Article 4 - Licensing

California Business and Professions Code — §§ 19850-19879

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Sections (33)

§ 19850

Added by renumbering Section 19840 by Stats. 2002, Ch. 738, Sec. 35. Effective January 1, 2003.

Every person who, either as owner, lessee, or employee, whether for hire or not, either solely or in conjunction with others, deals, operates, carries on, conducts, maintains, or exposes for play any controlled game in this state, or who receives, directly or indirectly, any compensation or reward, or any percentage or share of the money or property played, for keeping, running, or carrying on any controlled game in this state, shall apply for and obtain from the commission, and shall thereafter maintain, a valid state gambling license, key employee license, or work permit, as specified in this chapter. In any criminal prosecution for violation of this section, the punishment shall be as provided in Section 337j of the Penal Code.

§ 19851

Amended by Stats. 2023, Ch. 302, Sec. 1. (AB 1271) Effective January 1, 2024.

(a)The owner of a gambling enterprise shall apply for and obtain a state gambling license. The owner of a gambling enterprise shall be known as the owner-licensee.

(b)Other persons who also obtain a state gambling license, as required by this chapter, shall not receive a separate license certificate, but the licenses of those persons shall be endorsed on the license certificate that is issued to the owner of the gambling enterprise.

(c)Notwithstanding any other law, the commission may adopt regulations, for any applicant who possesses a state gambling license in good standing as determined by the commission, to waive any application requirement, including, without limitation, any of the following:

(1)The requirement that an application be accompanied by supplemental forms pursuant to Section 19865.

(2)The requirement that an application be accompanied by a deposit pursuant to Section 19867.

(3)The requirement that an investigation be performed by the department.

(d)(1) The commission shall adopt regulations implementing a new owner license type that allows for a person or entity to be endorsed on the license certificate of multiple gambling enterprises.

(2)The regulations shall establish a process for a person or entity endorsed on the license certificate of multiple gambling enterprises

to request at the time of submittal of an application for license renewal that their existing endorsements be converted to the new owner license type, provided that the applicant’s current state gambling licenses are held in good standing, as determined by the commission.

(3)To the extent feasible, the regulations shall allow individuals or entities with the new owner license type to renew all of their endorsements on the license certificates of multiple gambling enterprises with a single application for renewal. Notwithstanding this paragraph, if the license certificate of a gambling enterprise ceases to be valid, any endorsement thereon of an individual or entity with the new owner license type shall be invalid.

§ 19852

Amended by Stats. 2023, Ch. 302, Sec. 2. (AB 1271) Effective January 1, 2024.

Except as provided in Section 19852.2, an owner of a gambling enterprise that is not a natural person shall not be eligible for a state gambling license unless each of the following persons individually holds a state gambling license:

(a)If the owner is a corporation, then each officer, director, and shareholder, other than a holding or intermediary company, of the owner. The foregoing does not apply to an owner that is either a publicly traded racing association or a qualified racing association.

(b)If

the owner is a publicly traded racing association, then each officer, director, and owner, other than an institutional investor, of 5 percent or more of the outstanding shares of the publicly traded corporation.

(c)If the owner is a qualified racing association, then each officer, director, and shareholder, other than an institutional investor, of the subsidiary corporation and any owner, other than an institutional investor, of 5 percent or more of the outstanding shares of the publicly traded corporation.

(d)If the owner is a partnership, then every general and limited partner of, and every trustee or person, other than a holding or intermediary company, having or acquiring a direct or beneficial interest in, that partnership owner.

(e)If the owner is a trust, then the trustee and, in the discretion of the

commission, any beneficiary and the trustor of the trust.

(f)If the owner is a limited liability company, every officer, manager, member, or owner.

(g)If the owner is a business organization other than a corporation, partnership, trust, or limited liability company, then all those persons as the commission may require, consistent with this chapter.

(h)Each person who receives, or is to receive, any percentage share of the revenue earned by the owner from gambling activities.

(i)Every employee, agent, guardian, personal representative, lender, or holder of indebtedness of the owner who, in the judgment of the commission, has the power to exercise a significant influence over the gambling operation.

§ 19852.2

Amended by Stats. 2013, Ch. 760, Sec. 1. (SB 472) Effective January 1, 2014.

(a)Notwithstanding Section 19852 or any other provision of law, and solely for the purpose of the licensure of a card club located on any portion of, or contiguous to, the grounds upon which a racetrack is or had been previously located and horserace meetings were authorized to be conducted by the California Horse Racing Board on or before January 1, 2012, that is owned by a limited partnership that also owns or owned the racetrack, the commission may, at its discretion, exempt all of the following from the licensing requirements of this chapter:

(1)The limited partners in a limited partnership that holds interest in a holding company if all of the following criteria are met:

(A)The limited

partners of the limited partnership in the aggregate directly hold at least 95 percent of the interest in the holding company.

(B)The limited partner is one of the following:

(i)An “institutional investor” as defined in subdivision (w) of Section 19805.

(ii) An “employee benefit plan” as defined in Section 1002(3) of Title 29 of the United States Code.

(iii) An investment company that manages a state university endowment.

(2)Other limited partners in a limited partnership described in paragraph (1), if the partners do not number more than five and each partner indirectly owns 1 percent or less of the shares of the interest in the holding company.

(3)A limited partner in a limited partnership that holds in the aggregate less than 5 percent of the interest in a holding company.

(b)Nothing in this section shall be construed to limit the licensure requirements for a general partner of a limited partnership or a limited partner that is not specifically described in this section.

§ 19853

Amended by Stats. 2012, Ch. 162, Sec. 6. (SB 1171) Effective January 1, 2013.

(a)The commission, by regulation or order, may require that the following persons register with the commission, apply for a finding of suitability as defined in subdivision (j) of Section 19805, or apply for a gambling license:

(1)Any person who furnishes any services or any property to a gambling enterprise under any arrangement whereby that person receives payments based on earnings, profits, or receipts from controlled gambling.

(2)Any person who owns an interest in the premises of a licensed gambling establishment or in real property used by a licensed gambling establishment.

(3)Any person

who does business on the premises of a licensed gambling establishment.

(4)Any person who is an independent agent of, or does business with, a gambling enterprise as a ticket purveyor, a tour operator, the operator of a bus program, or the operator of any other type of travel program or promotion operated with respect to a licensed gambling establishment.

(5)Any person who provides any goods or services to a gambling enterprise for compensation that the commission finds to be grossly disproportionate to the value of the goods or services provided.

(6)Every person who, in the judgment of the commission, has the power to exercise a significant influence over the gambling operation.

(b)The department may conduct any investigation it deems necessary to

determine whether a publicly traded corporation is, or has, engaged in activities specified in paragraph (2), (3), or (4) of subdivision (a), and shall report its findings to the commission. If a publicly traded corporation is engaged in activities described in paragraph (2), (3), or (4) of subdivision (a), the commission may require the corporation and the following other persons to apply for and obtain a license or finding of suitability:

(1)Any officer or director.

(2)Any owner, other than an institutional investor, of 5 percent or more of the outstanding shares of the corporation.

§ 19854

Repealed and added by Stats. 2023, Ch. 302, Sec. 4. (AB 1271) Effective January 1, 2024.

(a)A person shall not be employed as a key employee unless that person applies for and obtains a key employee license.

(b)A person shall not be issued a key employee license unless the person would qualify for a state gambling license.

(c)A key employee license, once issued, shall authorize a person to act as a key employee until the expiration or revocation of that license and shall entitle the holder to work for any gambling enterprise as a key employee upon proper notice to the department.

§ 19855

Amended by Stats. 2013, Ch. 760, Sec. 2. (SB 472) Effective January 1, 2014.

Except as otherwise provided by statute or regulation, every person who, by statute or regulation, is required to hold a state license shall obtain the license prior to engaging in the activity or occupying the position with respect to which the license is required. Every person who, by order of the commission, is required to apply for a gambling license or a finding of suitability shall file the application within 45 calendar days after receipt of the order.

§ 19856

Added by renumbering Section 19847A by Stats. 2002, Ch. 738, Sec. 41. Effective January 1, 2003.

(a)Any person who the commission determines is qualified to receive a state license, having due consideration for the proper protection of the health, safety, and general welfare of the residents of the State of California and the declared policy of this state, may be issued a license. The burden of proving his or her qualifications to receive any license is on the applicant.

(b)An application to receive a license constitutes a request for a determination of the applicant’s general character, integrity, and ability to participate in, engage in, or be associated with, controlled gambling.

(c)In reviewing an application for any license, the commission shall consider whether issuance of the license is inimical to public health, safety, or welfare, and whether issuance of the license will undermine public trust that the gambling operations with respect to which the license would be issued are free from criminal and dishonest elements and would be conducted honestly.

§ 19857

Added by renumbering Section 19848A by Stats. 2002, Ch. 738, Sec. 42. Effective January 1, 2003.

No gambling license shall be issued unless, based on all of the information and documents submitted, the commission is satisfied that the applicant is all of the following:

(a)A person of good character, honesty, and integrity.

(b)A person whose prior activities, criminal record, if any, reputation, habits, and associations do not pose a threat to the public interest of this state, or to the effective regulation and control of controlled gambling, or create or enhance the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the conduct of controlled gambling or in the carrying on of the business and financial arrangements incidental thereto.

(c)A person that is in all other respects qualified to be licensed as provided in this chapter.

§ 19858

Amended by Stats. 2013, Ch. 760, Sec. 3. (SB 472) Effective January 1, 2014.

(a)Except as provided in subdivisions (b) and (c), a person shall be deemed to be unsuitable to hold a state gambling license to own a gambling establishment if the person, or any partner, officer, director, or shareholder of the person, has any financial interest in any business or organization that is engaged in any form of gambling prohibited by Section 330 of the Penal Code, whether within or without this state.

(b)Subdivision (a) shall not apply to a publicly traded racing association, a qualified racing association, or any person who is licensed pursuant to subdivision (b) or (c) of Section 19852.

(c)Subdivision (a) shall not apply to a person who meets

all of the following criteria:

(1)The person is licensed or had an application to be licensed on file with the commission on or before February 1, 2013.

(2)The person has a financial interest in a business or organization engaged in gambling prohibited by Section 330 of the Penal Code that was closed and was not engaged in prohibited gambling at the time the person was either licensed or had filed an application to be licensed with the commission.

(3)The person has a financial interest in a gambling establishment that is located on any portion of, or contiguous to, the grounds on which a racetrack is or had been previously located and horserace meetings were authorized to be conducted by the California Horse Racing Board on or before January 1, 2012.

(4)The grounds upon which the gambling establishment described in paragraph (3) is located are directly or indirectly owned by a racetrack limited partnership owner. For purposes of this paragraph, a “racetrack limited partnership owner” is defined as a limited partnership, or a number of related limited partnerships, that is or are at least 80 percent capitalized by limited partners that are an “institutional investor” as defined in subdivision (w) of Section 19805, an “employee benefit plan” as defined in Section 1002(3) of Title 29 of the United States Code, or an investment company that manages a state university endowment.

(d)Within three years of the date the closed business or organization reopens or becomes engaged in any form of gambling prohibited by Section 330 of the Penal Code, a person described in subdivision (c) shall either divest that person’s interest in the business or organization, or divest that person’s

interest in the gambling enterprise or gambling establishment for which the person is licensed or has applied to be licensed by the commission.

(e)A person described in subdivision (c) shall inform the commission within 30 days of the date on which a business or organization in which the person has a financial interest begins to engage in any form of gambling prohibited by Section 330 of the Penal Code.

(f)During the three-year divestment period described in subdivision (d), it is unlawful for any cross-promotion or marketing to occur between the business or organization that is engaged in any form of gambling prohibited by Section 330 of the Penal Code and the gambling enterprise or gambling establishment described in paragraph (3) of subdivision (c). For purposes of this subdivision, “cross-promotion or marketing” means the offering to any customers of the gambling enterprise

or gambling establishment anything of value related to visiting or gambling at the business or organization engaged in any form of gambling prohibited by Section 330 of the Penal Code.

(g)During the three-year divestment period described in subdivision (d), any funds used in connection with the capital improvement of the gambling enterprise or gambling establishment described in paragraph (3) of subdivision (c) shall not be provided from the gaming revenues of either the business or organization engaged in gaming prohibited under Section 330 of the Penal Code.

(h)If, at the end of the three-year divestment period described in subdivision (d), any person described in subdivision (c) has not

divested his or her interest in either the gambling enterprise or gambling establishment or the business or organization engaged in any form of gaming prohibited under Section 330 of the Penal Code, the prohibitions of Section 19858 as it read on January 1, 2013, apply.

§ 19858.5

Added by Stats. 2007, Ch. 294, Sec. 2. Effective October 5, 2007.

Notwithstanding Section 19858, the commission may, pursuant to this chapter, deem an applicant or licensee suitable to hold a state gambling license even if the applicant or licensee has a financial interest in another business that conducts lawful gambling outside the state that, if conducted within California, would be unlawful, provided that an applicant or licensee may not own, either directly or indirectly, more than a 1 percent interest in, or have control of, that business.

§ 19859

Amended by Stats. 2024, Ch. 138, Sec. 1. (SB 1519) Effective January 1, 2025.

The commission shall deny a license to any applicant who is disqualified for any of the following reasons:

(a)Failure of the applicant to clearly establish eligibility and qualification in accordance with this chapter.

(b)Failure of the applicant to provide information, documentation, and assurances required by this chapter or requested by the chief, or failure of the applicant to reveal any fact material to qualification, or the supplying of information that is untrue or misleading as to a material fact pertaining to the qualification criteria.

(c)(1) Except as provided in paragraph (2), conviction of a felony, including a conviction

by a federal court or a court in another state for a crime that would constitute a felony if committed in California.

(2)A conviction of a felony for the possession of cannabis, the facts of which would not constitute a felony or misdemeanor under California law on the date the application for a license is submitted, shall not constitute a basis to deny a license pursuant to this section.

(d)(1) Conviction of the applicant, in the State of California,

for any misdemeanor involving dishonesty or moral turpitude within the 10-year period immediately preceding the submission of the application, unless the applicant has been granted relief pursuant to Section 1203.4, 1203.4a, or 1203.45 of the Penal Code; provided, however, that the granting of relief pursuant to Section 1203.4, 1203.4a, or 1203.45 of the Penal Code shall not constitute a limitation on the discretion of the commission under Section 19856 or affect the applicant’s burden under Section 19857.

(2)Conviction of the applicant, in another state, for any misdemeanor involving dishonesty or moral turpitude within the 10-year period immediately preceding the submission of the application, unless the conviction has been expunged under the laws of the jurisdiction in which the applicant was convicted; provided, however, that the expungement of

the conviction shall not constitute a limitation on the discretion of the commission under Section 19856 or affect the applicant’s burden under Section 19857.

(e)Association of the applicant with criminal profiteering activity or organized crime, as defined by Section 186.2 of the Penal Code.

(f)Contumacious defiance by the applicant of any legislative investigatory body, or other official investigatory body of any state or of the United States, when that body is engaged in the investigation of crimes relating to gambling; official corruption related to gambling activities; or criminal profiteering activity or organized crime, as defined by Section 186.2 of the Penal Code.

(g)The applicant is less than 21 years of age, except as provided by this

chapter.

§ 19860

Added by renumbering Section 19851A by Stats. 2002, Ch. 738, Sec. 45. Effective January 1, 2003.

(a)The commission shall deny a gambling license with respect to any gambling establishment that is located in a city, county, or city and county that does not have an ordinance governing all of the following matters:

(1)The hours of operation of gambling establishments.

(2)Patron security and safety in and around the gambling establishments.

(3)The location of gambling establishments.

(4)Wagering limits in gambling establishments.

(5)The number of gambling tables in each gambling establishment and in the jurisdiction.

(b)In any city, county, or city and county in which the local gambling ordinance does not govern the matters specified in subdivision (a), any amendment to the ordinance to govern those matters is not subject to Section 19961, provided that a local election is required to add these matters, and the ordinance only provides for private clubs by vote of the people, and that the ordinance is amended to contain these matters on or before July 1, 2000.

§ 19861

Amended by Stats. 2016, Ch. 86, Sec. 16. (SB 1171) Effective January 1, 2017.

(a)Notwithstanding subdivision (j) of Section 19801, the commission shall not deny a license to a gambling establishment solely because it is not open to the public, if all of the following are true:

(1)The gambling establishment is situated in a local jurisdiction that has an ordinance allowing only private clubs, the gambling establishment was in operation as a private club under that ordinance on December 31, 1997, and it met all applicable state and local gaming registration requirements.

(2)The gambling establishment consists of no more than five gaming tables.

(3)Video recordings of the entrance to the gambling room or rooms and

all tables situated therein are made during all hours of operation by means of closed-circuit television cameras, and these recordings are retained for a period of 30 days and are made available for review by the department upon request.

(4)The gambling establishment is open to members of the private club and their spouses in accordance with membership criteria in effect as of December 31, 1997.

(b)A gambling establishment meeting the criteria set forth in subdivision (a), in addition to the other requirements of this chapter, may be licensed to operate as a private club gambling establishment until November 30, 2003, or until the ownership or operation of the gambling establishment changes from the ownership or operation as of January 1, 1998, whichever occurs first. Operation of the gambling establishments after this date shall only be permitted if the local jurisdiction

approves an ordinance, pursuant to Sections 19961 and 19962, authorizing the operation of gambling establishments that are open to the public. The commission shall adopt regulations implementing this section. Before the commission’s issuance of a license to a private club, the department shall ensure that the ownership of the gambling establishment has remained constant since January 1, 1998, and the operation of the gambling establishment has not been leased to a third party.

§ 19862

Amended by Stats. 2021, Ch. 45, Sec. 2. (AB 120) Effective January 1, 2022.

(a)In addition to other grounds stated in this chapter, the commission may deny a gambling license for any of the following reasons:

(1)If issuance of the license with respect to the proposed gambling establishment or expansion would tend unduly to create law enforcement problems in a city, county, or city and county other than the city, county, or city and county that has regulatory jurisdiction over the applicant’s premises.

(2)If an applicant fails to conduct an economic feasibility study that demonstrates to the satisfaction of the commission that the proposed gambling establishment will be economically viable, and that the owners have sufficient

resources to make the gambling establishment successful. The commission shall hold a public

meeting for the purpose of reviewing the feasibility study. All papers, studies, projections, pro formas, and other materials filed with the commission pursuant to an economic feasibility study are public records and shall be disclosed to all interested parties.

(3)If issuance of the license is sought in respect to a new gambling establishment, or the expansion of an existing gambling establishment, that is to be located or is located near an existing school, an existing building used primarily as a place of worship, an existing playground or other area of juvenile congregation, an existing hospital, convalescence facility, or near another similarly unsuitable area, as determined by regulation of the commission, which is located in a city, county, or city and county other than the city, county, or city and county that has regulatory jurisdiction over the applicant’s gambling premises.

(b)For the purposes of this section, “expansion” means an increase of 25 percent or more in the number of authorized gambling tables in a gambling establishment, based on the number of gambling tables for which a license was initially issued pursuant to this chapter.

§ 19863

Added by renumbering Section 19852.1 by Stats. 2002, Ch. 738, Sec. 48. Effective January 1, 2003.

A publicly traded racing association or a qualified racing association shall be allowed to operate only one gaming establishment, and the gaming establishment shall be located on the same premises as the entity’s racetrack.

§ 19864

Amended by Stats. 2013, Ch. 353, Sec. 5. (SB 820) Effective September 26, 2013. Operative July 1, 2013, by Sec. 129 of Ch. 353.

(a)Application for a state license or other commission action shall be submitted to the department on forms furnished by the department.

(b)The application for a gambling license shall include all of the following:

(1)The name of the proposed licensee.

(2)The name and location of the proposed gambling establishment.

(3)The gambling games proposed to be conducted.

(4)The names of all persons directly or indirectly

interested in the business and the nature of the interest.

(5)A description of the proposed gambling establishment and operation.

(6)Any other information and details the commission may require in order to discharge its duties properly.

§ 19865

Amended by Stats. 2007, Ch. 176, Sec. 20. Effective August 24, 2007.

The department shall furnish to the applicant supplemental forms, which the applicant shall complete and file with the department. These supplemental forms shall require, but shall not be limited to requiring, complete information and details with respect to the applicant’s personal history, habits, character, criminal record, business activities, financial affairs, and business associates, covering at least a 10-year period immediately preceding the date of filing of the application. Each applicant shall submit two sets of fingerprints, using “live scan” or other prevailing, accepted technology, or on forms provided by the department. The department may submit one fingerprint card to the United States Federal Bureau of Investigation.

§ 19866

Amended by Stats. 2007, Ch. 176, Sec. 21. Effective August 24, 2007.

An applicant for licensing or for any approval or consent required by this chapter, shall make full and true disclosure of all information to the department and the commission as necessary to carry out the policies of this state relating to licensing, registration, and control of gambling.

§ 19867

Amended by Stats. 2007, Ch. 438, Sec. 6. Effective January 1, 2008.

(a)An application for a license or a determination of suitability shall be accompanied by the deposit of a sum of money that, in the judgment of the chief, will be adequate to pay the anticipated costs and charges incurred in the investigation and processing of the application. The chief shall adopt a schedule of costs and charges of investigation for use as guidelines in fixing the amount of any required deposit under this section. The schedule shall distinguish between initial and renewal licenses with respect to costs and charges.

(b)During an investigation, the chief may require an applicant to deposit any additional sums as are required by the department to pay final costs and charges of the investigation.

(c)Any money received from an applicant in excess of the costs and charges incurred in the investigation or the processing of the application shall be refunded pursuant to regulations adopted by the department. At the conclusion of the investigation, the chief shall provide the applicant a written, itemized accounting of the costs and charges thereby incurred.

§ 19868