BILL NUMBER: SB 1751 INTRODUCED 02/24/94 BILL TEXT INTRODUCED BY Senator Alquist FEBRUARY 24, 1994 An act to amend Sections 8880.2, 8880.6, 8880.12, 8880.28, and 8880.30 of the Government Code, and to amend Section 330c of, to repeal and add Section 331 of, and to add Section 330d to, the Penal Code, relating to gambling. LEGISLATIVE COUNSEL'S DIGEST SB 1751, as introduced, Alquist. Gambling. (1) The California Constitution authorizes the establishment of a California State Lottery. The California Constitution also specifies that the Legislature has no power to authorize, and shall prohibit, casinos of the type currently operating in Nevada and New Jersey. The California State Lottery Act of 1984 sets forth limitations of the types of lottery games that may be played under the act. In this regard, existing law specifies that "lottery game" means any procedure authorized by the Lottery Commission whereby prizes are distributed among persons who have paid, or unconditionally have agreed to pay, for tickets or shares that provide the opportunity to win those prizes. This bill, in addition, would provide that the procedure authorized by the commission whereby these prizes are distributed shall be either by means of a subsequent drawing of numbers at random or by means of the uncovering of preprinted numbers or symbols on a ticket. In addition, the bill would specify that "lottery game" does not include any game or any slot or card machine, contrivance, appliance, or mechanical device, as specified in the Penal Code. (2) Existing law provides that for lottery games utilizing computer terminals or other devices, no coins or currency shall be dispensed to players from these computer terminals or devices. This bill, instead, would provide that computer terminals or other devices may be used only for the sale of tickets and the dispensing of information unrelated to the results of a particular game. In addition, the bill would provide, among other things, that (1) no "thing of value," as defined, shall be dispensed to players from these computer terminals or devices as a prize, and (2) no terminal or other device that is operated by a player or at the direction of a player may be operated in such a manner as to determine a winner. The bill also would provide that no selection of a lottery winner shall be made by or through the operation of a computer program, and under no circumstances shall the lottery use any game that is a form of gambling in casinos operating in Nevada and New Jersey as provided in the California Constitution. (3) Existing provisions of the Penal Code declare that a punchboard is a slot machine or device for purposes of certain statutes. One of these statutes makes every person who violates its provisions guilty of a misdemeanor, punishable by imprisonment in a county jail not exceeding 6 months, by a fine not exceeding $1,000, or by both that fine and imprisonment. This bill, instead, would provide that every person who possesses or uses a punchboard is guilty of a misdemeanor, punishable by a fine of not less than $100 or more than $1,000, by imprisonment in a county jail not exceeding 6 months, or by both that fine and imprisonment. (4) Existing law provides that every person who knowingly permits any specified games to be played, conducted, or dealt in any house owned or rented by that person, in whole or in part, is guilty of a misdemeanor, punishable by a fine of not less than $100 or more than $1,000, by imprisonment in a county jail not exceeding 6 months, or by both that fine and imprisonment. This bill would repeal these provisions and, instead, would make any person who knowingly maintains or knowingly permits a gambling casino, as defined, on property owned or rented by that person, in whole or in part, punishable as specified by those provisions of existing law. Because the bill would create a new crime, it would impose a state-mandated local program. (5) An initiative measure, the act provides that none of its provisions may be changed except to further its purpose by a bill passed by a 2/3 vote of each house of the Legislature and signed by the Governor. This bill would declare that specified provisions of the bill further the purpose of the act and would require a 2/3 vote. (6) 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: 2/3. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 8880.2 of the Government Code is amended to read: 8880.2. {- Activities Not Affected Except for the state-operated lottery established by this Chapter, nothing -} {+ Nothing +} in this {- Chapter -} {+ chapter +} shall be construed to repeal or modify existing {- State -} {+ state +} law with respect to the prohibition of casino gambling, punch boards, slot machines, dog racing, video poker {+ , +} or blackjack machines paying prizes, or {+ , except as provided in Section 8880.6, +} any other forms of gambling. SEC. 2. Section 8880.6 of the Government Code is amended to read: 8880.6. {- Other Statutory Provisions Sections -} {+ Sections +} 320, 321, 322, 323, 324, 325, 326, and 328 of the Penal Code do not apply to the California State Lottery or its operations. This exemption applies only to the operators of the {- Lottery -} {+ lottery +} and shall not be construed to change existing law relating to lotteries operated by persons or entities other than the {- Lottery -} {+ lottery +} . {+ Except as provided in this section and Section 8880.12, nothing in this chapter shall be construed to authorize the California State Lottery to operate any games otherwise prohibited by law. +} SEC. 3. Section 8880.12 of the Government Code is amended to read: 8880.12. "Lottery {- Game" "Lottery Game" -} {+ game" +} means {- any -} {+ a +} procedure authorized by the {- Commission -} {+ commission +} whereby prizes are distributed among persons who have paid, or unconditionally {+ have +} agreed to pay, for tickets or shares {- which -} {+ that +} provide the opportunity to win {- such -} {+ those +} prizes {+ either by means of a subsequent drawing of numbers at random or by means of the uncovering of preprinted numbers or symbols on a ticket. "Lottery game" does not include any game prohibited by Section 330 of the Penal Code, or any slot or card machine, contrivance, appliance, or mechanical device as defined by Section 330a, 330b, or 330.1 of the Penal Code +} . SEC. 4. Section 8880.28 of the Government Code is amended to read: 8880.28. (a) The commission shall promulgate rules and regulations specifying the types of lottery games to be conducted by the {- Lottery -} {+ lottery +} , provided: (1) No lottery game may use the {+ method or +} theme of bingo, roulette, dice, baccarat, blackjack, Lucky 7's, draw poker, slot machines, dog racing, or {- horse racing -} {+ horseracing +} . (2) In lottery games utilizing tickets, each ticket in these games shall bear a unique number distinguishing it from every other ticket in that game; and no name of an elected official shall appear on these tickets. (3) {- In games utilizing computer -} {+ Computer +} terminals or other devices {- , no coins or currency -} {+ may be used only for the sale of tickets and the dispensing of information unrelated to the results of a particular game. No "thing of value," as defined by Section 330.2 of the Penal Code,+} shall be dispensed to players from these computer terminals or devices {+ as a prize. No terminal or other device that is operated by a player, or at the direction of a player, may be operated in such a manner as to determine a winner. (4) The prohibition in paragraph (3) shall apply to an on-line computer or data-processing terminal capable of providing a source of both input and a video display output for the computer system to which it is connected, in which a player is playing against the algorithm of the terminal or which the player is playing directly against the terminal for immediate payment and is immediately rewarded or penalized based on the outcome, and which dispenses winnings that constitute any "thing of value" as defined by Section 330.2 of the Penal Code. However, nothing in this section shall be construed to prohibit an on-line computer system that is player-activated, but does not provide the player with interactive gaming, and utilizes the terminal for dispensing purposes only in which all of the following occurs: (A) The terminal algorithm is used for the random generation of numbers. (B) The tickets dispensed by the terminal do not allow the player the means to play directly against the terminal. (C) The player uses the dispensed ticket to participate in an offsite random drawing. (D) The player's ability to play against the terminal for immediate payment or reward is eliminated. (5) The lottery may employ a mechanical, electromechanical, or electronic device that is operated by a previously selected winner of a game to determine the amount or nature of the winner' s prize, but no person shall be permitted to wager any "thing of value," as defined by Section 330.2 of the Penal Code, including an entitlement to a prize on the result of the operation of such a device +} . (b) Notwithstanding subdivision (a), no changes in the types of games or methods of delivery of these games that incorporate technologies or mediums that did not exist, were not widely available, or were not commercially feasible at the time of the enactment of this chapter in 1984 shall be made, unless all of the following conditions are met: (1) This chapter is amended by statute to expressly authorize these changes. (2) The act making the amendments contains express legislative findings that the amendments are consistent with the terms of, and further the purposes of, this chapter. (3) The amendments comport with applicable state and federal law. (c) For purposes of this section, a change in the method of delivery means a material change in the way a consumer directly interacts with the game. (d) Subdivision (b) shall not apply to technological changes implemented prior to the effective date of this subdivision. (e) This section shall not be construed to limit any internal technological changes made to the equipment or components utilized by the {- Lottery -} {+ lottery +} . SEC. 5. Section 8880.30 of the Government Code is amended to read: 8880.30. The commission shall promulgate regulations {- which -} {+ that +} specify the method for determining winners in each lottery game, provided: (a) No lottery game shall be based on the results of a horserace. (b) If a lottery game utilizes a drawing of winning numbers, a drawing among entries, or a drawing among finalists, the drawings shall always be open to the public; any manual or physical selection by a person in the drawings shall not be conducted by any employee of the lottery; the drawings shall be witnessed by an independent certified public accountant; any equipment used in the drawings shall be inspected by the independent certified public accountant and an employee of the lottery both before and after the drawings; and the drawings and the inspections shall be recorded on both videotape and audiotape. {+ No selection of a winner shall be made by or through the operation of a computer program. +} (c) It is the intent of {+ the Legislature in amending +} this chapter {+ to clarify +} that {+ , while subject to the provisions of this chapter +} the commission may use any of a variety of existing or future methods or technologies in determining winners {+ , under no circumstances shall the commission use any game that is a form of gambling in casinos of the type currently operating in Nevada and New Jersey as provided in subdivision (e) of Section 19 of Article IV of the California Constitution. The Legislature hereby declares that casino gambling is contrary to the law and public policy of this state as reflected in the prohibition of casinos by that constitutional provision +} . SEC. 6. Section 330c of the Penal Code is amended to read: 330c. {- A punchboard as hereinafter defined is hereby declared to be a slot machine or device within the meaning of Section 330b of this code and shall be subject to the provisions thereof. -} {+ Every person who possesses or uses a punchboard is guilty of a misdemeanor, punishable by a fine of not less than one hundred dollars ($100) or more than one thousand dollars ($1,000), by imprisonment in a county jail not exceeding six months, or by both that fine and imprisonment.+} For the purposes of this section, a punchboard is any card, board {+ , +} or other device {- which -} {+ that +} may be played or operated by pulling, pressing, punching out {+ , +} or otherwise removing any slip, tab, paper {+ , +} or other substance therefrom to disclose any concealed number, name {+ , +} or symbol. SEC. 7. Section 330d is added to the Penal Code, to read: 330d. (a) A "slot machine," as defined by Sections 330a, 330b, and 330.1, does not include a mechanical, electromechanical, or electronic device that is used to conduct drawings for the purpose of selecting a winner of a lottery if (1) the device is not designed to operate by the activation of a player, and (2) does not, itself, determine whether the selected number, symbol, or combination of numbers and symbols matches any selection of a player. (b) It is the intent of the Legislature in enacting this section to clarify that a device used to conduct a lottery drawing is not intrinsically a slot machine. (c) This section shall not be construed to authorize prohibited lotteries. SEC. 8. Section 331 of the Penal Code is repealed. {- 331. Every person who knowingly permits any of the games mentioned in Sections 330 and 330a to be played, conducted, or dealt in any house owned or rented by such person, in whole or in part, is punishable as provided in Sections 330 and 330a. -} SEC. 9. Section 331 is added to the Penal Code, to read: 331. (a) For the purpose of this section, "gambling casino" means any house, building, outbuilding, structure, vessel, ship, craft, aircraft, vehicle, tent, or other place where one or more forms of gaming, slot or card machines, contrivances, appliances, or mechanical devices prohibited by Section 330, 330a, 330b, or 330.1 are played, dealt, conducted, or operated. (b) Any person who knowingly maintains or knowingly permits a gambling casino on property owned or rented by that person, in whole or in part, is guilty of a misdemeanor, punishable by a fine of not less than one hundred dollars ($100) or more than one thousand dollars ($1,000), by imprisonment in a county jail not exceeding six months, or by both that fine and imprisonment. (c) It is the intent of the Legislature in enacting this section to make clear that the prohibition of casinos as set forth by subdivision (e) of Section 19 of Article IV of the California Constitution applies to the operation of slot or card machines as well as games prohibited by Section 330 of the Penal Code. SEC. 10. The Legislature finds and declares that Sections 1 to 5, inclusive, of this act further the purposes of the California State Lottery Act of 1984 enacted by Proposition 37 at the November 6, 1984, general election. SEC. 11. The Legislature finds and declares that this act implements subdivision (e) of Section 19 of Article IV of the California Constitution which was also enacted by Proposition 37 at the November 6, 1984, general election. SEC. 12. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs which may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, changes the definition of a crime or infraction, changes the penalty for a crime or infraction, or eliminates a crime or infraction. Notwithstanding Section 17580 of the Government Code, unless otherwise specified in this act, the provisions of this act shall become operative on the same date that the act takes effect pursuant to the California Constitution.