Originally published 11 October 1997
in California Business and Professions Code
California Gambling Law
Coalition for Justice in Hawaiian Gardens and Jerusalem believes that Attorney
General Bill Lockyer must determine that Irving Moskowitz doesn't meet the
state law's requirements for the gambling license he needs to operate the
250-table casino he's building in Hawaiian Gardens. Read the law for yourself.
We've used bold-face type to highlight relevant sections.
BUSINESS AND PROFESSIONS CODE
19800. This chapter shall be known, and may be cited, as the "Gambling Control Act."
19801. The Legislature hereby finds and declares all of the following:
The longstanding public policy of this state disfavors the business of gambling.
State law prohibits commercially operated lotteries, banked or 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
(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
(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.
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.
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.
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.
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
(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.
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.
19801.2. The Legislature further finds and declares as follows:
regulation of banking and percentage games or of gambling devices consistent
with public safety and welfare would require, at a minimum, all of the following
(a) The creation of an adequately funded gambling control
commission with comprehensive powers to establish minimum standards and technical
specifications for gambling equipment and devices.
(b) The creation
of an adequately funded law enforcement capability within state government
to inspect, test, and evaluate gambling equipment and devices and modifications
(c) An appropriation by the Legislature to sufficiently fund
a full-time commission and law enforcement capability with responsibilities
commensurate with the expanded scope of gambling.
(d) The enactment
of necessary regulations setting forth standards and procedures for the licensing
of persons connected with the manufacture, sale, and distribution of equipment
and devices in this state.
(e) The enactment of standards related
to the trustworthiness and fairness of equipment and devices, upon the commission's
recommendation to the Legislature.
(f) The enactment of statutory
provisions governing the importation, transportation, sale, and disposal
of equipment and devices, upon the commission's recommendation to the Legislature.
The enactment of statutes providing for appropriate inspection and testing
of equipment and devices, upon the commission's recommendation to the Legislature.
(a) It is the intent of the Legislature, in enacting this chapter, to provide
uniform, minimum standards of regulation of permissible gambling activities
and the operation of lawful gambling establishments.
(b) Nothing in
this chapter shall be construed to preclude any city, county, or city and
county from prohibiting any gambling activity, from imposing more stringent
local controls or conditions upon gambling than are imposed by this chapter
or by the board, from inspecting gambling premises to enforce applicable
state and local laws, or from imposing any local tax or license fee, if the
prohibition, control, condition, inspection, tax, or fee is not inconsistent
with this chapter. Nothing in this chapter shall be construed to affect the
responsibility of local law enforcement agencies to enforce the laws of this
state, including this chapter.
19804. (a) In any action for
declaratory or injunctive relief, or for relief by way of any extraordinary
writ, other than an action initiated pursuant to Section 19922, wherein the
construction, application, or enforcement of this chapter, or any regulation
adopted pursuant thereto, or any order of the division or the board issued
pursuant thereto, is called into question, a court shall not grant any preliminary
or permanent injunction, or any peremptory writ of mandate, certiorari, or
prohibition, in connection therewith, except as follows:
(1) Upon proof by clear and convincing evidence that the division or the board is abusing or threatens to abuse its discretion.
Upon proof by clear and convincing evidence that the division or the board
is exceeding or threatens to exceed its jurisdiction.
(b) No temporary
injunction or other provisional order shall issue to restrain, stay, or otherwise
interfere with any action by the division or the board except upon a finding
by the court, based on clear and convincing evidence, that the public interest
will not be prejudiced thereby, and no such order shall be effective for
more than 15 calendar days.
(c) Nothing herein shall be construed to relieve a petitioner's obligation to exhaust administrative remedies.
In an action for relief of any nature wherein the construction, application,
or enforcement of this chapter, or any regulation adopted pursuant thereto,
or any order of the division or board issued pursuant thereto, is called
into question, the party filing the pleading shall furnish a copy thereof
to the division.
The copy shall be furnished by the party filing the pleading within 10 business days after filing.
19805. As used in this chapter, the following definitions shall apply:
"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, manufacturer's or
distributor' s license, or approval of any act or transaction for which division
approval is required or permitted under this chapter.
(c) "Board" means the California Gambling Control Board.
(d) "Controlled gambling" means to deal, operate, carry on, conduct, maintain, or expose for play any controlled game.
(e) "Controlled game" means any controlled game, as defined by subdivision (e) of Section 337j of the Penal Code.
"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) "Division" means the Division of Gambling Control in the Department of Justice.
"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) "Game" and "gambling game" means any controlled game.
(j) "Gambling" means to deal, operate, carry on, conduct, maintain, or expose for play any controlled game.
"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" means one or more rooms where any controlled gambling occurs.
"Gambling license" means any license issued by the state that authorizes
the person named therein to conduct a gambling operation.
operation" means one or more controlled games that are dealt, operated, carried
on, conducted, maintained, or exposed for play for commercial gain.
Except as provided by regulation, "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.
(p) Except as determined by regulation, "independent agent" means any person who does either of the following:
Approves or grants the extension of gambling credit on behalf of a gambling
licensee or collects debt evidenced by a credit instrument.
with an owner licensee, or an affiliate thereof, to provide services consisting
of arranging transportation or lodging for guests at a gambling establishment.
"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.
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 license" means a state license authorizing the holder to be
associated with a gambling enterprise as a key employee.
(t) "Licensed gambling establishment" means the gambling premises encompassed by a state gambling license.
"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) "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.
( 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) "Owner licensee" means an owner of a gambling enterprise who holds a state gambling license.
Unless otherwise indicated, "person" includes a natural person, corporation,
partnership, limited partnership, trust, joint venture, association, or any
other business organization.
(y) "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
(z) "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) "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.
19806. Nothing in this chapter shall be
construed in any way to permit or authorize any conduct made unlawful by
Chapter 9 (commencing with Section 319) of, or Chapter 10 (commencing with
Section 330) of, Title 9 of Part 1 of the Penal Code, or any local ordinance.
Except as otherwise provided in this chapter, whenever the division or board
is a defendant or respondent in any proceeding, or when there is any legal
challenge to regulations issued by the board or division, venue for the proceeding
shall be in the County of Sacramento, the City and County of San Francisco,
the County of Los Angeles, or the County of San Diego.
Upon the occurrence of one of the events specified in Section 66 of the act
that added this chapter, any reference in this chapter to a section repealed
upon the occurrence of one of those events shall be deemed to be a reference
to the successor section of the same number with the suffix "A" made operative
pursuant to Section 66 of the act that added this chapter.