as amended, Gray.
begin deleteGambling: sports wagering. end delete
The California Constitution prohibits various gaming activities within the state, including casino-style gaming, but authorizes the Governor, subject to ratification by the Legislature, to negotiate and conclude compacts for the operation of slot machines and the conduct of lottery games and banking and percentage card games by federally recognized Indian tribes on Indian lands in California in accordance with federal law. The California Constitution also authorizes the Legislature to provide for the regulation of horse racing, charitable bingo games, the California State Lottery, and charitable raffles.end delete
Existing federal law, referred to as the Professional and Amateur Sports Protection Act, prohibits a governmental entity or a person from conducting a lottery, sweepstakes, or other betting, gambling, or wagering scheme based, directly or indirectly, on competitive games or performances in which amateur or professional athletes participate.end delete
Existing law prohibits a person, whether or not for gain, hire, or reward, from placing a bet or wager on the result of any contest of skill, speed, or power of endurance of person, as specified, and prohibits a person from pool selling or bookmaking.end delete
The Gambling Control Act provides for the licensure of certain individuals and establishments that conduct controlled games, as defined, and for the regulation of these gambling activities by the California Gambling Control Commission. Existing law provides for the enforcement of those regulations by the Department of Justice. Any willful violation of these provisions for which a punishment is not expressly provided, is punishable as a misdemeanor.end delete
The Horse Racing Law provides for the licensure of every person who participates in, or has anything to do with, the racing of horses, and every employee of a parimutuel department by the California Horse Racing Board. The board is responsible for adopting rules and regulations for the protection of the public, the control of horse racing, and parimutuel wagering, as well as enforcing all laws, rules, and regulations dealing with horse racing and parimutuel wagering. The law permits the board to authorize an association licensed to conduct a racing meeting to also operate a satellite wagering facility at its racetrack inclosure, and for fairs to locate a satellite wagering facility at their fairgrounds, under specified conditions. Any violation of these provisions is punishable as a misdemeanor.end delete
This bill would enact the California Interactive Sports Wagering Consumer Protection Act, which would authorize the owner or operator of a card room that holds a state gambling license, a racing association or racing fair with a current license, or a federally recognized California Indian tribe that operates a gaming facility pursuant to a facility license issued in accordance with a tribal gaming ordinance, to accept and facilitate wagering on a sports event, as defined, by any legal system or method of wagering, including, but not limited to, exchange wagering, parlays, over-under, moneyline, and straight bets, by applying to the Department of Justice for a license and authorization to conduct sports wagering, as defined. The bill would require sports wagering to be accepted and executed only using telephone, computer, or another method of electronic wagering communication. The bill would require each licensed operator to pay an annual fee of $_____ to the State Department of Public Health for deposit in the Gambling Addiction Program Fund. The bill would require each licensed operator to remit to the Treasurer on a quarterly basis for deposit in the ______ Fund an amount equal to _____ from the total win amount from the facilitation of a sports event wager. The bill would require the department to adopt regulations to implement these provisions, including authority to adopt regulations establishing fees in a reasonable amount necessary to recover the costs incurred by the department relating to the administration of these provisions.end delete
This bill would require the department to, among other things, monitor the conduct of all licensed operators. The bill would prohibit a licensed operator from, among other things, accepting a wager from any person who is under 21 years of age or whose name appears on a self-exclusion list. Any willful violation of these provisions would be punishable as a misdemeanor. By creating a new crime, this bill would impose a state-mandated local program.end delete
This bill would provide that its provisions would become operative only if the federal Professional and Amateur Sports Protection Act is amended or repealed to allow sports wagering in California and a state constitutional amendment to authorize sports wagering has been approved by the voters.end delete
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.end delete
This bill would provide that no reimbursement is required by this act for a specified reason.end delete
This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2⁄3 of the membership of each house of the Legislature.end delete
begin delete2⁄3 end delete.
Fiscal committee: begin deleteyes end delete.
State-mandated local program: begin deleteyes end delete.
The people of the State of California do enact as follows:
(a) Notwithstanding any other law and except as
4provided in Section 19596.4, a thoroughbred racing association
5or fair may distribute the audiovisual signal and accept wagers on
6the results of out-of-state thoroughbred races conducted in the
7United States during the calendar period the association or fair is
8conducting a race meeting, including days on which there is no
9live racing being conducted by the association or fair, without the
10consent of the organization that represents horsemen and
11horsewomen participating in the race meeting and without regard
12to the amount of purses. Further, the total number of thoroughbred
13races imported by associations or fairs on a statewide basis under
14this section shall not exceed 50 per day on days when live
15thoroughbred or fair racing is being conducted in the state. The
16limitation of 50 imported races per day does not apply to any of
18(1) Races imported for wagering purposes pursuant to
20(2) Races imported that are part of the race card of the Kentucky
21Derby, the Kentucky Oaks, the Preakness Stakes, the Belmont
22Stakes, the Jockey Club Gold Cup, the Travers Stakes, the
23Arlington Million, the Breeders’ Cup, the Dubai Cup, the Arkansas Derby, the Apple Blossom Handicap, or the
26(3) Races imported into the northern zone when there is no live
27thoroughbred or fair racing being conducted in the northern zone.
28(4) Races imported into the combined central and
29when there is no live thoroughbred or fair racing being conducted
30in the combined central and southern zones.
31(b) Any thoroughbred association or fair accepting wagers
32pursuant to subdivision (a) shall conduct the wagering in
33accordance with the applicable provisions of Sections 19601,
3419616, 19616.1, and 19616.2.
35(c) No thoroughbred association or fair may accept wagers
36pursuant to this section on out-of-state races commencing after 7
37p.m., Pacific standard time, without the consent of the harness or
P5 1quarter horse racing association that is then conducting a live racing
2meeting in Orange or Sacramento Counties.
The Legislature finds and declares all of the
5(a) Since January 1, 1993, the federal Professional and Amateur
6Sports Protection Act (28 U.S.C. Sec. 3701 et seq.), known as
7PASPA, has prohibited most states and local governments from
8authorizing sports wagering.
9(b) Under PASPA, Nevada is the only state where full-scale
10sports wagering is currently legally conducted, and this activity
11has resulted in great direct and indirect revenues to that state’s
13(c) It has been reported that more than 30 million people visit
14Nevada every year and place a sports bet. Betting on sporting
15events rose 7.7 percent to $3.9 billion in 2014, and revenue hit a
16record, jumping 11.8 percent to $227 million, according to the
17Nevada Gaming Control Board.
18(d) There is no solid data on the volume of illegal sports betting
19activity occurring in the United States, but some estimate that
20nearly $400 billion is illegally wagered on sports each year.
21(e) In January 2015, the American Gaming Association
22estimated that Americans were expected to make $3.8 billion worth
23of illegal bets on the 2015 Super Bowl between the New England
24Patriots and the Seattle Seahawks. That figure stands in stark
25contrast to the approximately $100 million bet legally on the Super
26Bowl each year. In fact, the illegal market is 38 times greater than
27the legal market for sports wagering.
28(f) If the federal sports wagering ban is changed to allow sports
29wagering across the country, state gaming enforcement agencies
30would be required to properly regulate and enforce this activity.
31(g) If the federal sports wagering ban is ever lifted, it is in the
32best interests of this State that legalized sports wagering be
33authorized to be conducted by licensed card rooms, licensed horse
34racing associations, and federally recognized Indian tribes, under
35regulation and control by the Department of Justice.
Chapter 4.6 (commencing with Section 19720) is added
37to Division 8 of the Business and Professions Code, to read:
This chapter shall be known, and may be cited, as the
5California Interactive Sports Wagering Consumer Protection Act.
(a) Subject to a state constitutional amendment that
7has been approved by the voters and a change in federal law, the
8following entities may be licensed by the department to accept and
9facilitate wagering on sports events as authorized pursuant to this
11(1) A card room that operates pursuant to Chapter 5
12(commencing with Section 19800) whose owner or owners have
13been authorized, subject to oversight by, and are in good standing
14with, the applicable state regulatory authorities.
15(2) A racing association or racing fair, with a current license
16issued by the California Horse Racing Board pursuant to Chapter
174 (commencing with Section 19400). A licensed racing association
18 or licensed racing fair may conduct sports wagering only if it has
19an agreement in place with the organization recognized by the
20board that is responsible for negotiating purse agreements, satellite
21wagering agreements, and all other business agreements on behalf
22of horsemen and horsewomen participating in a racing meeting.
23(3) A federally recognized California Indian tribe that operates
24a gaming facility pursuant to a facility license issued in accordance
25with a tribal gaming ordinance approved by the Chair of the
26National Indian Gaming Commission.
27(b) The entities listed in subdivision (a) that are eligible for
28licensure pursuant to this chapter may form a partnership, joint
29venture, or any other affiliation in order to further the purposes of
As used in this chapter, the following definitions shall
33(a) “Board” means the California Horse Racing Board.
34(b) “Card room” means a gambling enterprise, as defined in
35subdivision (m) of Section 19805.
36(c) “Department” means the Department of Justice.
37(d) “Licensed operator” means any of the entities listed in
38subdivision (a) of Section 19721 that are authorized pursuant to
39this chapter to conduct sports wagering.
P7 1(e) “Prohibited sports event” means any collegiate sport or
2athletic event that takes place in California, or a sports event in
3which any California college team participates, regardless of where
4the event takes place.
5(f) “Sports event” shall include any professional sports or
6athletic event, and any collegiate sports or athletic event, except
7a prohibited sports event.
8(g) “Sports wagering” means the business of accepting wagers
9on a sports event by any legal system or method of wagering,
10including, but not limited to, exchange wagering, parlays,
11over-under, moneyline, and straight bets.
12(h) “Internet” means the international computer network of both
13federal and nonfederal interoperable packet-switched data
15(i) “Licensed service provider” means a person who is licensed
16pursuant to this chapter to provide goods or services to a licensed
17operator for use in the operation of an authorized sports wagering
18Internet Web site.
(a) An entity listed in subdivision (a) of Section 19721
20that is seeking to conduct sports wagering shall apply to the
21department for authorization to conduct sports wagering.
22(b) (1) The department shall hear and decide, and in reasonable
23order, all applications to conduct sports wagering from licensed
24card rooms, licensed racing associations or racing fairs, federally
25recognized Indian tribes, and service providers.
26(2) Authorization to conduct sports wagering shall not be
27unreasonably withheld from any applicant that is in good standing
28and has a current license issued pursuant to Chapter 4 (commencing
29with Section 19400) or Chapter 5 (commencing with Section
31(c) Each licensed operator shall pay an annual fee of _____
32($_____) to the State Department of Public Health for deposit in
33the Gambling Addiction Program Fund.
34(d) In consideration of the substantial value of each license,
35each licensed operator shall remit to the Treasurer on a quarterly
36basis for deposit in the _______ Fund an amount equal to _____
37from the total win amount from the facilitation of a sports event
Within 270 days after the operative date of this chapter,
40the department shall adopt regulations for the administration of
P8 1this chapter and may adopt regulations establishing fees in a
2reasonable amount necessary to recover the costs incurred by the
3department relating to the administration of this chapter.
The regulations adopted by the department shall do
5both of the following:
6(a) Provide for the approval of wagering rules and equipment
7by the department to ensure fairness to the public and compliance
8with state law, including, but not limited to, all of the following:
9(1) Acceptance of wagers on a series of sports events.
10(2) Types of wagering tickets that may be used.
11(3) The method of issuing tickets.
12(b) Govern all of the following:
13(1) The extension of credit.
14(2) The cashing, deposit, and redemption of checks or other
16(3) The amount of cash reserves to be maintained by licensed
17operators to cover winning wagers.
18(4) The provision of reliable records, accounts, and reports of
19transactions, operations, and events, the method of accounting to
20be used by licensed operators, and the types of records required
21to be maintained.
The sports wagering authorized pursuant to this chapter
23shall be accepted and executed only using telephone, computer,
24or another method of electronic wagering communication.
A licensed operator shall not do any of the following:
26(a) Accept a wager from a person who is under 21 years of age.
27(b) Accept a sports wager unless the transmission of a wager is
28initiated from within the State of California.
29(c) Accept a wager from any person whose name appears on
30any self-exclusion list.
Each licensed operator’s sports wagering Internet Web
32site shall contain information relating to problem gambling,
33including a telephone number that an individual may call to seek
34information and assistance for a potential gambling addiction.
A licensed operator shall establish the odds it will pay
36on wagers placed on sports events.
(a) A licensed operator shall not conduct any sports
38wagering in violation of this chapter, any regulation adopted
39pursuant to this chapter, or any governing local ordinance.
P9 1(b) Any person who willfully violates this chapter is guilty of
(a) The department shall have all of the following
5(1) To monitor the conduct of all licensed operators and other
6persons having a material involvement, directly or indirectly, with
7a sports wagering operation.
8(2) To investigate suspected violations of this chapter.
9(3) To investigate complaints that are lodged against licensed
10operators, or other persons associated with a sports wagering
11operation, by members of the public.
12(4) To initiate, when appropriate, disciplinary actions. In
13connection with any disciplinary action pursuant to this chapter,
14the department may seek restriction, limitation, suspension, or
15revocation of any license, permit, authorization, or approval
16pursuant to this chapter, Chapter 4 (commencing with Section
1719400), or Chapter 5 (commencing with Section 19800), or the
18imposition of a fine upon a person licensed, permitted, authorized,
19or approved pursuant to those chapters.
20(5) To adopt regulations related to its functions and duties as
21specified in this chapter.
22(6) To adopt regulations establishing fees in the reasonable
23amount necessary to recover costs incurred by the department
24relating to the enforcement of this chapter.
25(b) The department has all powers necessary and proper to
26enable it to carry out fully and effectually its duties and
27responsibilities as specified in this chapter.
(a) The department shall make appropriate
29investigations as follows:
30(1) To determine whether there has been any violation of this
31chapter or of any regulation adopted under this chapter.
32(2) To determine any facts, conditions, practices, or matters that
33it may deem necessary or proper to aid in the enforcement of this
34chapter or of any regulation adopted under this chapter.
35(3) To aid in adopting regulations.
36(b) If, after any investigation pursuant to this chapter, the
37department is satisfied that a license, permit, authorization, or
38approval issued pursuant to this chapter, Chapter 4 (commencing
39with Section 19400), or Chapter 5 (commencing with Section
4019800) should be suspended or revoked, it shall file an accusation
P10 1in accordance with Chapter 5 (commencing with Section 11500)
2of Part 1 of Division 3 of Title 2 of the Government Code.
3(c) In addition to any action that it may take against a license,
4permit, finding of suitability, or approval, the department may also
5require the payment of fines or penalties. However, any fine
6imposed shall not exceed twenty thousand dollars ($20,000) for
7each separate violation of this chapter or of any regulation adopted
8under this chapter.
The department shall have the authority to regulate
10sports wagering to the same extent that the department currently
11regulates other legal gambling in this state, including the ability
12to audit the books and records of a licensed operator.
(a) This chapter shall become operative only if both
14of the following occur:
15(1) The federal Professional and Amateur Sports Protection Act
16(28 U.S.C. Sec. 3701 et seq.) is amended or repealed to allow
17sports wagering in California.
18(2) A state constitutional amendment to authorize sports
19wagering has been approved by the voters.
20(b) This chapter shall become operative on the date that the
21Attorney General executes a declaration, which shall be retained
22by the Attorney General, stating that both of the events described
23in subdivision (a) have occurred.
24(c) In addition to the requirements specified in subdivision (b),
25the Attorney General shall post the declaration on the department’s
26Internet Web site and the Attorney General shall send the
27declaration to the appropriate policy committees of the Legislature
28and to the Legislative Counsel.
Section 336.9 of the Penal Code is amended to read:
(a) Notwithstanding Section 337a, and except as
31provided in subdivision (b), any person who, not for gain, hire, or
32reward other than that at stake under conditions available to every
33participant, knowingly participates in any of the ways specified in
34paragraph (2), (3), (4), (5), or (6) of subdivision (a) of Section
35337a in any bet, bets, wager, wagers, or betting pool or pools made
36between the person and any other person or group of persons who
37are not acting for gain, hire, or reward, other than that at stake
38under conditions available to every participant, upon the result of
39any lawful trial, or purported trial, or contest, or purported contest,
40of skill, speed, or power of endurance of person or animal, or
P11 1between persons, animals, or mechanical apparatus, is guilty of
2an infraction, punishable by a fine not to exceed two hundred fifty
4(b) Subdivision (a) does not apply to any of the following
6(1) Any bet, bets, wager, wagers, or betting pool or pools made
8(2) Betting pools with more than two thousand five hundred
9dollars ($2,500) at stake.
10(3) Any sports wagering authorized pursuant to Chapter 4.6
11(commencing with Section 19720) of Division 8 of the Business
12and Professions Code.
Section 337a of the Penal Code is amended to read:
(a) Except as provided in Section 336.9, and as
15authorized pursuant to Chapter 4.6 (commencing with Section
1619720) of Division 8 of the Business and Professions Code, every
17person who engages in one of the following offenses shall be
18punished for a first offense by imprisonment in a county jail for a
19period of not more than one year or in the state prison, or by a fine
20not to exceed five thousand dollars ($5,000), or by both
21imprisonment and fine:
selling or bookmaking, with or without writing, at any
23time or place.
24(2) Whether for gain, hire, reward, or gratuitously, or otherwise,
25keeps or occupies, for any period of time whatsoever, any room,
26shed, tenement, tent, booth, building, float, vessel, place, stand or
27enclosure, of any kind, or any part thereof, with a book or books,
28paper or papers, apparatus, device or paraphernalia, for the purpose
29of recording or registering any bet or bets, any purported bet or
30bets, wager or wagers, any purported wager or wagers, selling
31pools, or purported pools, upon the result, or purported result, of
32any trial, purported trial, contest, or purported contest, of skill,
33speed, or power of endurance of person or animal, or between
34persons, animals, or mechanical apparatus, or upon the result, or
35purported result, of any lot, chance, casualty, or unknown or
36contingent event whatsoever.
37(3) Whether for gain, hire, reward, or gratuitously, or otherwise,
38receives, holds, or forwards, or purports or pretends to receive,
39hold, or forward, in any manner whatsoever, any money, thing or
40consideration of value, or the equivalent or memorandum thereof,
P12 1staked, pledged, bet or wagered, or to be staked, pledged, bet or
2wagered, or offered for the purpose of being staked, pledged, bet
3or wagered, upon the result, or purported result, of any trial, or
4purported trial, or contest, or purported contest, of skill, speed, or
5power of endurance of person or animal, or between persons,
6animals, or mechanical apparatus, or upon the result, or purported
7result, of any lot, chance, casualty, or unknown or contingent event
9(4) Whether for gain, hire, reward, or gratuitously, or otherwise,
10at any time or place, records, or registers any bet or bets, wager
11or wagers, upon the result, or purported result, of any trial, or
12purported trial, or contest, or purported contest, of skill, speed, or
13power of endurance of person or animal, or between persons,
14animals, or mechanical apparatus, or upon the result, or purported
15result, of any lot, chance, casualty, or unknown or contingent event
17(5) Being the owner,
lessee or occupant of any room, shed,
18tenement, tent, booth, building, float, vessel, place, stand, enclosure
19or grounds, or any part thereof, whether for gain, hire, reward, or
20gratuitously, or otherwise, permits that space to be used or occupied
21for any purpose, or in any manner prohibited by paragraph (1),
22(2), (3), or (4).
23(6) Lays, makes, offers or accepts any bet or bets, or wager or
24wagers, upon the result, or purported result, of any trial, or
25purported trial, or contest, or purported contest, of skill, speed or
26power of endurance of person or animal, or between persons,
27animals, or mechanical apparatus.
28(b) In any accusatory pleading charging a violation of this
29section, if the defendant has been once previously convicted of a
30violation of any subdivision of this section, the previous conviction
31shall be charged in the accusatory pleading, and, if the previous
32conviction is found to be true by the jury, upon a jury trial, or by
33the court, upon a court trial, or is admitted by the defendant, the
34defendant shall, if he or she is not imprisoned in the state prison,
35be imprisoned in the county jail for a period of not more than one
36year and pay a fine of not less than one thousand dollars ($1,000)
37and not to exceed ten thousand dollars ($10,000). Nothing in this
38paragraph shall prohibit a court from placing a person subject to
39this subdivision on probation. However, that person shall be
40required to pay a fine of not less than one thousand dollars ($1,000)
P13 1nor more than ten thousand dollars ($10,000) or be imprisoned in
2the county jail for a period of not more than one year, as a condition
3thereof. In no event does the court have the power to absolve a
4person convicted pursuant to this subdivision from either being
5imprisoned or from paying a fine of not less than one thousand
6dollars ($1,000) and not more than ten thousand dollars ($10,000).
7(c) In any accusatory pleading charging a violation of this
8section, if the defendant has been previously convicted two or
9more times of a violation of any subdivision of this section, each
10previous conviction shall be charged in the accusatory pleadings.
11If two or more of the previous convictions are found to be true by
12the jury, upon a jury trial, or by the court, upon a court trial, or are
13admitted by the defendant, the defendant shall, if he or she is not
14imprisoned in the state prison, be imprisoned in a county jail for
15a period of not more than one year or pay a fine of not less than
16one thousand dollars ($1,000) nor more than fifteen thousand
17dollars ($15,000), or be punished by both imprisonment and fine.
18Nothing in this paragraph shall prohibit a court from placing a
19person subject to this subdivision on probation. However, that
20person shall be required to pay a fine of not less than one thousand
21dollars ($1,000) nor more than fifteen thousand dollars ($15,000),
22or be imprisoned in a county jail for a period of not more than one
23year as a condition thereof. In no event does the court have the
24power to absolve a person convicted and subject to this subdivision
25from either being imprisoned or from paying a fine of not more
26than fifteen thousand dollars ($15,000).
27(d) Except where the existence of a previous conviction of any
28subdivision of this section was not admitted or not found to be true
29pursuant to this section, or the court finds that a prior conviction
30was invalid, the court shall not strike or dismiss any prior
31convictions alleged in the information or indictment.
32(e) This section applies not only to persons who commit any of
33the acts designated in paragraphs (1) to (6), inclusive, of
34subdivision (a), as a business or occupation, but also applies to
35every person who in a single instance engages in any one of the
36acts specified in paragraphs (1) to (6), inclusive, of subdivision
No reimbursement is required by this act pursuant to
39Section 6 of Article XIII B of the California Constitution because
40the only costs that may be incurred by a local agency or school
P14 1district will be incurred because this act creates a new crime or
2infraction, eliminates a crime or infraction, or changes the penalty
3for a crime or infraction, within the meaning of Section 17556 of
4the Government Code, or changes the definition of a crime within
5the meaning of Section 6 of Article XIII B of the California