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Home My WebLink AboutMINUTES - 09091997 - C55 TO: BOARD OF SUPERVISORS 5£-� SUPERVISOR JIM ROGERS �� l F` Contra FROM: . Costa September 3, 1997 County DATE: cOS covN� LEGISLATION TO CLARIFY THE INTENT OF THE LEG LATURE SUBJECT: REGARDING PENAL CODE SECTION 330 REGARDING PROHIBITED GAMES IN CARD CLUBS SPECIFIC REQUEST(S)OR RECOMMENDATION(S)8 BACKGROUND AND JUSTIFICATION RECOMMENDATION: SUPPORT the efforts of the City of San Pablo to seek legislation clarifying the Legislature's intention regarding the meaning of Penal Code Section 330, which defines card games which are prohibited to be played for money, checks, credit or other representation of value. BACKGROUND: The City of San Pablo has written to the Board of Supervisors asking for the Board's support for legislation to overturn a Superior Court holding that charging higher fees to play at higher stakes games turns such games into illegal "percentage" games under Penal Code Section 330. The City of San Pablo notes that how fees are collected within a gaming establishment should be within the discretion of the city or county which regulates the card club. They propose an amendment to Penal Code Section 330 which would add the following language: For purposes of this section, a game is not a "percentage game" solely because a card club collects a fixed fee per wager that varies based on a table limit, or collects a fixed fee for each $100 increment of each wager made by a player. CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE (S): J I ROG E S ACTION OF BOARD ON- S@ptember 9, 1997 APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS 1 HEREBY CERTIFY THAT THIS IS A TRUE _X UNANIMOUS(ABSENT AND CORRECT COPY OF AN ACTION TAKEN AYES: _NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. Cc: ATTESTED September 9, 1997 See Page 2 PHIL BATCHELOR,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR M382 (10/88) BY. ' �� ,DEPUTY Local authority to regulate card clubs within overall State law is important and should not be diluted through Court decisions. If clarification of the law is needed in order to preserve this local discretion and control, then this Board should join the City of San Pablo is seeking such legislation. A copy of the current language of Penal Code Section 330 is attached. cc: County Administrator District Attorney Sheriff-Coroner County Counsel Mayor Joseph M. Gomes, City of San Pablo and Members of the City Council -2- CODE PENAL CODE § 330 Note 6 ution of Chapter 10 tion for receive GAMING ensation, are not Section Section scheme. 330. Gaming defined; punishment. 335. District attorneys and peace officers; en- 330.7. Slot machines; antique not operated for forcement duties; neglect of duty. gambling purposes; return of seized ma- 337s. Draw poker; prohibition in counties over chine. four million population; assent of 332. Winning by fraudulent means, trick, or ate prison cheating. electors. § 330. Gaming defined; punishment 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 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 n. 21 Pac. dollars ($1,000), or by imprisonment in the county jail not exceeding six months, or by both the fine and imprisonment. (Amended by Stats.1991, c. 71 (A.B.97), § 1.) ;ed by such Historical and Statutory Notes to whether 1991 Legislation "It is the intent of the Legislature,by this act,to clarify of "supervi- The 1991 amendment deleted "stud-horse poker" from the effect of Section 330 of the Penal Code on card room luantities of the list of prohibited games and made nonsubstantive gaming in conformance with the holding in Tibbetts v. 3istributors, changes throughout the section. Van de Kamp,222 Cal.App.3d 389." 1 on volume Section 2 of Stats.1991,c.71 (A.B.97),provides: tate statute if an "end- marketing Notes of Decisions ter v. Omni- Slot machines 18 Under California law, "percentage card game" is one in l 776, certio- Twenty-one 17 which gaming operator has no interest in outcome of game but takes percentage of all amounts wagered or won. Rumsey Indian Rancheria of Wintun Indians v. Wilson, ap a product 1. Validity C.A.9(Cal.)1994,41 F.3d 421,amended and superseded on pyramid ar- For purpose of this section stating that every person denial of rehearing 64 F.3d 1250. ributors who who conducts "percentage game" is guilty of misdemean- California did not permit banked or percentage card ogram based or, term "percentage game" is not constitutionally vague gaming, and thus state was not required by IGRA to or ambiguous. Huntington Park Club . Count of negotiate with Indian tribes with respect to those gaming ii of arrange- end Corp.' y activities even though state allowed Los Angeles A 2 Dist. 1988) 253 CaLR tr. 408, 206 � g games that shared n of arrange- g (App. p some characteristics with banked and percentage card Webster v. Ca1.App.3d 241,review denied. p g 79 F.3d 776, games, in form of banked and percentage games other 2. State preemption than card games, and nonbanked, nonpercentage card Portnoy v. Superior Court of Riverside County (App. 4 games. Rumsey Indian Rancheria of Wintun Indians v. Dist. 1941) 116 P.2d 804, [main volume] hearing granted, Wilson,C.A.9(Cal.)1994,41 F.3d 421,.amended and super- vacated 20 Cal.2d 375, 125 P.2d 487. , seded on denial of rehearing 64 F.3d 1250. 4. Construction with other laws Question whether particular described game is a lottery Court was not required to enforce gambling debts or a banking game, or neither, is question.of law.,. West- 0 prove the under Nevada statute allowing cause of action for enforce- ern Telcon, Inc. v. California State Lottery (1996) 53 e the actual ment; forum state's strong public policy against enforce- Cal.Rptr.2d 812, 13 CalAth 475,917 P.2d 651. ►or that any ment of gambling debts allowed it to refuse to enforce Keno game operated by California State Lottery(CSL), any person sister state cause of action. Metropolitan Creditors Ser- in which each player placed wager on outcome of`,`draw" vice of Sacramento v. Sadri (App. 1.Dist. 1993) 19 Cal. of random numbers generated by computer and CSL paid artering, or Rptr.2d 646, 15 Ca1.App.4th 1821. winning players preset amount, based only on amount of :ket, or part wager, number of numbers selected and number of num- irding to the 6. Banking or percentage game bers matched, was a "banking game," and not an autho- Under California law, "banked card game" is one in rized "lotterv" or "lnt.tPry r9mn no ff AUG-2?-1997 14:15 SUR). DESAULNIER P.01/04 (31F SAN T - }��+�/ One Alvarado Square,San Pablo, CA 948M (510)215-10001 * 1,c#(510)235•-7059 _ 7 7--- Ell Office of the Maur cl Li July 3.1, 1.997 Honorable Chairpei-gon and Members of the Board of Supervisors Contra Costa County 2425 Bim Lane, Suite 110 Concord, CA 94520 R.e: bleed For Legislation Regarding Recent Court Decisions Prohibiting Fee Collection Prac ces Chairperson: On July 21, 1997, the San Pablo City Council adopted the enclosed resolution,urging the State Legislature to amend the State Penal Code or Gaming Registration Art to return authority to regulate fee collection practices at card clubs throughout California to local jurisdictions. This legislation is made necessary due to recent Superior Court decisions holding that charging higher fees to play at higher stakes games turn such games into illegal "percentage" games under Penal. Code Section 330. This statute is over one hundred years old and was never intended to be applied to regulate fee collection practices in the card clubs. - The decision can how fees-should be collected within the gamizag establishment sheiuR be - within the iliscretion of San Pablo and ether local jurisdictions. It is the cities and eouniies which directly regulate the gaming establishments once they are in operation. It is the City police departments and county sheriffs which must respond to complaints and safeguard the safety of employees and patrons. Penal Code Section 330 should be restricted to its original intention--to declare which specific,games are prohibited. While the Court's interpretation is based on a technical reading of the statute, there is absolutely no public policy basis and no compelling reason for this century-cold statute to remain construed in this way. By contrast,there are more than 200 lawful gaming clubs in numerous cities and counties in California where the legislative body and/or the electorate have determined that gaming.is lawful. in those jurisdictions, tax revenue from such gaming clubs can be highly significant to a public entity's financial well-being. Especially in the wake of Proposition 218,cities and counties must be highly protective of existing revenue sources to safeguard essential services. FA >m . : :. .. . . AUG-27-1997 14=16 SUPU. nESALILNIER P.02/04 Page 2 Need For Legislation Regarding Recent Court Decisions Prohibiting Fee Collection Practices July 31, 1997 Without this legislation,thew entities may be faced with a significant and unanticipated reduction in revenues,even apart from the effect of Proposition 218,thereby making essential city of county services even more problematic. The City of San Pablo is working towards finding an appropriate legislative vehicle for introduction of the necessary amendment to Penal Code Section 330 or to the Gamiug Registration Act. An amendment to Section 330 could simply add the language: "For.purposes oftb'is section, a-game is riot a "percentage game" solely because a card club collects a faxed fee per,wage that.. varies based on a table limit,or collects a fixed fee for each$100 increment of each wager made by a player." The San Pablo City Council and I urge your jurisdiction to adopt a similar resolution and to contact your state legislators,and the Attorney General, asking fox their support. If we as public entities speak with a unified voice,I hope that voice will be heard in Sacramento. Please have this letter distributed to your Chief Administrative Officer and County Counsel, as well as the Board of Supervisors. Should you need any assistance in this matter, or have any questions whatsoever,please feel free to call City Manager Rary Robinson at(510)215-3012;or City Attorney Brian Libow at(510)215-3009. Tbank you so much for your attention to this important matter. Yours Truly, Joseph M. Gomes Mayor City of San Pablo Enclosure AUG-27-1997 14:16 SUPU. DESAULNIER P.03iO4 RESOLUTION NO.97-85 RESOLUTION OF TIIE CITY COUNCIL OF THE CITY OF SAN PABLO URGING THAT THE STATE'PENAL CODE OR GAMING REGISTRATION ACT RE AMENDED TO RETURN AUMORITY TO REGULATE FEE COLLECTION PRACTICES TO LICENSING JURISDICTIONS WHEREAS, Chapter 9.04 of the San Pablo Municipal Code contains strict regulations on the licensing of gaining clubs located within the City,and on the activities which take place in such estabiishments; :. Vtl"l-MREAS, the State Gaming Regzstratioia Acfcontains no. sratut the - gnder-, v Ehomed gaming dohs may charge fees to`plavers fir tt�e grrvi ge.¢ . gaming, or the manner of collection or amount of such fees. Further, the Act (Business and Professions Code §1980 1)specifically provides that it shall not preempt local authority to impose valid local controls or conditions upon gaining; WHEREAS. gaoling establishments like Casino San Paulo have had a long-standing industry practice of charging higher table rental fees for higher stakes games,thereby allowing for A3.6 reca>zpcnent of the additional expense necessary to administer such games; WHEREAS, in the exercise of its lawfW authority to reguIare gaming witban the territorial boundaries of tie City,the City of San Pablo has audmized Casino San Pablo to utilize this manner and method of fee collection; WHEREAS, this practice was recently declared unlawful by a Superior Court judge in Santa Clara County,based on a technical interpretation of a 112 year old statute,Penal Code Section 330. Section 330 lists several games that are prohibited in California, and also generally prohibits "banking"or"percentage"games. The Court ruled that charging higher fees to participate in.games with higher table stakes changes the games into "percentage" games, which are prohibited. -The Attorney Gene=al.has indicated that it will enforce this int. WHEREAS, there is no reason whatsoever that regulation of fee collection should not be a matter of local control, and this interpmtaion of Fermi Code Section 330 is a blow to such local control. The City of San Pablo has enacted one of the toughest, if not the toughest, regulatory or+dinmices in the State of California,and Casino San Pablo is, as a result,the cleanest,most crime- free,and highly regulated gaming establishment in the State. The decision on how fees should be collected within the gaming establishment should be within the discretion of San Pablo and other local jurisdictions. It is the cities which directly regulate the gaming establishme.uts once they are in operation. It is the city police departments which must respond to complaints aned safeguard the safety of employees and patrons. Penal Code Section 330 should be restricted to its original intention--to declare whick specific games are prohibited; WEMRF.AS, while the Court's interpretation is based on a technical reading of the statute, there is absolutely no public policy basis and no compelling reason for this century-old statute to AUG-27-1997 14:17 SLPV. DESALLNIER' • P-04/04 remain constued in this way. By contrast,there are more than 200 lawful gaming clubs in numerous cities in.California where the legislative body and/or the electorate have dete=ined that gaming is lawful. In those jmWictions, tax revenue from such gaming clubs can be highly significant to a city's fiMucial well-being. Especially in the wake of Proposition 219,these cities must be highly protective of existing revenue sources to safeguard essential city services. Without this legislation, these cities may be faced with a significant and unanticipated reduction in revenues,even apart from the effect of Proposition M,thereby making essential city services even more problematic-, WHEREAS, if implemented,this interpretation would have an immediate and substantial detrimental effect on tax revenue to the City's General Fund, The business license fee on the gaining establid=ent in San Pablo amounts to approximately one-half of the City's General Fund. Due to Proposition 218, the City has not been able to raise assessments in the City's two assessment districts.*Any significant reduction in the General Fund would severely impact the availability of services to San Pablo residents; WPEREAS, this amendment to state law is needed to safeguard local control and fiscal health in San Pablo and numerous other California municipalities. NOW,THEREFORE, nM CITY COUNCIL OF THE CITY OF SAN PABLO HEREE17 " RESOLVES that the State Legislature be urged to amend Penal Code Section 330 or.the State Gaming Registration Act to return authority over the manner,method and amount of fee collection practices to local licensing authorities. An amendment to Section 3370 could simply add language such as:'Tor purposes of this=tion,a game is not a"peroentagc Same"solely because a card club collects a fixed fee per wager that varies based on a table limit, or collects a fixed fee for each$100 increment of each wager made by a player.7 Adopted this 21st day of July, 1997,by the following vote to wit: AYES: COUNCILMEM13ERS: Vigil,Wysinger,Brown, Palmer, Gomes, NOES: CGUNCILMEMBERS: None ABSENTT- ""OUNCILNIFAf BERS. None ABSTAIN. COtINCILNMMBERS: None ATTEST: APPROVED: Is/Charlotte Miwaard IsstjosephM. Gomes TOTAL P.04