BILL NUMBER: AB 1229	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 5, 2001

INTRODUCED BY   Assembly Member Frommer

                        FEBRUARY 23, 2001

   An act to add Section 330d to the Penal Code, relating to
gambling.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1229, as amended, Frommer.  Gambling:  prohibited online
gambling games.
   (1) Existing law prohibits, with the exception of specified games
conducted on Indian lands, banking or percentage games played with
cards, dice, or devices, including roulette, faro, and twenty-one,
lottery games, other than charitable bingo, raffles, and the games of
the California State Lottery, the operation, possession, sale or
control of slot machines, as defined, and sports wagering and other
forms of bookmaking and pool selling, other than licensed parimutuel
wagering on horse races, and provides that any person who operates or
bets at these prohibited gambling games is guilty of a crime and is
punishable by a misdemeanor or felony, as specified.
   This bill would state findings and declarations of the Legislature
with regard to online gambling games, and would provide that it is
unlawful for any person to operate or bet against any prohibited
online gambling game, as defined, for money, checks, credit, or any
other representative of value. This bill would provide that every
person who operates or offers for play any prohibited online gambling
game to any person physically located in this state at the time of
the transaction, or who operates such a game from a host server, as
defined, that is physically located in this state at the time of the
transaction, is guilty of a misdemeanor and is punishable by
imprisonment in a county jail not to exceed 90 days, a fine not to
exceed $1,000 per transaction, as defined, or by both that fine and
imprisonment.  By creating a new crime, this bill would impose a
state-mandated local program.
   This bill would provide that every person or entity who aids and
abets another person who is physically located in this state to play
or bet at any prohibited online gambling game in violation of this
section is guilty of a misdemeanor punishable by imprisonment in a
county jail not to exceed 90 days, a fine not to exceed $1,000 per
violation, or by both that fine and imprisonment.  This bill would
provide that these provisions shall not apply with respect to
advertisements that are not specifically directed towards this state
and which contain adequate disclosure of the illegality of these
games, nor to Internet service providers, web pages and search
engines, or other indexes, networks, or network equipment which act
as mere functional intermediaries between a patron and an online
gambling enterprise and which do not reasonably constitute an
advertisement or promotion of that enterprise.  By creating a new
crime, this bill would impose a state-mandated local program.
   This bill would provide that every person who plays or bets at or
against a prohibited online gambling game while physically located
within this state is guilty of an infraction punishable by a fine not
to exceed $100 per transaction.  By creating a new crime, this bill
would impose a state-mandated local program.
   This bill would also provide that notwithstanding any other
provision of law, the Attorney General is expressly authorized to
enforce these provisions, and in addition to bringing criminal
actions shall have the authority to file civil actions, issue cease
and desist letters, and take other actions as necessary to maximize
compliance with these provisions by online gambling enterprises,
intermediaries, and individual citizens of this state, and would
specifically authorize the Attorney General to review electronic,
print, and other advertisements of online gambling enterprises for
accuracy, and demand that advertisements appearing in this state
disclose that these online games are illegal in this state.  This
bill would provide that the authority thereby provided to the
Attorney General shall not be construed to limit the authority of a
district attorney to enforce these provisions.
   This bill would provide that its provisions are severable, and
that if any of its provisions or its applications are held invalid,
that invalidity shall not affect other provisions or applications
that can be given effect.
  (2) 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.  (a) The Legislature finds and declares the following:
   (1) Online gambling threatens the health, safety, and welfare of
the citizens of this state, because, unlike controlled gambling
conducted within licensed gambling establishments and tribal casinos,
online gambling is completely unregulated.
   (2) The unregulated nature of online gambling enterprises,
combined with the fact that many online gambling providers are
located beyond the criminal jurisdiction of this state or of the
United States, poses an unacceptable risk of fraudulent business
practices to patrons of these establishments.
   (3) Due to the anonymous nature of the Internet, online gambling
establishments are unable to accurately assess the age or identity of
online patrons, and thus these enterprises facilitate illegal
gambling by minors and other persons prohibited from engaging in
gambling.
   (4) Online gambling enterprises routinely and incorrectly assert
that persons in this state can legally participate in online gambling
games, and thus these enterprises engage in false and misleading
advertising.  
   (5) Pursuant to the long-standing public policy of this state, as
interpreted by its courts, loses and debts from gambling generally
are not enforceable in California. 
   (b) It is the intent of the Legislature in enacting this act to
remove any ambiguity as to the illegality of online gambling in this
state.   It is also the intent of the Legislature in enacting
this act that financial institutions and other intermediaries doing
business in the State of California take notice that gambling debts
in general, and debts from illegal online gambling in particular, may
be unenforceable, and accordingly, these entities are encouraged to
take appropriate action to protect their legitimate business
interests. 
  SEC. 2.  Section 330d is added to the Penal Code, to read:
   330d.  (a) Notwithstanding any other provision of law, and in
addition to the prohibitions and limitations on gambling contained in
this chapter and in Chapter 9 (commencing with Section 319), it is
unlawful for any person to operate or bet at or against any
prohibited online gambling game, as defined in subdivision (f), for
money, checks, credit, or any other representative of value.
   (b) Every person who deals, carries on, opens or causes to be
opened, or who conducts, operates, or offers for play any prohibited
online gambling game played for money, checks, credit, or any other
representative of value, to any person that he or she knows or has
reason to know is physically located within this state at the time of
the transaction, is guilty of a misdemeanor punishable by
imprisonment in a county jail not to exceed 90 days, a fine not to
exceed one thousand dollars ($1,000) per transaction, or by both that
imprisonment and fine.
   (c) Every person who deals, carries on, opens or causes to be
opened, or who conducts, operates, or offers for play any prohibited
online gambling game played for money, checks, credit, or any other
representative of value, from a host server, as defined in
subdivision (g), that is physically located within this state at the
time of the transaction, is guilty of a misdemeanor punishable by
imprisonment in a county jail not to exceed 90 days, a fine not to
exceed one thousand dollars ($1,000) per transaction, or by both that
imprisonment and fine.
   (d) (1) Every person or entity who aids and abets another person
who is physically located in this state to play or bet at any
prohibited online gambling game in violation of this section is
guilty of a misdemeanor punishable by imprisonment in a county jail
not to exceed 90 days, a fine not to exceed one thousand dollars
($1,000) per violation, or by both that fine and imprisonment.
   (2) This subdivision shall not apply with respect to
advertisements that are not specifically directed towards the
residents of this state and which contain adequate disclosure of the
illegality of these games, nor shall this subdivision apply with
respect to Internet service providers, web pages containing hypertext
links, web search engines, networks, routers, hubs, or other
directories, indexes, devices, or equipment which act as mere
functional intermediaries between a patron and an online gambling
enterprise and which do not reasonably constitute an advertisement or
promotion of that enterprise.
   (e) Every person who plays or bets at or against any prohibited
online gambling game for money, checks, credit, or any other
representative of value, while that person is physically located
within this state, is guilty of an infraction punishable by a fine
not to exceed one hundred dollars ($100) per transaction.
   (f) A prohibited online gambling game, for purposes of this
section, includes, but is not limited to, any of the following games
and any common variations thereon or facsimiles thereof, as well as
any banking or percentage game played with dice, cards, or devices,
that is conducted, operated, or offered for play over the Internet
for money, checks, credit, or any other representative of value:
   (1) Craps.
   (2) Roulette.
   (3) Blackjack or twenty-one.
   (4) Slot machines.
   (5) Poker, including stud poker, draw poker, Caribbean stud poker,
or Pai gow poker.
   (6) Baccarat.
   (7) Bingo, including bingo pulltab games.
   (8) Sportsbook wagering, including wagering on the outcome,
statistics, or any other aspect of a sporting event, including
wagering on a horse race  , except to the extent authorized by
statute or the California Horse Racing Board  .
   (9) Lottery games  , other than games lawfully conducted
by the California State Lottery  .
   (g)  For purposes of this act, Class II linked electronic
machines and Class III linked electronic gaming devices authorized by
federal law and authorized and operated pursuant to an existing or
future tribal-state compact are not considered a form of prohibited
online gambling.
   (h)  A host server, for purposes of this section, means the
computer or network of computers on which an online gambling game is
operated.  Host server does not include any computer, hub, or other
device, or any independent computer network, that acts as an
intermediary in the transfer of Internet Protocol (IP) packets to and
from the host server, provided that the intermediary device is not
owned or controlled by the person or entity, or a subsidiary thereof,
that owns or controls the host server.  
   (h)  
   (i)  A transaction, for purposes of this section, means each
transfer of funds or other valuable consideration for use in, or in
connection with, the making of a wager, series of wagers, or parlay
wager.  
   (i)  
   (j)  Notwithstanding any other provision of law, the Attorney
General  , from available resources,  is expressly
authorized to enforce this section, and in addition to bringing
criminal actions shall have the authority to file civil actions,
issue cease and desist letters, and take other actions as necessary
to maximize compliance with these provisions by online gambling
enterprises, intermediaries, and individual citizens of this state.
The Attorney General is specifically authorized to review electronic,
print, and other advertisements of online gambling enterprises for
accuracy, and may demand that advertisements appearing in this state
disclose that these online games are illegal in this state.  Nothing
in this subdivision shall be construed to limit the authority of a
district attorney to enforce the provisions of this section.

   (j) 
   (k)  The provisions of this section are severable.  If any
provision of this section or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
  SEC. 3.   Nothing in subdivision (f) of Section 330d of the
Penal Code shall be construed to affect the authority of the
California Horse Racing Board to authorize Internet gaming.
  SEC. 4.   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.