BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 317|
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THIRD READING
Bill No: AB 317
Author: Floyd (D)
Amended: 9/3/99 in Senate
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 10-0, 8/24/99
AYES: Baca, Burton, Chesbro, Dunn, Hughes, Johannessen,
Karnette, Knight, Lewis, Perata
NOT VOTING: O'Connell, Johnson
SENATE APPROPRIATIONS COMMITTEE : 10-0, 9/3/99 (Roll Call
Not Available)
ASSEMBLY FLOOR : 71-3, 6/1/99 - See last page for vote
SUBJECT : Gambling Control Act: gambling establishments
SOURCE : Author
DIGEST : This bill authorizes the player-pool banked
twenty-one in licensed California card clubs. This bill
allows card clubs to play other controlled games (i.e., Pai
Gown, Pan, Super Pan 9) as either player-pool banked or
player banked, as specified. (See Analysis for specifics.)
ANALYSIS :
Existing Law
1.Specifies that any person who conducts any game of faro,
monte, roulette, lasquenet, rouge et noire, rondo, tan,
CONTINUED
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fan-tan, seven-and-a half, twenty-one, hokey pokey, or
any banking or percentage game played with cards, dice,
or any device, is guilty of a misdemeanor.
2.Establishes the Gambling Control Commission and grants it
jurisdiction over the operation of card clubs and of all
persons having an interest in the operation of card
clubs.
3.Creates the Division of Gambling Control within the
department of Justice to investigate and enforce
controlled gambling activities in California.
4.Defines a "controlled game" as any game of chance,
including any gambling device, played for currency or any
other thing of value that is not prohibited and made
unlawful by statute or local ordinance.
5.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.
6.Provides that after January 1, 2003, (a) no city, county,
or city and county may issue a gambling license with
respect to a gambling establishment unless one of the
three specified conditions is satisfied, including that a
majority of the voters has approved a measure permitting
gambling, and (b) any amendment to a gambling ordinance
which results 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:
1.Defines a "house-banked game" as any game in which the
licensed owner of a gambling establishment maintains or
operates a bank in a controlled game for the benefit of
any person or entity other than the player pool.
2.Defines "player-banked game" to mean any game in which a
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player or players maintain or operate the bank.
3.Defines "player-pool banked game" to mean any game in
which the bank is maintained or operated by the licensed
owner of the gambling establishment for the sole and
exclusive benefit of the player-pool.
4.Requires propositional players to be clearly identified
to every other player participating in a controlled
game.
5.With approval of rules for the game of 21 to be played
only as a player-pool banked game, by both the State
Gambling control division and the Division of Gambling
Control, allows a licensed gambling establishment to
offer the play of 21 as specified.
6.Provides for a limit on the maximum number of tables in
card clubs where the game of 21 can be conducted as
follows: (a) one to four tables, may operate one 21
table, (b) five to nine tables, may operate up to two
tables, (c) 10 to 19, may operate up to four tables, (d)
20 to 39 tables, may operate up to six tables, (e) 40 to
59 tables, may operate up to eight tables, (f) 60 or
more tables, may operate up to 20 tables.
7.Provides that the fees for the issuance or renewal of a
state gambling license that are based upon the number of
authorized tables in a card club as specified, will be
doubled with respect to tables where 21 is played.
8.Specifically details the conditions under which a
controlled game can be conducted as either a player-pool
banked or player-banked game.
9.Allows the licensed owner of a gambling establishment to
extend an interest free, unsecured loan to initiate a
player-pool as specified.
10.Authorizes the owner of a gambling establishment to
extend an interest-free loan to initiate a pool, but
provides that in no event shall any of the funds on the
player-pool account or accounts be accessed by the
owner.
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11.Makes a number of technical and conforming changes to
various sections of the Penal Code.
12.Requires two-thirds of voters to approve a measure or
ordinance that results in the expansion of gaming
13.Provides that this bill will only become operative if an
amendment to the California Constitution that expands
authorized gaming operations by Native American tribes
is approved by the voters at the March 2000 election\.
Background
Since 1872, California has prohibited gambling on specified
games. In 1885, the Legislature prohibited several
additional games, including stud-horse poker and
twenty-one, as well as any "banking" or "percentage" games
played with cards, dice, or any device. Legislation
enacted in 1991, (AB 97 Floyd), subsequently deleted
stud-horse poker from this list of prohibited games.
While present law specifies the prohibited games played as
either house banked or percentage games, it does not define
what banking or percentage games are. As a result, the
public, law enforcement agencies, and the card club
industry, generally, have had to rely on case law to
determine legal games and how they are played in
California. House banked games have come to be defined as
games whereby the house is a participant in the game,
taking on all comers, paying all winners, and collecting
from all losers. A percentage game generally describes any
game of chance from which the house collects money
calculated as a portion of wagers made, or sums won in
play, exclusive of charges or fees for use of space and
facilities.
Both these types of games are commonly associated with
games played at out-of-state casinos, and are disallowed in
California because in these games the house has a direct
interest in the game, a statistical advantage in some
instances, and generally possess limitless funds.
By contrast, poker, and other games played in a "round"
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where players bet against each other rather than against
the house (player-banked games), have always been legal in
California. In fact, any game not specifically prohibited
in statute, or that is not a banking or percentage game may
be played in California subject to the provisions of the
Gambling Control Act and contingent upon approval by the
local electorate. Additionally, many California card clubs
play card games that utilize a player-dealer format, and
while similar, they are not identical, and therefore not
determined to be illegal, ( e.g. "California Aces,"
"California Blackjack," "Newjack," or "Twenty-First Century
Blackjack"). The difference is that the object of these
games is to achieve a hand of 22 rather than 21.
At various times, the courts have had to determine whether
new card games are either derivatives of those games that
are prohibited under existing law, or are banking or
percentage games. In Huntington Park Club Corp. v. County
of Los Angeles , the Court of Appeal held that the game of
pai gow was not an illegally banked game because the role
of the player-banker continually and systematically rotates
among each of the participants. Recently, in Oliver v.
County of Los Angeles , the courts were asked to consider
whether the newly introduced game of "Newjack" was
prohibited under existing law, or if the game was
inconsistent with previous judicial determinations
regarding banking and percentage games.
In Oliver , the trial court determined that "Newjack" was
not a banking or percentage game, but instead, violated
existing law because the rules of the game (with a target
number of 22) merely represented a variation of 21, a game
prohibited under current law. The Appellate court
subsequently ruled that "Newjack" violated existing law
because the game had the "potential of being played as a
banking game.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Unable to verify at time of writing)
California Commerce Club
Lucky Lady Cardroom
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Empire Sportsmen's Association
Lucky Derby Cardroom
OPPOSITION : (Unable to verify at time of writing)
Stand Up for California
ARGUMENTS IN SUPPORT : According to the author's office,
the author believes that the current prohibition against
the playing of twenty-one, which dates back to 1885, is
arbitrary and difficult to justify given the proliferation
of copycat games that are now played in card clubs that use
a target of 22 rather than 21. Card clubs maintain that
this situation has increased the chances for confusion
among players and local law enforcement agencies regarding
the rules of the particular game a player may be involved
in. The author feels that this measure as drafted,
permitting player-pooled twenty-one, will end any
confusion, and be better in the long run, for the players,
clubs, and local law enforcement.
ARGUMENTS IN OPPOSITION : Opponents of this measure
believe that it represents a major expansion of gambling in
California, and is the next step to full casino gambling in
California.
ASSEMBLY FLOOR :
AYES: Aanestad, Ackerman, Alquist, Aroner, Ashburn,
Baldwin, Bates, Battin, Baugh, Bock, Briggs, Calderon,
Campbell, Cardenas, Cardoza, Cedillo, Corbett, Correa,
Cox, Cunneen, Davis, Dickerson, Ducheny, Dutra,
Firebaugh, Florez, Floyd, Frusetta, Gallegos, Hertzberg,
Honda, House, Kaloogian, Keeley, Knox, Kuehl, Leach,
Lempert, Longville, Lowenthal, Machado, Maddox,
Maldonado, Margett, Mazzoni, McClintock, Migden, Nakano,
Olberg, Oller, Robert Pacheco, Papan, Pescetti, Romero,
Scott, Shelley, Soto, Steinberg, Strickland,
Strom-Martin, Thomson, Torlakson, Vincent, Washington,
Wayne, Wesson, Wiggins, Wildman, Wright, Zettel,
Villaraigosa
NOES: Havice, Leonard, Thompson
NOT VOTING: Brewer, Granlund, Jackson, Rod Pacheco, Reyes,
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Runner
TSM:cm 9/5/99 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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