AB 317 Gambling Control Act: gambling establishments. BILL NUMBER: AB 317 AMENDED 09/03/99 BILL TEXT AMENDED IN SENATE SEPTEMBER 3, 1999 AMENDED IN SENATE AUGUST 23, 1999 AMENDED IN SENATE AUGUST 19, 1999 AMENDED IN SENATE JUNE 30, 1999 AMENDED IN ASSEMBLY MAY 13, 1999 AMENDED IN ASSEMBLY MAY 6, 1999 INTRODUCED BY Assembly Member Floyd FEBRUARY 8, 1999 An act to amend Sections 19801, 19805, {- and 19940 -} {+ 19940, 19950, and 19950.1 +} of, and to add Article 15 (commencing with Section 19970) and Article 16 (commencing with Section 19980) to Chapter 5 of Division 8 of, the Business and Professions Code, and to amend Sections 186.9, 330, 337j, and 14161 of, and to add Sections 337k, 337l, and 337m to, the Penal Code, relating to gambling. LEGISLATIVE COUNSEL'S DIGEST AB 317, as amended, Floyd. Gambling Control Act: gambling establishments. Existing law provides that every person who deals, plays, or carries on, opens, or causes to be opened, or who conducts, either as owner or employer, whether for hire or not, any of a list of specified gambling games, including the game of twenty-one, or any banking or percentage game played with cards, dice, or any device, for money, checks, credit, or any representative of value, and any person who plays or bets at or against such a game, is guilty of a misdemeanor and punishable as specified. This bill would remove the game of twenty-one from these prohibitions, narrow the prohibition on banking games to house-banked games only, and provide that notwithstanding these prohibitions, a licensed owner of a gambling establishment, upon approval by the Gambling Control Commission and the Division of Gambling Control, may deal, play, or carry on, open or cause to be opened, at the gambling establishment, the game commonly known as blackjack or twenty-one as a player-pool banked game. With regard to twenty-one games played at gambling establishments, this bill would require the owner of a gambling establishment to provide patrons with ample notice of the rules, would allow the owner to collect fees on twenty-one games in accordance with existing rules, would double the fees for issuance or renewal of a state gambling license based on the number of twenty-one tables, and would provide that twenty-one may be played at a limited number of the gambling establishment' s tables, as specified. This bill would also provide that notwithstanding restrictions in existing law, the licensed owner of a gambling establishment may operate any controlled game as either a player-banked game, or as a player-pool banked game, except for blackjack or twenty-one which would be required to be played exclusively as a player-pool banked game. With respect to player-pool banked games, the bill would impose specified restrictions on the use of the funds in the player pool, would prohibit any person other than the owner or on-duty employee of a gambling establishment from participating as a player-banker or dealer, and would impose specified accounting practices on funds deposited in and withdrawn from the player-pool, with specified reports required to be sent to the division. The bill would authorize the owner of a gambling establishment to extend an interest-free loan to initiate a pool {- , to withdraw each month an amount not to exceed 5% of the average daily balance of the player-pool to offset the costs of maintaining the player-pool and meeting reporting requirements, and to withdraw each month an amount not to exceed 2% of the average daily balance of the player-pool to offset in-house promotional activities as specified -} {+ , but would provide that in no event shall any of the funds on the player-pool account or accounts be accessed by the owner +} . The bill would also provide that if a gambling establishment ceases to offer player-pool banked games for play, all funds remaining in a player pool shall be forwarded to the Gambling Control Fund for use by the commission and division in discharging their duties and responsibilities under the act. By imposing additional requirements on persons and entities subject to the Gambling Control Act, the violation of which would be punishable as a misdemeanor, this bill would impose a state-mandated local program. The bill would also make various conforming changes to implement these provisions. {+ Existing law generally provides that no local jurisdiction may adopt a new ordinance authorizing gambling, and no local jurisdiction may amend an existing ordinance to expand gambling, until January 1, 2001, or in the case of Alameda, Contra Costa, Los Angeles, San Mateo, and Santa Clara counties, until January 1, 2003. Existing law also provides that after this date, (1) no city, county, or city and county may issue a gambling license with respect to a gambling establishment unless one of three specified conditions is satisfied, including that a majority of the voters has approved a measure permitting gambling, and (2) any amendment to a gambling ordinance which would result in an expansion of gaming, as defined, shall not be valid unless submitted to and adopted by a majority of the voters of the city, county, or city and county. This bill would require two-thirds of the voters to approve such a measure or ordinance. This bill would provide that it shall only become operative if an amendment to the California Constitution that expands authorized gaming operations by Native American tribes is approved by the voters at the March 2000 election. +} 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. SECTION 1. Section 19801 of the Business and Professions Code is amended to read: 19801. The Legislature hereby finds and declares all of the following: (a) The longstanding public policy of this state disfavors the business of gambling. State law prohibits commercially operated lotteries, house-banked games, percentage games, and gambling machines, and strictly regulates parimutuel wagering on horse racing. To the extent that state law categorically prohibits certain forms of gambling and prohibits gambling devices, nothing herein shall be construed, in any manner, to reflect a legislative intent to relax those prohibitions. (b) Gambling can become addictive and is not an activity to be promoted or legitimized as entertainment for children and families. (c) (1) Unregulated gambling enterprises are inimical to the public health, safety, welfare, and good order. Accordingly, no person in this state has a right to operate a gambling enterprise except as may be expressly permitted by the laws of this state and by the ordinances of local governmental bodies. (2) The State of California has permitted the operation of gambling establishments for more than one hundred years. Gambling establishments were first regulated by the State of California pursuant to legislation which was enacted in 1984. Gambling establishments currently employ more than twenty thousand people in the State of California, and contribute more than one hundred million dollars in taxes and fees to California' s government. Gambling establishments are lawful enterprises in the State of California, and are entitled to full protection of the laws of this state. The industry is currently in significant decline, with more than half the gambling establishments in this state closing within the past four years. (d) It is the policy of this state that gambling activities that are not expressly prohibited or regulated by state law may be prohibited or regulated by local government. Moreover, it is the policy of this state that no new gambling establishment may be opened in a city, county, or city and county in which a gambling establishment was not operating on and before January 1, 1984, except upon the affirmative vote of the electors of that city, county, or city and county. (e) It is not the purpose of this chapter to expand opportunities for gambling, or to create any right to operate a gambling enterprise in this state or to have a financial interest in any gambling enterprise. Rather, it is the purpose of this chapter to regulate businesses that offer otherwise lawful forms of gambling games. (f) Public trust that permissible gambling will not endanger public health, safety, or welfare requires that comprehensive measures be enacted to ensure that such gambling is free from criminal and corruptive elements, that it is conducted honestly and competitively, and that it is conducted in suitable locations. (g) Public trust and confidence can only be maintained by strict and comprehensive regulation of all persons, locations, practices, associations, and activities related to the operation of lawful gambling establishments and the manufacture or distribution of permissible gambling equipment. (h) All gambling operations, all persons having a significant involvement in gambling operations, all establishments where gambling is conducted, and all manufacturers, sellers, and distributors of gambling equipment must be licensed and regulated to protect the public health, safety, and general welfare of the residents of this state as an exercise of the police powers of the state. (i) To ensure that gambling is conducted honestly, competitively, and free of criminal and corruptive elements, all licensed gambling establishments in this state must remain open to the general public and the access of the general public to licensed gambling activities must not be restricted in any manner, except as provided by the Legislature. However, subject to state and federal prohibitions against discrimination, nothing herein shall be construed to preclude exclusion of unsuitable persons from licensed gambling establishments in the exercise of reasonable business judgment. (j) In order to effectuate state policy as declared herein, it is necessary that gambling establishments, activities, and equipment be licensed, that persons participating in those activities be licensed or registered, that certain transactions, events, and processes involving gambling establishments and owners of gambling establishments be subject to prior approval or permission, that unsuitable persons not be permitted to associate with gambling activities or gambling establishments, and that gambling activities take place only in suitable locations. Any license or permit issued, or other approval granted pursuant to this chapter, is declared to be a revocable privilege, and no holder acquires any vested right therein or thereunder. (k) The location of lawful gambling premises, the hours of operation of those premises, the number of tables permitted in those premises, and wagering limits in permissible games conducted in those premises are proper subjects for regulation by local governmental bodies. However, consideration of those same subjects by a state regulatory agency, as specified in this chapter, is warranted when local governmental regulation respecting those subjects is inadequate or the regulation fails to safeguard the legitimate interests of residents in other governmental jurisdictions. (l) The exclusion or ejection of certain persons from gambling establishments is necessary to effectuate the policies of this chapter and to maintain effectively the strict regulation of licensed gambling. (m) Records and reports of cash and credit transactions involving gambling establishments may have a high degree of usefulness in criminal and regulatory investigations and, therefore, licensed gambling operators may be required to keep records and make reports concerning significant cash and credit transactions. 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 commercial player-bank enterprise license, 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 division is required or permitted under this chapter. (c) "Bank" or "banked" means the reservoir of money from which winnings are paid to the players of a hand or round, and into which all losses that are collected from those players are deposited. (d) "Board" means the California Gambling Control Board. {- (e) "Commercial player-bank enterprise" means any enterprise, undertaking, or endeavor that has as one of its purposes the maintenance of a player-bank through the engagement and financing of one or more contract players in player-banked games in this state. A commercial player-bank enterprise does not include a friend or relative who finances a player on a purely limited and social basis, as defined by regulation of the commission, nor does it include any natural person to whom the following apply: (1) the person is playing with his or her own funds (2) the person retains all of his or her winnings and absorbs all of his or her losses, and (3) the person is not paid any type of consideration by another person to participate in the play of a controlled game, except in the case of consideration paid to a proposition player in connection with his or her employment by a gambling establishment. (f) "Commercial player-bank enterprise license" means any license issued pursuant to this chapter that authorizes the person named therein to operate a commercial player-bank enterprise. (g) -} {+ (e) +} "Commission" means the California Gambling Control Commission. {- (h) "Contract player" means a person who is engaged or financed by a commercial player-bank enterprise for the purpose of playing in a controlled game. A licensed commercial player-bank enterprise shall ensure that every contract player it employs that plays in a controlled game is clearly identified as a contract player to every other player participating in that game. (i) -} {+ (f) +} "Controlled gambling" means to deal, operate, carry on, conduct, maintain, or expose for play any controlled game. {- (j) -} {+ (g) +} "Controlled game" means any controlled game, as defined by subdivision (e) of Section 337j of the Penal Code. {- (k) -} {+ (h) +} "Director," when used in connection with a corporation, means any director of a corporation or any person performing similar functions with respect to any organization. In any other case, "director" means the Director of the Division of Gambling Control. {- (l) -} {+ (i) +} "Division" means the Division of Gambling Control in the Department of Justice. {- (m) -} {+ (j) +} "Finding of suitability" means a finding that a person meets the qualification criteria described in subdivisions (a) and (b) of Section 19848, and that the person would not be disqualified from holding a state gambling license on any of the grounds specified in subdivision (a) of Section 19850. {- (n) -} {+ (k) +} "Game" and "gambling game" means any controlled game. {- (o) -} {+ (l) +} "Gambling" means to deal, operate, carry on, conduct, maintain, or expose for play any controlled game. {- (p) -} {+ (m) +} "Gambling enterprise employee" means any natural person employed in the operation of a gambling enterprise, including, without limitation, dealers, floormen, 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. {- (q) -} {+ (n) +} "Gambling establishment," "establishment," or "licensed premises" means one or more rooms where any controlled gambling occurs. {- (r) -} {+ (o) +} "Gambling license" or "state gambling license" means any license issued by the state that authorizes the person named therein to conduct a gambling operation. {- (s) -} {+ (p) +} "Gambling operation" means exposing for play one or more controlled games that are dealt, operated, carried on, conducted, or maintained for commercial gain. {- (t) -} {+ (q) +} "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. {- (u) -} {+ (r) +} "House-banked game" means any game in which the licensed owner of a gambling establishment maintains or operates a bank in a controlled game for the benefit of any person or entity other than the player pool. {- (v) -} {+ (s) +} "Independent agent," except as provided by regulation, means any person who does either of the following: (1) Approves or grants the extension of gambling credit on behalf of a gambling licensee or 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. {- (w) -} {+ (t) +} "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 such other persons as the board may determine for reasons consistent with the policies of this chapter. {- (x) -} {+ (u) +} "Key employee" means any natural person employed in the operation of a gambling enterprise in 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 division for reasons consistent with the policies of this chapter. "Key employee" also includes any person who is employed as an onsite supervisor, observer, or monitor, or who is employed as a contract player, for a commercial player-bank enterprise. {- (y) -} {+ (v) +} "Key employee license" means a state license authorizing the holder to be associated with a gambling enterprise as a key employee. {- (z) -} {+ (w) +} "Licensed gambling establishment" means the gambling premises encompassed by a state gambling license. {- (aa) -} {+ (x) +} "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. {- (bb) -} {+ (y) +} "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. {- (cc) -} {+ (z) +} "Owner licensee" means an owner of a gambling enterprise who holds a state gambling license. {- (dd) -} {+ (aa) +} "Person," unless otherwise indicated, includes a natural person, corporation, partnership, limited partnership, trust, joint venture, association, or any other business organization. {- (ee) -} {+ (bb) +} "Player" means a patron of a gambling establishment who participates in a controlled game. {- (ff) -} {+ (cc) +} "Player-banked game" means any game in which the opportunity to maintain or operate a bank rotates to all seated players in the game. {- (gg) -} {+ (dd) +} "Player-pool banked game" means any game in which the bank is maintained or operated by the licensed owner of the gambling establishment for the sole and exclusive benefit of the player-pool. {- (hh) -} {+ (ee) +} "Proposition player" means a person associated with a gambling establishment as a contractor or employee who participates in the play of the game, as provided in this chapter, in order to attract business, and who is not an owner or employee of a commercial player-bank enterprise. The licensed owner of a gambling establishment shall ensure that every proposition player he or she engages that plays in a controlled game is clearly identified as a proposition player to every other player participating in that game. {- (ii) -} {+ (ff) +} "Publicly traded racing association" means a corporation licensed to conduct horseracing and simulcast wagering pursuant to Chapter 4 (commencing with Section 19400) whose stock is publicly traded. {- (jj) -} {+ (gg) +} "Qualified racing association" means a corporation licensed to conduct horseracing 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. {- (kk) -} {+ (hh) +} "Work permit" means any card, certificate, or permit issued by the division 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 19940 of the Business and Professions Code is amended to read: 19940. (a) All fines and penalties collected pursuant to this chapter shall be deposited in a special account in the General Fund, and, upon appropriation, may be expended by the Department of Justice to offset costs incurred pursuant to this chapter. (b) Except as otherwise provided in subdivision (a), all fees, revenue, and transfers collected pursuant to this chapter shall be deposited in the Gambling Control Fund, which is hereby created in the State Treasury. Notwithstanding Section 13340 of the Government Code, five million four hundred thousand dollars ($5,400,000) of the funds deposited in the Gambling Control Fund shall be available, upon appropriation by the Legislature, to the Department of Justice each fiscal year, commencing with the 1998-99 fiscal year, for expenditure by the division and commission exclusively for the support of the division and commission in carrying out their duties and responsibilities under this chapter. SEC. 4. {+ Section 19950 of the Business and Professions Code is amended to read: +} 19950. This chapter shall not prohibit the enactment, amendment, or enforcement of any ordinance by any city, county, or city and county relating to licensed gambling establishments that is not inconsistent with this chapter. On and after the effective date of this chapter, no city, county, or city and county shall issue a gambling license with respect to any gambling establishment unless one of the following is true: (a) The gambling establishment is located in a city, county, or city and county wherein, after January 1, 1984, an ordinance was adopted by the electors of the city, county, or city and county, in an election conducted pursuant to former Section 19819 of the Business and Professions Code, as that section read immediately before its repeal by the act that enacted this chapter. (b) The gambling establishment is located in a city, county, or city and county wherein, prior to January 1, 1984, there was in effect an ordinance that expressly authorized the operation of one or more cardrooms. (c) After the effective date of this chapter, {- a majority -} {+ two-thirds +} of the electors voting thereon affirmatively approve a measure permitting controlled gambling within that city, county, or city and county. (1) The measure to permit controlled gambling shall appear on the ballot in substantially the following form: "Shall licensed gambling establishments in which any controlled games permitted by law, such as draw poker, low-ball poker, panguine (pan), seven-card stud, or other lawful card games or tile games, are played, be allowed in _____? Yes ____ No ____." (2) In addition, the initial implementing ordinances shall be drafted and appear in full on the sample ballot and shall set forth at least all of the following: (A) The hours of operation. (B) The games to be played. (C) The wagering limits. (D) The maximum number of gambling establishments permitted by the ordinance. (E) The maximum number of tables permitted in each gambling establishment. {+ SEC. 5. Section 19950.1 of the Business and Professions Code is amended to read: +} 19950.1. (a) On or after the effective date of this chapter, 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 -} {+ two-thirds +} of the electors voting thereon. An ordinance may be amended without the approval of the electors one time on or after the effective date of this chapter 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), (5), and (6) of subdivision (b). Thereafter, any additional expansion shall be approved by a {- a majority -} {+ two-thirds +} of the electors voting thereon. This subdivision does not apply to a licensed gambling establishment with five or fewer tables. (b) For the purposes of this section, "expansion of gambling" means, when compared to that authorized on January 1, 1996, or under an ordinance adopted pursuant to subdivision (a) of Section 19851, 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) 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) 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) An increase of 25 percent or more in the hours of operation of a gambling establishment in the city, county, or city and county. (6) An increase of 25 percent or more in the maximum amount permitted to be wagered in a game. (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 ____." {+ SEC. 6. +} Article 15 (commencing with Section 19970) is added to Chapter 5 of Division 8 of the Business and Professions Code, to read: Article 15. Twenty-One 19970. Upon approval by the commission and division, and subject to Section 19980, the licensed owner of a gambling establishment may deal, play, or carry on, open or cause to be opened, at the gambling establishment, the game commonly known as blackjack or twenty-one, the object of which is for a player to obtain a higher total card count that the dealer by reaching 21, or as close to 21 as possible without going over that number. 19970.1. The owner of a gambling establishment shall provide ample notice of the rules for the game of twenty-one, as approved for play at the gambling establishment by the commission and division, to the patrons of the gambling establishment, subject to regulations of the commission and division. 19970.2. The maximum number of tables at which the game of twenty-one may be offered for play at a gambling establishment shall be limited by the number of tables the gambling establishment is authorized to operate, as follows: (a) A gambling establishment authorized to operate a total of one to four tables, inclusive, may operate one table where twenty-one is played. (b) A gambling establishment authorized to operate a total of five to nine tables may operate up to two tables where twenty-one is played. (c) A gambling establishment authorized to operate a total of 10 to 19, inclusive, tables may operate up to four tables where twenty-one is played. (d) A gambling establishment authorized to operate a total of 20 to 39, inclusive, tables may operate up to six tables where twenty-one is played. (e) A gambling establishment authorized to operate a total of 40 to 59, inclusive, tables may operate up to eight tables where twenty-one is played. (f) A gambling establishment authorized to operate a total of 60 or more tables may operate up to 20 tables where twenty-one is played. 19970.3. The fees for issuance or renewal of a state gambling license, which are based upon the number of tables that are authorized to be operated at a gambling establishment as specified in Section 19941, shall be doubled with respect to tables where twenty-one is played. 19970.4. The owner of a gambling establishment may collect a fee from each person playing twenty-one in a manner that complies with Section 337j of the Penal Code. SEC. 18. Article 16 (commencing with Section 19980) is added to Chapter 5 of Division 8 of the Business and Professions Code, to read: Article 16. Banked Games 19980. (a) The licensed owner of a gambling establishment may elect to operate a controlled game in one of two ways. The game may either be player-pool banked or player-banked, except for blackjack or twenty-one, which shall be played exclusively as a player-pool banked game. A game shall not be played if the rules of the game would allow the game to be banked in any other manner. (b) If the licensed owner of a gambling establishment elects to operate a controlled game as a player-pool banked game, then: (1) The game shall not be played if the rules of the game would allow an owner or on-duty employee of the gambling establishment to participate in the play of the game for the benefit of any owner. An owner or on-duty employee of the gambling establishment shall participate in the play of the game solely as a player-banker and dealer, and this participation shall be limited to only dealing the cards and playing for the benefit of the player-pool. Notwithstanding the foregoing, one or more proposition players may participate in the game solely for the purpose of attracting business or stimulating the action. (2) The game shall not be played if the rules of the game would allow any person other than an owner or on-duty employee of the gambling establishment to participate as a player-banker or dealer. 19981. If the licensed owner of a gambling establishment elects to operate a controlled game as a player-pool banked game, then the player-pool shall be a pool of money that is used as the bank in the play of the game. The player-pool shall be the only pool of money from which all winnings are paid to players of a game and into which all losses collected from players are deposited. An owner or on-duty employee of the gambling establishment shall participate in the game as the player-banker and dealer exclusively on behalf of, and for the benefit of, the player-pool. If for any reason the gambling establishment ceases to offer player-pool banked games for play, all remaining funds in the player-pool at the time of the cessation of play shall be forwarded to the Gambling Control Fund for use by the division and commission in discharging their duties and responsibilities under the Gambling Control Act. 19981.1. If the licensed owner of a gambling establishment elects to operate a controlled game as a player-pool banked game, then the following requirements shall apply to the player-pool: (a) The licensed owner of the gambling establishment shall maintain a separate, interest-bearing account or accounts for the benefit and security of the player-pool. All moneys attributable to the player-pool shall be kept in this account or accounts. It is from this account or accounts that all winnings are paid to players of player-pool banked games and into which are deposited all losses collected from those players. This account or accounts shall not be used or considered as an asset of any licensed owner of a gambling establishment, nor may these funds be used as security, hypothecated, or encumbered, in any fashion or for any reason whatsoever. {- (b) The funds in the player-pool account or accounts shall be used by the licensed owner of a gambling establishment only for the purpose of paying winnings to players in player-pool banked games -} {+ (b) Under no conditions shall any of the funds in the player-pool account or accounts be accessed by the licensed owner of a gambling establishment +} , except as follows: (1) {+ To pay winnings to players in player-pool banked games. (2) +} To initiate the player-pool, the licensed owner of the gambling establishment may extend an interest-free, unsecured loan to the player-pool, which shall be deposited into the player-pool account or accounts. Payments from a player-pool account on that loan shall not commence unless and until the balance in the player-pool account is equal to at least 200 percent of the amount of the loan. A loan to initiate a player-pool shall not be made by any person other than the licensed owner of the gambling establishment, and any terms of such a loan that contradict or attempt to circumvent any of the requirements, restrictions, or provisions of this chapter shall be null and void. {- (2) The licensed owner of the gambling establishment may collect from a player-pool account a fee to help offset the costs of maintaining the player-pool account and meeting the reporting requirements of this article. Such a fee shall not be collected more frequently than once per month and shall not exceed 5 percent of the player-pool account's average daily balance for the month in which the fee is collected. (3) The licensed owner of the gambling establishment may use funds from a player-pool account to help offset the cost of in-house promotional activities designed to promote the play of player-pool banked games. These funds shall not be collected from a player-pool account more than once per month, and shall not exceed 2 percent of the player-pool account's average daily balance for the month in which the fee is collected. However, no later than January 1 and July 1 of each year, the licensed owner of the gambling establishment shall determine the actual cost of in-house promotional activities for the prior six months and if that actual cost is less than the amount that was collected, then the difference shall be immediately refunded to the player pool. Funds collected from a player-pool account to offset the cost of in-house promotional activities shall not be used to offset the cost of any advertisement or solicitation of any nature or type that is broadcasted, disseminated, or displayed outside of the physical boundaries of the gambling establishment. These funds shall not be used to offset the cost of any complimentary alcohol provided to any patron of the gambling establishment, or to offset the cost of any other complimentary item of gift given to a patron if the cost of that item or gift exceeds five hundred dollars ($500). -} 19981.2. If the licensed owner of a gambling establishment elects to operate a controlled game as a player-pool banked game, then: (a) He or she shall maintain detailed records in a manner satisfactory to the division reflecting the following: (1) The amounts of all deposits into, and withdrawals from, the player-pool account or accounts. (2) The nature and purpose of all deposits into, and withdrawals from, the player-pool account or accounts. (3) All in-house promotional activities for which funds from a player-pool account are used. (4) The actual cost of all in-house promotional activities. (5) Any other information required by the division. (b) No later than the 10th day of each month, the licensed owner of the gambling establishment shall send copies of all records specified in subdivision (a) for the prior month to the division. Nothing in this section shall be construed to limit the division's investigatory powers pursuant to Section 19825. SEC. 5. Section 186.9 of the Penal Code is amended to read: 186.9. As used in this chapter: (a) "Conducts" includes, but is not limited to, initiating, concluding, or participating in conducting, initiating, or concluding a transaction. (b) "Financial institution" means, when located or doing business in this state, any national bank or banking association, state bank or banking association, commercial bank or trust company organized under the laws of the United States or any state, any private bank, industrial savings bank, savings bank or thrift institution, savings and loan association, or building and loan association organized under the laws of the United States or any state, any insured institution as defined in Section 401 of the National Housing Act (12 U.S.C. Sec. 1724 (a)), any credit union organized under the laws of the United States or any state, any national banking association or corporation acting under Chapter 6 (commencing with Section 601) of Title 12 of the United States Code, any agency, agent or branch of a foreign bank, any currency dealer or exchange, any person or business engaged primarily in the cashing of checks, any person or business who regularly engages in the issuing, selling, or redeeming of traveler's checks, money orders, or similar instruments, any broker or dealer in securities registered or required to be registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 or with the Commissioner of Corporations under Part 3 (commencing with Section 25200) of Division 1 of Title 4 of the Corporations Code, any licensed transmitter of funds or other person or business regularly engaged in transmitting funds to a foreign nation for others, any investment banker or investment company, any insurer, any dealer in gold, silver, or platinum bullion or coins, diamonds, emeralds, rubies, or sapphires, any pawnbroker, any telegraph company, any person or business regularly engaged in the delivery, transmittal, or holding of mail or packages, any person or business that conducts a transaction involving the transfer of title to any real property, vehicle, vessel, or aircraft, any personal property broker, any person or business acting as a real property securities dealer within the meaning of Section 10237 of the Business and Professions Code, whether licensed to do so or not, any person or business acting within the meaning and scope of subdivisions (d) and (e) of Section 10131 and Section 10131.1 of the Business and Professions Code, whether licensed to do so or not, any person or business regularly engaged in gaming within the meaning and scope of Section 330, any person or business regularly engaged in pool selling or bookmaking within the meaning and scope of Section 337a, any person or business regularly engaged in horseracing whether licensed to do so or not under the Business and Professions Code, any person or business engaged in the operation of a gambling ship within the meaning and scope of Section 11317, any person or business engaged in controlled gambling within the meaning and scope of subdivisions (e) and (i) of Section 19805 of the Business and Professions Code, whether registered to do so or not, and any person or business defined as a "bank," "financial agency," or "financial institution" by Section 5312 of Title 31 of the United States Code or Section 103.11 of Title 31 of the Code of Federal Regulations and any successor provisions thereto. (c) "Transaction" includes the deposit, withdrawal, transfer, bailment, loan, pledge, payment, or exchange of currency, or a monetary instrument, as defined by subdivision (d), or the electronic, wire, magnetic, or manual transfer of funds between accounts by, through, or to, a financial institution as defined by subdivision (b). (d) "Monetary instrument" means United States currency and coin; the currency, coin, and foreign bank drafts of any foreign country; payment warrants issued by the United States, this state, or any city, county, or city and county of this state or any other political subdivision thereof; any bank check, cashier' s check, traveler's check, or money order; any personal check, stock, investment security, or negotiable instrument in bearer form or otherwise in a form in which title thereto passes upon delivery; gold, silver, or platinum bullion or coins; and diamonds, emeralds, rubies, or sapphires. Except for foreign bank drafts and federal, state, county, or city warrants, "monetary instrument" does not include personal checks made payable to the order of a named party which have not been endorsed or which bear restrictive endorsements, and also does not include personal checks which have been endorsed by the named party and deposited by the named party into the named party's account with a financial institution. (e) "Criminal activity" means a criminal offense punishable under the laws of this state by death or imprisonment in the state prison or from a criminal offense committed in another jurisdiction punishable under the laws of that jurisdiction by death or imprisonment for a term exceeding one year. (f) "Foreign bank draft" means a bank draft or check issued or made out by a foreign bank, savings and loan, casa de cambio, credit union, currency dealer or exchanger, check cashing business, money transmitter, insurance company, investment or private bank, or any other foreign financial institution that provides similar financial services, on an account in the name of the foreign bank or foreign financial institution held at a bank or other financial institution located in the United States or a territory of the United States. SEC. 6. Section 330 of the Penal Code is amended to read: 330. Every person who deals, plays, or carries on, opens, or causes to be opened, or who conducts, either as owner or employee, whether for hire or not, any game of faro, monte, roulette, lansquenet, rouge et noire, rondo, tan, fan-tan, seven-and-a-half, hokey-pokey, or any house-banked or percentage game played with cards, dice, or any device, for money, checks, credit, or other representative of value, and every person who plays or bets at or against any of those prohibited games, is guilty of a misdemeanor, and shall be punishable by a fine not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000), or by imprisonment in the county jail not exceeding six months, or by both the fine and imprisonment. SEC. 7. Section 337j of the Penal Code is amended to read: 337j. (a) It is unlawful for any person, as owner, lessee, or employee, whether for hire or not, either solely or in conjunction with others, to do any of the following without having first procured and thereafter maintained in effect all federal, state, and local licenses required by law: (1) To deal, operate, carry on, conduct, maintain, or expose for play in this state any controlled game. (2) To receive, directly or indirectly, any compensation or reward or any percentage or share of the revenue, for keeping, running, or carrying on any controlled game. (3) To manufacture, distribute, or repair any gambling equipment within the boundaries of this state, or to receive, directly or indirectly, any compensation or reward for the manufacture, distribution, or repair of any gambling equipment within the boundaries of this state. (b) It is unlawful for any person to knowingly permit any controlled game to be conducted, operated, dealt, or carried on in any house or building or other premises that he or she owns or leases, in whole or in part, if that activity is undertaken by a person who is not licensed as required by state law, or by an employee of that person. (c) It is unlawful for any person to knowingly permit any gambling equipment to be manufactured, stored, or repaired in any house or building or other premises that the person owns or leases, in whole or in part, if that activity is undertaken by a person who is not licensed as required by state law, or by an employee of that person. (d) Any person who violates, attempts to violate, or conspires to violate this section shall be punished by imprisonment in a county jail for not more than one year, or by a fine of not more than five thousand dollars ($5,000), or by both that imprisonment and fine. (e) (1) As used in this section, "controlled game" means any game of chance, including any gambling device, played for currency, check, credit, or any other thing of value that is not prohibited and made unlawful by statute or local ordinance. (2) As used in this section, "controlled game" does not include any of the following: (A) The game of bingo conducted pursuant to Section 326.5. (B) Parimutuel racing on horse races regulated by the California Horse Racing Board. (C) Any lottery game conducted by the California State Lottery. (D) Games played with cards in private homes or residences, in which no person makes money for operating the game, except as a player. (f) The licensed owner of a gambling establishment may collect from each person who participates in the play of a game at the gambling establishment a flat fee for each wager made by the person. Fees charged for all wagers shall be determined and collected prior to the start of play of any hand or round. Flat fees on each wager may be assessed at different collection rates, but no more than three collection rates may be established per table. The owner of the gambling establishment shall provide ample notice related to the assessment of player fees to the patrons of the gambling establishment, which shall include providing that notice at each table where controlled gambling is conducted. This legislation codifies the holding in Sullivan v. Fox (1987) 189 Cal.App.3d 673, as to the collection of player fees in licensed gambling establishments, that no fee shall be calculated as a portion of wagers made or winnings earned, exclusive of charges or fees for the use of space and facilities. SEC. 8. Section 337k is added to the Penal Code, to read: 337k. Notwithstanding Section 330, the licensed owner of a gambling establishment may deal, play, or carry on, open, or cause to be opened, at the gambling establishment, the game of twenty-one, provided that the game is conducted in compliance with the Gambling Control Act, Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code. SEC. 9. Section 337l is added to the Penal Code, to read: 337l. Notwithstanding Section 330, the licensed owner of a gambling establishment may deal, play, or carry on, open, or cause to be opened, at the gambling establishment, any controlled game, as defined in subdivision (e) of Section 337j, played with cards, in which a player in that game acts as the bank for the game, provided that the game is conducted in compliance with the Gambling Control Act, Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code. SEC. 10. Section 337m is added to the Penal Code, to read: 337m. Notwithstanding Section 330, the licensed owner of a gambling establishment may deal, play, or carry on, open, or cause to be opened, at the gambling establishment, any controlled game, as defined in subdivision (e) of Section 337j, played with cards, in which a pool of money, which is funded by the players and is maintained and operated by the licensed owner of the gambling establishment for the sole and exclusive benefit of the players, is the bank for the game, provided that the game is conducted in compliance with the Gambling Control Act, Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code. SEC. 11. Section 14161 of the Penal Code is amended to read: 14161. As used in this title: (a) "Financial institution" means, when located or doing business in this state, any national bank or banking association, state bank or banking association, commercial bank or trust company organized under the laws of the United States or any state, any private bank, industrial savings bank, savings bank or thrift institution, savings and loan association, or building and loan association organized under the laws of the United States or any state, any insured institution as defined in Section 401 of the National Housing Act, any credit union organized under the laws of the United States or any state, any national banking association or corporation acting under Chapter 6 (commencing with Section 601) of Title 12 of the United States Code, any foreign bank, any currency dealer or exchange, any person or business engaged primarily in the cashing of checks, any person or business who regularly engages in the issuing, selling, or redeeming of traveler's checks, money orders, or similar instruments, any broker or dealer in securities registered or required to be registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934, any licensed sender of money, any investment banker or investment company, any insurance company, any dealer in coins, precious metals, stones, or jewelry, any pawnbroker, any telegraph company, any person or business engaged in controlled gambling within the meaning of subdivisions (e) and (i) of Section 19805 of the Business and Professions Code, whether registered or licensed to do so or not, and any person or business defined as a "bank," "financial agency," or "financial institution" by Section 5312 of Title 31 of the United States Code or Section 103.11 of Title 31 of the Code of Federal Regulations and any successor provisions thereto. (b) "Transaction" includes the deposit, withdrawal, transfer, bailment, loan, payment, or exchange of currency, or a monetary instrument, as defined by subdivision (c), by, through, or to, a financial institution, as defined by subdivision (a). "Transaction" does not include the purchase of gold, silver, or platinum bullion or coins, or diamonds, emeralds, rubies, or sapphires by a bona fide dealer therein, and does not include the sale of gold, silver, or platinum bullion or coins, or diamonds, emeralds, rubies, or sapphires by a bona fide dealer therein in exchange for other than a monetary instrument, and does not include the exchange of gold, silver, or platinum bullion or coins, or diamonds, emeralds, rubies, or sapphires by a bona fide dealer therein for gold, silver, or platinum bullion or coins, or diamonds, emeralds, rubies, or sapphires. (c) "Monetary instrument" means United States currency and coin; the currency and coin of any foreign country; and any instrument defined as a "monetary instrument" by Section 5312 of Title 31 of the United States Code or Section 103.11 of Title 31 of the Code of Federal Regulations, or the successor of either. Notwithstanding any other provision of this subdivision, "monetary instrument" does not include bank checks, cashier's checks, traveler's checks, personal checks, or money orders made payable to the order of a named party that have not been endorsed or that bear restrictive endorsements. (d) "Department" means the Department of Justice. (e) "Criminal justice agency" means the Department of Justice and any district attorney's office, sheriff's department, police department, or city attorney's office of this state. (f) "Currency" means United States currency or coin, the currency or coin of any foreign country, and any legal tender or coin defined as currency by Section 103.11 of Title 31 of the Code of Federal Regulations or any succeeding provision. SEC. 12. {+ This act shall only become operative if an amendment to the California Constitution that expands authorized gaming operations by Native American tribes is approved by the voters at the March 2000 election. If such a constitutional amendment is approved, this act shall become operative at the same time the constitutional amendment becomes operative. SEC. 13. +} No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution. Searching keywords: (statusam) (authorFloyd) (HooA)