BILL NUMBER: AB 2319 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Floyd
FEBRUARY 24, 2000
An act to amend Sections 19801, 19805, 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 2319, as introduced, 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 secured customer trust 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
secured customer trust game, except for blackjack or twenty-one which
would be required to be played exclusively as a secured customer
trust game. With respect to secured customer trust banked games, the
bill would impose specified restrictions on the use of the funds in
the secured customer trust, 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 secured customer trust, 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
secured customer trust, but would provide that in no event shall any
of the funds on the trust account or accounts be accessed by the
owner. The bill would also provide that if a gambling establishment
ceases to offer secured customer trust banked games for play, all
funds remaining in a trust 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.
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. 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, banked or 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 division approval 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) "Commission" means the California Gambling Control Commission.
(d)
(f) "Controlled gambling" means to deal, operate, carry on,
conduct, maintain, or expose for play any controlled game.
(e)
(g) "Controlled game" means any controlled game, as defined
by subdivision (e) of Section 337j of the Penal Code.
(f)
(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.
(g)
(i) "Division" means the Division of Gambling Control in the
Department of Justice.
(h)
(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.
(i)
(k) "Game" and "gambling game" means any controlled game.
(j)
(l) "Gambling" means to deal, operate, carry on, conduct,
maintain, or expose for play any controlled game.
(k)
(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.
(l) "Gambling establishment" or "establishment"
(n) "Gambling establishment," "establishment," or "licensed
premises" means one or more rooms where any controlled gambling
occurs.
(m)
(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.
(n)
(p) "Gambling operation" means exposing for play
one or more controlled games that are dealt, operated, carried on,
conducted, or maintained , or exposed for play
for commercial gain.
(o) Except as provided by regulation, "gross
(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 .
(p) Except as determined by regulation, "independent agent"
(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 a
secured customer trust.
(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.
(q)
(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.
(r)
(u) "Key employee" means any natural person employed in the
operation of a gambling enterprise in a 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 secured customer trust enterprise.
(s)
(v) "Key employee license" means a state license authorizing
the holder to be associated with a gambling enterprise as a key
employee.
(t)
(w) "Licensed gambling establishment" means the gambling
premises encompassed by a state gambling license.
(u)
(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.
(v)
(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.
(w)
(z) "Owner licensee" means an owner of a gambling enterprise
who holds a state gambling license.
(x) Unless
(aa) "Person," unless otherwise indicated, "person"
includes a natural person, corporation, partnership,
limited partnership, trust, joint venture, association, or any other
business organization.
(y)
(bb) "Player" means a patron of a gambling establishment who
participates in a controlled game.
(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.
(dd) "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.
(ee) "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.
(z)
(ff) "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.
(aa)
(gg) "Secured customer trust 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 secured
customer trust.
(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
and , 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 board commission
exclusively for the support of the division and board
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. 7. 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 secured customer trust banked or player-banked, except for
blackjack or twenty-one, which shall be played exclusively as a
secured customer trust 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 secured customer trust 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 secured customer trust.
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 secured customer trust banked game,
then the secured customer trust shall be a pool of money that is
used as the bank in the play of the game. The secured customer trust
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 secured
customer trust. If for any reason the gambling establishment ceases
to offer secured customer trust banked games for play, all remaining
funds in the secured customer trust 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 secured customer trust banked
game, then the following requirements shall apply to the secured
customer trust:
(a) The licensed owner of the gambling establishment shall
maintain a separate, interest-bearing account or accounts for the
benefit and security of the secured customer trust. All moneys
attributable to the secured customer trust shall be kept in this
account or accounts. It is from this account or accounts that all
winnings are paid to players of secured customer trust 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) Under no conditions shall any of the funds in the secured
customer trust account or accounts be accessed by the licensed owner
of a gambling establishment, except as follows:
(1) To pay winnings to players in secured customer trust banked
games.
(2) To initiate the secured customer trust, the licensed owner of
the gambling establishment may extend an interest-free, unsecured
loan to the secured customer trust, which shall be deposited into the
secured customer trust account or accounts. Payments from a secured
customer trust account on that loan shall not commence unless and
until the balance in the secured customer trust account is equal to
at least 200 percent of the amount of the loan. A loan to initiate a
secured customer trust 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.
19981.2. If the licensed owner of a gambling establishment elects
to operate a controlled game as a secured customer trust 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
secured customer trust account or accounts.
(2) The nature and purpose of all deposits into, and withdrawals
from, the secured customer trust account or accounts.
(3) The actual cost of all in-house promotional activities.
(4) 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. 8. 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
subdivision (d) subdivisions (g) and (k) 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. 9. 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,
twenty-one, hokey-pokey, or any banking
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. 10. 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) This subdivision is intended to be dispositive of the
law relating to the collection of player fees in gambling
establishments. No fee may be calculated as a portion of wagers made
or from winnings earned. 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. Ample notice shall be provided to the patrons
of gambling establishments relating to the assessment of fees.
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. 11. 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. 12. 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. 13. 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 trust 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. 14. 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 subdivision (e)
subdivisions (g) and (k) 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. 15. 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.