gambling in the city, county, or city and county, shall not be valid unless the amendment is submitted for approval to the voters of the city, county, or city and county, and is approved by a majority of the electors voting thereon.
(2) Notwithstanding paragraph (1) and Section 19962, an ordinance may be amended without the approval of the electors after the effective date of this chapter January 1, 1998, to expand gambling by a change that results in an increase of less than 25 percent with respect to any of the matters set forth in paragraphs (1), (2), (3), (1) and (5) (3) of subdivision (b). Thereafter, any additional expansion shall be approved by a majority of the electors voting thereon.
(b) For the purposes of this article, “expansion of gambling” means, when compared to that authorized on January 1, 1996, or under an ordinance adopted pursuant to subdivision (a) of Section 19960, whichever is the lesser number, a change that results in any of the following:

(1)An increase of 25 percent or more in the number of gambling tables in the city, county, or city and county.

(2)

(1) An increase of 25 percent or more in the number of licensed card rooms in the city, county, or city and county.

(3)An increase of 25 percent or more in the number of gambling tables that may be operated in a gambling establishment in the city, county, or city and county.

(4)

(2) The authorization of any additional form of gambling, other than card games, that may be legally played in this state, to be played at a gambling establishment in the city, county, or city and county.

(5)

(3) An increase of 25 percent or more in the hours of operation of a gambling establishment in the city, county, or city and county.
(c) The measure to expand gambling shall appear on the ballot in substantially the following form: “Shall gambling be expanded in ____ beyond that operated or authorized on January 1, 1996, by ____ (describe expansion) Yes ____ No ____.”
(d) The authorization of subdivision (c) is subject to Sections 19962 and 19963 until those sections are repealed.
(e) Increasing the number of games offered in a gambling establishment does not constitute an expansion of gambling pursuant to this section.
(f) No A city, county, or city and county shall not amend its ordinance in a cumulative manner to increase gambling by more than 25 percent for the factors listed in subdivision (b), when compared to that authorized on January 1, 1996, without conducting an election pursuant to this section.

SEC. 4.

 Section 19961.06 of the Business and Professions Code is repealed.
19961.06.

(a)Notwithstanding Sections 19961 and 19962, a city, county, or city and county may amend an ordinance to increase by two the number of gambling tables that may be operated in a gambling establishment in the city, county, or city and county, above the number of tables authorized in the ordinance that was in effect on January 1, 2010. A city, county, or city and county may exercise the authority provided by this subdivision only one time, but this authority shall be in addition to any authorization under any other law for a city, county, or city and county to increase the number of gambling tables that may be operated in a gambling establishment in the city, county, or city and county.

(b)Notwithstanding Sections 19961 and 19962, and in addition to the authorization granted by subdivision (a), a city, county, or city and county may amend an ordinance to increase by two the number of gambling tables that may be operated in a gambling establishment in the city, county, or city and county, above the number of tables authorized in the ordinance that was in effect on January 1, 2013. A city, county, or city and county may exercise the authority provided by this subdivision only one time, but this authority shall be in addition to any authorization under any other law for a city, county, or city and county to increase the number of gambling tables that may be operated in a gambling establishment in the city, county, or city and county.

SEC. 5.

 Section 19965 of the Business and Professions Code is repealed.
19965.

Notwithstanding Sections 19961 and 19962, a city, county, or city and county may amend an ordinance to increase the number of gambling tables that may be operated in a gambling establishment as follows:

(a)If the ordinance in effect on July 1, 2007, provided for five to eight tables, inclusive, the amended ordinance may allow an increase of three tables.

(b)If the ordinance in effect on July 1, 2007, provided for nine to 12 tables, inclusive, the amended ordinance may allow an increase of four tables.

SEC. 6.

 Section 19965 is added to the Business and Professions Code, to read:

19965.
 Notwithstanding Sections 19961 and 19962, a city, county, or city and county may amend an ordinance to increase the number of gambling tables that may be operated in a gambling establishment.