Gambling: Internet poker: unlawful gambling activity.

(1) Existing law, 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. The Department of Justice has related investigatory and enforcement duties under the act. Any violation of these provisions is punishable as a misdemeanor, as specified. This bill, which would be known as the Internet Poker Consumer Protection Act of 2015, would establish a framework to authorize intrastate Internet poker, as specified. The bill would authorize eligible entities to apply to the commission for a 10-year nontransferable license to operate an intrastate Internet poker Web site offering the play of authorized Internet poker games to registered players within California, as specified. The bill would require that the license be automatically renewed every 10 years upon application, as specified. The bill would prohibit the offer or play of any gambling game provided over the Internet that is not an authorized Internet poker game permitted by the state pursuant to this bill. The bill would provide that it is unlawful for a person to aggregate computers or any other device with Internet access capabilities in a place of public accommodation within the state, including a public or private club or other association, in a public or private setting, that can accommodate multiple players to simultaneously play authorized games on the Internet, or to promote, facilitate, or market that activity. The bill would provide that any violation of the Internet Poker Consumer Protection Act of 2015 is punishable as a misdemeanor. By creating new crimes, the bill would impose a state-mandated local program. This bill would require the commission, and any other state agency with a duty pursuant to these provisions, to adopt regulations within 180 days after the operative date of this bill, in consultation with the department and federally recognized California Indian tribes, to implement these provisions, and to facilitate the operation of authorized poker Web sites and expedite the state's receipt of revenues. The bill would require an eligible entity, as defined, to pay an application processing fee sufficient to cover all reasonable costs associated with the issuance of the license, for deposit into the Internet Poker Fund, as created by the bill, to be continuously appropriated to the department and the commission in the amounts necessary to perform their duties pursuant to this bill. An operator license applicant that is a federally recognized Indian tribe also would be required to submit a limited waiver of its sovereign immunity. The bill would require a service provider to apply to the commission for a service provider license before providing goods or services to a licensed operator in connection with the operation of an authorized poker Web site and pay an application processing fee sufficient to cover the reasonable costs associated with the issuance of the license. The bill would require the department to review the suitability of a service provider applicant and would require the department, prior to issuing a service provider license, to issue a finding of suitability and conduct a full investigation of the service provider license applicant. The bill would require a marketing affiliate to apply to the commission for a marketing affiliate license or registration before providing marketing services to a licensed operator in connection with the operation of an authorized poker Web site and pay an application processing fee sufficient to cover the reasonable costs associated with the issuance of the license. Except as provided, the bill would require the department to review the suitability of a marketing affiliate license or registration applicant and would require the department, prior to issuing a license or registration, to issue a finding of suitability and conduct a full investigation of the marketing affiliate license or registration applicant. The bill would require employees of a licensed operator, a licensed service provider, or a licensed or registered marketing affiliate to obtain employee work permits, and owners, officers, and directors of a licensed operator to be subject to a suitability review and obtain employee work permits, and would authorize the commission to refuse to issue a license to, or suspend or revoke a license of, a licensed operator that fails to comply with these requirements. The bill would establish a tribal gaming regulatory authority process for the purpose of processing employee work permits, and authorize a tribe that is a licensed operator to elect to participate in the tribal gaming regulatory authority process. This bill would authorize the commission to revoke or suspend any license or work permit upon reaching a finding that the licensee or employee is in violation of the provisions described above, or any regulation adopted pursuant to these provisions. However, the bill would prohibit a tribal licensee from having its license suspended or revoked, or being fined or otherwise penalized for complying with any applicable federal law or regulation when operating an authorized poker Web site on Indian lands. The bill would specify that to the extent that any state requirement is more strict than any applicable federal law requirement, the tribal licensee is required to comply with the state requirement. This bill would require a registered player account to be established in person, and would also require that specified deposits into and withdrawals out of those accounts be made in person. In order to satisfy those in-person requirements, the bill would authorize a licensed operator to enter into an agreement for the operation of one or more satellite service centers, which would be authorized to act on behalf of, or in coordination with, the licensed operator in carrying out those in-person requirements. The bill would require a licensed operator to ensure, among other things, that the satellite service center is financially, logistically, and technologically capable of performing specified duties in accordance with the bill's provisions. The bill would provide that both the satellite service center and the licensed operator may be held liable for any violation of the bill's provisions arising out of an agreement between the satellite service center and the licensed operator to provide specified in-person services. The bill would also authorize the commission to promulgate regulations regarding satellite service centers for the protection of licensed operators, registered players, and intrastate Internet poker, or that otherwise serve the purposes of the bill. This bill would require the payment of an annual regulatory fee, for deposit into the Internet Poker Fund, to be continuously appropriated for the actual costs of license oversight, consumer protection, state regulation, and other purposes related to this bill. The bill would require each licensee to pay a one-time license deposit into the General Fund in the amount of $5,000,000. The license deposit would be credited against quarterly fees equivalent to 5% of the licensee's gross gaming revenue proceeds, as specified. The bill would require an applicant for an operator license to provide documentation establishing that the applicant is qualified to pay the one-time license deposit through its own net position or through credit directly to the applicant, as specified. This bill would establish the Unlawful Gambling Enforcement Fund within the General Fund for purposes of ensuring adequate resources for law enforcement charged with enforcing the prohibitions and protections of the provisions described above. The bill would authorize the Attorney General, and other public prosecutors, as specified, to bring a civil action to recover a civil penalty in an unspecified amount against a person who engages in those prohibited activities described above, or other specified unlawful gambling activities. The bill would provide for an unspecified percentage of revenues from civil penalties collected to be deposited into the fund and used for law enforcement activities pursuant to these provisions, upon appropriation by the Legislature. This bill would require the commission, in consultation with the department, the Treasurer, and the Franchise Tax Board, to issue a report to the Legislature describing the state's efforts to meet the policy goals articulated in this bill within one year of the operative date of this bill and, annually, thereafter. The bill would also require the Bureau of State Audits, at least 4 years after the issue date of any license by the state, but no later than 5 years after that date, to issue a report to the Legislature detailing the implementation of this bill, as specified. This bill would require the state to affirmatively elect to be subject to a federal Internet gambling law, and would prohibit the state from participating in any Internet gambling agreement between states or foreign jurisdictions without an affirmative legislative act. The bill would provide that if the state elects to be subject to a federal Internet gambling law or to participate in an Internet gambling agreement between states or foreign jurisdictions, an operator licensee shall not be required to pay the one-time license fee or the quarterly fees described above and would require the state to refund within 30 days all unused license fees paid to the state, as specified. The bill would authorize a licensee to enforce this provision in the superior court. The bill would provide that specified provisions are not severable. (2) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. This bill would make legislative findings to that effect. (3) 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. This bill would provide that no reimbursement is required by this act for a specified reason. (4) This bill would declare that it is to take effect immediately as an urgency statute.