BILL NUMBER: AB 167	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Jones-Sawyer

                        JANUARY 22, 2015

   An act to add Chapter 5.2 (commencing with Section 19990.101) to
Division 8 of the Business and Professions Code, relating to
gambling, making an appropriation therefor, and declaring the urgency
thereof, to take effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 167, as introduced, Jones-Sawyer. 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 for a 4-year license to operate an
authorized 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 4 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 these provisions. The bill would provide that it is
unlawful for a person to aggregate computers or any other Internet
access device in a place of public accommodation within the state,
including a club or other association, or a public or other setting,
that can accommodate multiple players to simultaneously play an
authorized Internet poker game, 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
felony. 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 to
implement the provisions within 270 days after the operative date of
this bill, in consultation with the department and federally
recognized California Indian tribes, 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 review of the entity's suitability for
licensure and 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. The bill
would require an entity seeking to act as a service provider to apply
for a service provider license, employees of a licensed operator or
a licensed service provider 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. The bill
would establish a tribal gaming regulatory authority process for the
purpose of processing tribal 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 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 $10,000,000. The
license deposit would be credited against quarterly fees equivalent
to 8.5% 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.
   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.
   Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Chapter 5.2 (commencing with Section 19990.101) is
added to Division 8 of the Business and Professions Code, to read:
      CHAPTER 5.2.  THE INTERNET POKER CONSUMER PROTECTION ACT OF
2015



      Article 1.  Title, Legislative Declarations, and Statement of
Legislative Intent


   19990.101.  This chapter shall be known and may be cited as the
Internet Poker Consumer Protection Act of 2015.
   19990.102.  The Legislature hereby finds and declares all of the
following:
   (a) Since the development of the Internet, Web sites offering
gambling have raised consumer protection and enforcement concerns for
federal and state governments as these Internet Web sites are often
operated by unknown persons located in many different countries,
subject to little or no oversight, and have sought to attract
customers from the United States.
   (b) Californians participate in illegal online gambling on
unregulated Internet Web sites every week. Neither federal nor
California laws provide any consumer protections for California
players. California players assume all risks, any negative social or
financial impacts are borne by the citizens of California, and the
revenues generated from online gambling are being realized by
offshore operators and do not provide any benefits to the citizens of
California.
   (c) The presence, operation, and expansion of offshore,
unlicensed, and unregulated Internet gambling Web sites available to
Californians endanger Californians because the current Internet
gambling Web sites operate illegally and without regulation as
demonstrated by criminal investigations of some Internet gambling
purveyors, and questions have arisen about the honesty and the
fairness of the games played on Internet gambling Web sites as well
as the true purpose for, and use of, proceeds generated by these
unregulated Internet gambling Web sites. In addition, some of the
unlicensed and unregulated Internet gambling activity interferes with
rights Californians preserved to federally recognized tribal
governments when amending the state's Constitution, with that
amendment providing tribes the sole and exclusive right to engage in
slot machine and house-banked casino-style gaming in California.
California, thus, has a state interest in authorizing and regulating
legitimate Internet poker and in ensuring that those activities are
consistent with existing public policy regarding the playing of poker
games within the state. The public interest will be best served by
requiring that those entities who desire to own or operate Internet
poker Web sites within the state continue to comply with the existing
standards and rigorous scrutiny that must be met in order to qualify
to offer poker games within the state.
   (d) These rights were separately guaranteed in 1999, and at
various times thereafter, when the state negotiated and entered into
compacts with tribes pursuant to the federal Indian Gaming Regulatory
Act of 1988 (IGRA), under which signatory tribes possess the
exclusive right within the state to operate "gaming devices." "Gaming
device" is defined in those compacts to include any electronic,
electromechanical, electrical, or video device that, for
consideration, permits: individual play with or against that device
or the participation in any electronic, electromechanical,
electrical, or video system to which that device is connected; the
playing of games thereon or therewith, including, but not limited to,
the playing of facsimiles of games of chance or skill; the possible
delivery of, or entitlement by the player to, a prize or something of
value as a result of the application of an element of chance; and a
method for viewing the outcome, prize won, and other information
regarding the playing of games thereon or therewith. Internet gaming
necessitates the use of an electronic device, whether in a private or
a public setting, to participate in a game. The authorization of
Internet gaming could, therefore, constitute a breach of those
compacts and jeopardize the payments being made to the state. As
such, the Legislature recognizes that the forms of Internet gaming
authorized to be played within the state must be strictly limited and
that the authorization of any form of Internet gaming, with the
exception of poker as described in this chapter, would violate
compact exclusivity. This includes, but is not limited to, any slot
or casino-style game.
   (e) Tribally owned and operated casinos have contributed to local
economies, generated tens of thousands of jobs for Californians,
provided hundreds of millions of dollars in revenues for the state
since the advent of Indian gaming, and are entitled to the full
protection of the laws of this state. As such, the state is presently
engaged in regulatory and enforcement efforts to combat the rise of
illegal gambling activity that threatens not only protected rights,
but the health and welfare of all Californians.
   (f) In October 2006, Congress passed the SAFE Port Act (Public Law
109-347), to increase the security of United States ports. Embedded
within the language of that act was a section entitled the Unlawful
Internet Gambling Enforcement Act of 2006 (UIGEA), which prohibits
the use of banking instruments, including credit cards, checks, or
fund transfers, for interstate Internet gambling. UIGEA includes
exceptions, including, but not limited to, one that permits
individual states to create a regulatory framework to enable
intrastate Internet gambling, provided the bets or wagers are made
exclusively within a single state whose state laws or regulations
comply with all of the following:
   (1) Contain certain safeguards regarding those transactions,
including both of the following:
   (A) Age and location verification requirements.
   (B) Data security standards designed to prevent access to minors
and persons located outside of that state.
   (2) Expressly authorize the bet or wager and the method by which
the bet or wager is made.
   (3) Do not violate any federal gaming statutes, including all of
the following:
   (A) The Interstate Horseracing Act of 1978.
   (B) The Professional and Amateur Sports Protection Act.
   (C) The Gambling Devices Transportation Act.
   (D) IGRA.
   (g) State authorization to operate Internet poker consistent with
federal law, and heightened regulation and enforcement regarding
Internet gambling activity that goes beyond poker, provides
California with the means to protect its citizens and consumers under
certain conditions by providing a framework to ensure that, among
other things, the state is not subject to an unnecessary and
unprecedented expansion of gambling, minors are prevented from
gambling, citizens participating in Internet poker activities are
protected, and the state is not deprived of income tax revenues to
which it would otherwise be entitled from these activities.
   (h) The Legislature recognizes that the regulation of gambling
activities within the state's jurisdiction is of particular concern
to the public interest, particularly with the advent of the Internet,
and inherent dangers associated with online gambling activities, and
accordingly recognizes the need to protect Californians from an
unprecedented expansion of gambling activities within the state. This
chapter is a vehicle to generate additional resources to protect
Californians from this increased illegal Internet gambling activity.
   (i) The state currently maintains and implements substantial
regulatory and law enforcement efforts to protect thousands of
Californians who gamble and play, among other things, real-money
poker in licensed California card rooms.
   (j) Federally recognized Indian tribes in California offer
real-money poker, including electronically aided poker, on their
Indian lands as a "class II" game under IGRA.
   (k) While the state, federal government, and tribal governments
exercise regulatory authority over various real-money poker games
offered in California, none of those entities presently provide
licensing requirements, regulatory structure, or law enforcement
tools to protect millions of Californians who play the same games
daily for money on the Internet.
   (l) In order to protect Californians who gamble online, allow
state law enforcement to ensure consumer protection, and ensure
compliance with the California Constitution and negotiated compacts
and secretarial procedures, it is in the best interest of the state
and its citizens to authorize, implement, and create a legal system
for intrastate Internet gambling that is limited to the game of
poker.
   (m) The California Gambling Control Commission and the Department
of Justice, in conjunction with other state agencies and tribal
gaming regulatory authorities, have the expertise to issue licenses
to conduct intrastate Internet poker to existing operators of
regulated gaming. Further, strict suitability standards must be
imposed on those persons and entities seeking to work for or provide
services to licensed operators in order to ensure that the highest
level of integrity is maintained.
   (n) The state also possesses a legitimate interest in protecting
the integrity of state-authorized intrastate Internet poker by
licensing those entities that have significant experience operating
in a regulated land-based gaming facility environment. The state's
interests are best met, therefore, by licensing only those entities
in California that are currently permitted to offer gaming activities
and are in good standing with the appropriate state, federal, and
tribal regulatory agencies.
   (o) This chapter will permit a qualified card room, horseracing
association, or federally recognized California Indian tribe, to
obtain a license from the state to operate authorized poker games via
the Internet for players within the jurisdiction of California.
   (p) Participation by tribes will further the interests of the
state because tribes have significant experience operating and
regulating real-money games.
   (q) The authorization of intrastate Internet poker pursuant to
this chapter does not violate any tribal-state compact or the
California Constitution. Application of UIGEA in California, as set
forth in this chapter, also does not violate federal Indian law by
impinging upon protected tribal sovereignty. Accordingly, nothing in
this chapter shall alter, diminish, or impact the rights and
obligations of tribes in existing tribal-state compacts or
secretarial procedures approved pursuant to IGRA, or require that
those compacts be renegotiated. At the same time, a tribal licensee
does not relinquish any rights under its compact with the state by
virtue of participating in intrastate Internet poker pursuant to this
chapter, which is intended to respect the regulatory obligations and
responsibilities of state, tribal, and federal authorities.
   19990.103.  It is the intent of the Legislature to create a
licensing and regulatory framework and enforcement mechanisms to do
all of the following:
   (a) Ensure that authorized Internet poker games are offered for
play only in a manner that is consistent with federal and state law.
   (b) Ensure the state possesses sufficient resources to enforce
prohibitions of illegal gambling activity, in part, by establishing a
regulatory enforcement fund and by empowering the department to
retain a portion of receipts collected from illegal operations and,
as necessary, receipts collected in accordance with this chapter.
   (c) Authorize and direct the commission to issue a license to
certain existing operators of land-based gaming facilities in
California that meet the eligibility requirements and timely submit
the required application and registration fees pursuant to this
chapter.
   (d) Ensure that each licensee complies with applicable laws and
regulations.
   (e) Grant power to the state agencies authorized in this chapter
to oversee the operations of each licensee, including the operations
of those licensed by a tribal gaming regulatory authority under this
chapter whose licenses and permits have been reviewed and approved by
the commission in accordance with this chapter, and to enforce the
provisions of this chapter to ensure that the interests of the state
and registered players are protected.
   (f) Establish a process that includes a determination of
suitability of owners, officers, directors, and key employees,
requires that each employee of a licensee receives all necessary work
permits from the state, and coordinates that investigation with any
suitability review undertaken by a participating tribe's gaming
regulatory authority.
   (g) Ensure that the state is able to collect income tax revenues
from registered players participating in Internet poker activity in
the state.
   (h) Deposit regulatory fees collected by the state from each
licensed operator into the Internet Poker Fund, as established in
Section 19990.801, which shall be administered by the department, and
continuously appropriated for the following:
   (1) The actual costs of license oversight, consumer protection,
state regulation, and problem gambling programs.
   (2) Other purposes related to this chapter as the Legislature may
decide, including, but not limited to, enforcement efforts related to
illegal Internet gambling activities.
   (i) Create systems to protect each registered player's private
information and prevent fraud and identity theft.
   (j) Ensure that registered players are able to have their
financial transactions processed in a secure, timely, and transparent
fashion.
   (k) Require that each licensed operator provide registered players
with accessible customer service.
   (l) Require that each licensed operator's Internet poker Web site
contain information relating to problem gambling, including a
telephone number that an individual may call to seek information and
assistance for a potential gambling addiction.
   (m) Ensure that the licensed operator maintains responsibility for
the Internet poker business and is not serving as a facade for an
entity not eligible to be a licensed operator. The Internet poker Web
site shall identify who is the actual licensed operator to ensure
protection of players.
   (n) Create an express exemption from disclosure, pursuant to the
California Public Records Act under subdivision (b) of Section 6253
of the Government Code, that exempts from public disclosure
proprietary information of a license applicant or a licensee in order
to permit disclosure of confidential information to state agencies
while achieving the public policy goals of deploying secure systems
that protect the interests of both the state and players.
   (o) As a matter of statewide concern, preempt any city, county, or
city and county from enacting any law or ordinance regulating or
taxing any matter covered in this chapter.

      Article 2.  Definitions


   19990.201.  For the purposes of this chapter, the following words
have the following meanings:
   (a) "Authorized Internet poker game" means any of several card
games, duly authorized by the department and played on an authorized
poker Web site, that meet the definition of poker as specified by
this section.
   (b) "Authorized poker Web site" means a Web site on which
authorized Internet poker games are offered for play by a licensed
operator pursuant to this chapter.
   (c) "Background investigation" means a process of reviewing and
compiling personal and criminal history and financial information
through inquiries of various law enforcement and public sources to
establish a person's qualifications and suitability for any necessary
license or employee work permit issued pursuant to this chapter.
   (d) "Bet" means the placement of a wager in a game.
   (e) "Card room" means a gambling enterprise, as defined in
subdivision (m) of Section 19805.
   (f) "Commission" means the California Gambling Control Commission.

   (g) "Core functions" and "core functioning" mean any of the
following:
   (1) The management, administration, or control of bets on
authorized Internet poker games.
   (2) The management, administration, or control of the games with
which those bets are associated.
   (3) The development, maintenance, provision, or operation of a
gaming system.
   (h) "Corporate affiliate" means any person controlled by,
controlling, or under common ownership with, another person or
entity. A person or entity will be deemed to control another person
or entity if it possesses, directly or indirectly, the power to
direct the management or policies of the other entity, whether
through ownership of voting interests or otherwise, or if, regardless
of whether or not it has that power, it holds 10 percent or more of
the ownership or control of the other entity, whether as a
stockholder, partner, member, trust interest, or otherwise.
   (i) "Department" means the Department of Justice.
   (j) "Determination of suitability," or "suitability review" means
the process, including, but not limited to, conducting a background
investigation, to determine whether an applicant for a license or
employee work permit issued pursuant to this chapter meets the
qualification criteria described in this chapter or whether the
applicant is disqualified on any of the grounds specified in this
chapter.
   (k) (1) (A) "Eligible entity" includes all of the following:
   (i) A card room that operates pursuant to Chapter 5 (commencing
with Section 19800) whose owner or owners have been authorized,
subject to oversight by, and in good standing with, the applicable
state regulatory authorities.
   (ii) A federally recognized California Indian tribe that operates
a gaming facility pursuant to a facility license issued in accordance
with a tribal gaming ordinance approved by the Chair of the National
Indian Gaming Commission and that is eligible to conduct real-money
poker at that facility.
   (iii) A California-owned and operated horse racing association
that is based in California and that operates pursuant to Chapter 4
(commencing with Section 19400), whose owner or owners have been
authorized, subject to oversight by, and in good standing with, the
applicable state regulatory authorities.
   (B) An entity identified in this paragraph shall have operated its
land-based gaming facility for at least five years immediately
preceding its application to secure a license to operate an Internet
poker Web site pursuant to this chapter, and shall be in good
standing during that time period with the applicable federal, state,
and tribal regulatory authorities.
   (2) A group consisting of any combination of tribes, card rooms,
and horse racing associations is eligible to jointly apply for a
license pursuant to this chapter, through an entity organized under
state or federal law, if each entity within the group independently
satisfies the requisite eligibility requirements identified in this
chapter.
   (3) Subject to any applicable limited waiver of sovereign immunity
as set forth in subdivision (d) of Section 19990.402, this chapter
does not restrict a tribal licensee from participating as an
instrumentality of a tribal government or a political subdivision of
a tribe, or from forming a separate business entity organized under
federal, state, or tribal law.
   (4) A tribe that operates a gaming facility that accepts bets from
players within this state but who are not physically present on
Indian lands when making those bets is not an eligible entity, unless
those bets are accepted on authorized Internet poker games played on
an authorized poker Web site.
   (l) "Employee" means any natural person employed in, or serving as
a consultant or independent contractor with respect to, the core
functioning of the actual operation of an authorized poker Web site.
   (m) "Employee work permit" means a permit issued to an employee of
the licensed operator or a service provider, or to a nonemployee
owner, officer, or director of a licensed operator, by the commission
pursuant to this chapter.
   (n) "Gambling" means to deal, operate, carry on, conduct,
maintain, or expose for play any game for money.
   (o) "Game" means any gambling game.
   (p) "Gaming system" means the technology, including hardware and
software, used by a licensee to facilitate the offering of authorized
Internet poker games to registered players.
   (q) "Good standing" means that a person has not had a gambling
license suspended or revoked by a final decision of the commission or
been finally ordered by a court of competent jurisdiction to cease
conducting gaming activities.
   (r) (1) "Gross gaming revenues" means the total amount of moneys
paid by players to the operator to participate in authorized games
before deducting the cost of operating those activities except for
fees to marketing affiliates and payment processing fees.
   (2) "Gross gaming revenues" do not include player account deposits
or amounts bet, except to the extent any portion of those bets are
retained as fees by the operator, discounts on goods or services,
rebates or promotional discounts or stakes provided to players, or
revenues from nongaming sources, such as from food, beverages,
souvenirs, advertising, clothing, and other nongaming sources.
   (s) "IGRA" means the federal Indian Gaming Regulatory Act of 1988
(18 U.S.C. Sec. 1166 et seq. and 25 U.S.C. Sec. 2701 et seq.).
   (t) "Initial operator license" means an operator license that is
issued pursuant to subdivision (h) of Section 19990.402.
   (u) "Internet access device" means a personal computer or mobile
communications device used for connecting to the Internet.
   (v) "Internet Poker Fund" means the fund established pursuant to
Section 19990.801.
   (w) "Intrastate" means within the borders and jurisdiction of
California.
   (x) "Key employee" means any natural person employed by a licensed
operator, service provider, or marketing affiliate, or by a holding
or intermediary company of a licensed operator, service provider, or
marketing affiliate, who is an officer or director of the licensed
operator or service provider, or who, in the judgment of the
commission, has the authority to exercise significant influence over
decisions concerning the operation of the licensed operator or
service provider as that operation relates to the Internet poker
authorized by this chapter.
   (y) "Land-based gaming facility" means a gambling establishment,
as defined in subdivision (o) of Section 19805, that is operated
pursuant to Chapter 5 (commencing with Section 19800), a horse
racetrack that is operated pursuant to Chapter 4 (commencing with
Section 19400), or a casino operated by a tribe on Indian land in
California.
   (z) "Licensed operator" means an eligible entity licensed pursuant
to this chapter to offer the play of authorized Internet poker games
to registered players on an authorized poker Web site.
   (aa) "Licensed service provider" means a person licensed pursuant
to this chapter to provide goods or services to a licensed operator
for use in the operation of an authorized poker Web site.
   (ab) "Licensee" means a licensed operator or licensed service
provider.
   (ac) "Net position" means the residual difference between assets
and liabilities, as defined by generally accepted accounting
principles.
   (ad) "Online self-exclusion form" means a form on which an
individual notifies a licensed operator that he or she must be
excluded from participation in authorized Internet poker games for a
stated period of time.
   (ae) "Owner" means any person that is eligible to own a land-based
gaming facility in California and that has a financial interest in,
or control of, a person or entity required to be found suitable under
this chapter, including shareholders, partners, and members of
limited liability companies holding more than 10 percent of the
equity or voting control of the person or entity and any person found
by the commission to be exerting management or control of the person
or entity in fact. An owner of a licensed operator shall include
only those persons eligible to own a land-based gaming facility in
California. "Owner" does not include the members or government
officials of a tribe.
   (af) "Per hand charge" means the amount charged by the licensed
operator for registered players to play in a per hand game.
   (ag) "Per hand game" means an authorized Internet poker game for
which the licensed operator charges the player for each hand played.
   (ah) "Person" means an individual, corporation, business trust,
estate, trust, partnership, limited liability company, association,
joint venture, government, governmental subdivision, agency, or
instrumentality, public corporation, or any other legal or commercial
entity, including any federally recognized California Indian tribe,
or an entity that is wholly owned by the tribe.
   (ai) "Play-for-fun game" means a version of a lawfully played
gambling game in which there is no requirement to pay to play or any
possibility of winning any prize or other consideration of value,
including, but not limited to, games offered only for purposes of
training, education, marketing, or amusement.
   (aj) "Play-for-free game" means a version of a lawfully played
gambling game that may include prizes or pots, without requiring a
fee or other consideration for the right to play.
   (ak) "Play settings" means the options and default parameters made
available by a licensed operator to a registered player in the play
of authorized Internet poker games.
   (al) (1) "Poker" means any of several nonbanked card games
commonly referred to as "poker" that meet all of the following
criteria:
   (A) Played by two or more individuals who bet and play against
each player and not against the house on cards dealt to each player
out of a common deck of cards for each round of play, including those
games played over the Internet using electronically generated and
displayed virtual cards.
   (B) The object of the game is to hold or draw to a hand containing
a predetermined number of cards that, when all cards to be dealt in
the round have been distributed and the betting is completed, meets
or exceeds the value of the hands held by the other players. The pot
of bets made is awarded to the player or players holding the
combination of cards that qualify as the winning combination under
the rules of play. Values may be assigned to cards or combinations of
cards in various ways, including in accordance with their face
value, the combinations of cards held, such as cards of a similar
suit or face value, the order of the cards that are held, or other
values announced before the round.
   (C) The house may deal or operate and officiate the game, and may
collect a fee for doing so, but is not a participant in the game
itself. The house has no stake in who wins or loses.
      (D) Poker may be played in a variety of ways, including dealing
all cards to the players so that they may not be seen by others,
dealing the cards open face to the players, dealing through a
combination of both, or creating a common set of cards that may be
used by all players. The particular rules and winning combinations
are made known to the players before each round is dealt.
   (E) All bets are placed in a common pot. At one or more
predetermined points during the game a player may resign, challenge
other players to make additional bets into the pot, or demand that
players reveal their hand so a winner can be determined.
   (F) A poker game that has been approved by the commission for play
in an authorized live poker room in California pursuant to the
Gambling Control Act (Chapter 5 (commencing with Section 19800))
shall be eligible for qualification by the commission as the basis of
an authorized Internet poker gambling game, except that pai gow and
any other game in which persons other than authorized players to whom
the cards in the game have been dealt, and by whom they are held and
played, are permitted to bet on a game outcome or other game feature
or may in any way control or influence the play of the hand, shall
not be authorized, offered, or played in connection with an
authorized Internet poker game. Subject to this limitation, the rules
governing play in an authorized Internet poker game pursuant to this
chapter shall generally be the same as if the game were lawfully
played in a live poker room.
   (G) An authorized Internet poker game shall not include a
player-dealer position.
   (H) Video games, slot machines, and other similar devices that
individuals play against the house or device and win based on
valuations or combinations of cards that are similar to those
valuations or combinations used in live, interactive poker games,
commonly known as "video poker" and "video lottery," are not "poker"
and are not permitted under this chapter.
   (2) Other characteristics defining "poker" pursuant to this
chapter include any of the following:
   (A) Live players with equal chances of winning competing against
each other over the Internet in real time and not against the house
or any device.
   (B) Success over time may be influenced by the skill of the
player.
   (C) The bets of one player may affect the decisions of another
player in the game, and the decisions of one player may affect the
success or failure of another.
   (3) The term "poker" includes poker tournaments in which players
pay a fee to the operator of the tournament under tournament rules
approved by the applicable gaming regulatory agency.
   (am) "Proprietary information" means all information, including,
but not limited to, computer programs, databases, data, algorithms,
formulae, expertise, improvements, discoveries, concepts, inventions,
developments, methods, designs, analyses, drawings, techniques,
strategies, new products, reports, unpublished financial statements,
budgets, projections, billing practices, pricing data, contacts,
client and supplier lists, business and marketing records, working
papers, files, systems, plans, and all related registrations and
applications that, whether or not patentable or registerable under
patent, copyright, trademark, or similar statutes, meets either of
the following:
   (1) The information can be protected as a trade secret under
California law or any other applicable state, federal, or foreign
law.
   (2) The information derives independent economic value, actual or
potential, from not being generally known to the public or to other
persons that can obtain economic value from its disclosure or use.
   (an) "Proxy player" means a machine, device, or agent, other than
the registered player, that is used to play an authorized Internet
poker game.
   (ao) "Registered player" means a player who has registered with a
licensed operator to play authorized Internet poker games on the
licensed operator's authorized poker Web site.
   (ap) "Registration information" means the information provided by
a person to a licensed operator in order to become a registered
player.
   (aq) "Robotic play" means the use of a machine or software to
automate the next player action at any point in a game, including the
use of a proxy player.
   (ar) (1) "Service provider" means any person, other than an
employee, that does any of the following:
   (A) On behalf of a licensed operator, manages, administers, or
controls bets on authorized Internet poker games provided over the
Internet by a licensee pursuant to this chapter.
   (B) On behalf of a licensed operator, manages, administers, or
controls the games with which the bets described in subparagraph (A)
are associated.
   (C) On behalf of a licensed operator, develops, maintains,
provides, or operates a gaming system.
   (D) Sells, licenses, or otherwise receives compensation for
selling or licensing, information on individuals in California who
made bets on games over the Internet that were not authorized
pursuant to this chapter.
   (E) Provides any product, service, financing, or asset to a
licensed operator and is paid a percentage of gaming revenue by the
licensed operator, not including fees to financial institutions and
payment providers for facilitating a deposit by a customer.
   (F) Provides intellectual property, including trademarks, trade
names, service marks, or similar intellectual property under which a
licensed operator identifies its games to its customers.
   (G) Receives compensation as part of an affiliate marketing
program from bringing players or potential players to a licensed
operator's authorized poker Web site.
   (2) "Service provider" does not include a provider of goods or
services that provides similar goods or services to the public for
purposes other than the operation of an authorized poker Web site,
including, but not limited to, payment processors and geolocation
service providers.
   (as) "State" means the State of California.
   (at) "Terms of Use Registered Player's Agreement" means the
agreement offered by a licensed operator and accepted by a registered
player delineating, among other things, permissible and
impermissible activities on an authorized poker Web site and the
consequences of engaging in impermissible activities.
   (au) "Tournament" means a competition approved by the commission
in which registered players play a series of authorized Internet
poker games to decide the winner.
   (av) "Tournament charge" means the amount charged by the licensed
operator for registered players to play in a tournament.
   (aw) "Tournament winnings" means the amount of any prize awarded
to a registered player in a tournament.
   (ax) "Tribal gaming regulatory authority" means the gaming
regulatory authority of a federally recognized California Indian
tribe that has the authority to regulate gaming on the tribe's Indian
lands pursuant to IGRA.
   (ay) "Tribe" means a federally recognized California Indian tribe,
including, but not limited to, the governing body of that tribe or
any entity that is wholly owned by the tribe.
   (az) "Unlawful Gambling Enforcement Fund" means the fund
established pursuant to Section 19990.802, the revenue of which is
dedicated to enforcing the prohibitions of this chapter.

      Article 3.  Intrastate Internet Poker in California


   19990.301.  Under the federal Unlawful Internet Gambling
Enforcement Act of 2006, California is permitted to authorize games
played via the Internet as long as all players and the online
wagering is located within the jurisdiction of the state and the
games are not played by minors.
   19990.302.  Notwithstanding any other law, a person who is 21
years of age or older and located within California is hereby
permitted to participate as a registered player in an authorized
Internet poker game provided by a licensed operator on an authorized
poker Web site.
   19990.303.  (a) A person shall not do any of the following:
   (1) Offer any game of poker on the Internet in this state unless
that person holds a valid license issued by the commission to offer
the play of authorized Internet poker games on an authorized poker
Web site pursuant to this chapter.
   (2) Offer to any player located within California any game
provided on the Internet that is not authorized by the state pursuant
to this chapter.
   (3) As a player located in this state, play any game provided on
the Internet that is not authorized by the state pursuant to this
chapter.
   (b) Subject to an opportunity to cure pursuant to Section
19990.521, a violation of this chapter is a felony, punishable by
imprisonment pursuant to subdivision (h) of Section 1170 of the Penal
Code.
   19990.304.  This chapter does not limit or restrict activities or
conduct permitted pursuant to Chapter 5 (commencing with Section
19800) or IGRA.
   19990.305.  This chapter does not authorize any game offered in
Nevada or New Jersey other than poker.
   19990.306.  A person shall not do either of the following:
   (a) Aggregate computers or any other Internet access device in a
place of public accommodation within the state, including a club or
other association, or a public or other setting, that can accommodate
multiple players to simultaneously play an authorized Internet poker
game.
   (b) Promote, facilitate, or market the activity described in
subdivision (a).
   19990.307.  This chapter does not apply to play-for-fun or
play-for-free games.

      Article 4.  Licensing of Operators and Service Providers


   19990.401.  (a) (1) Within 270 days after the effective date of
this chapter, the commission, and any other state agency with a duty
pursuant to this chapter, shall, in consultation with the department
and tribes, adopt regulations pursuant to the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code) to implement this
chapter, and to facilitate the operation of authorized poker Web
sites and expedite the state's receipt of revenues in compliance with
this chapter. The initial adoption, amendment, or repeal of a
regulation authorized by this section is deemed to address an
emergency, for purposes of Sections 11346.1 and 11349.6 of the
Government Code, and the commission and those other state agencies
are hereby exempted for that purpose from the requirements of
subdivision (b) of Section 11346.1 of the Government Code. After the
initial adoption, amendment, or repeal of an emergency regulation
pursuant to this section, the commission and those other state
agencies shall not request approval from the Office of Administrative
Law to readopt the regulation as an emergency regulation pursuant to
Section 11346.1 of the Government Code, but shall promulgate
permanent regulations in accordance with all applicable law.
   (2) The regulations adopted by the commission shall at a minimum
address all of the following:
   (A) Underage gambling and problem gambling.
   (B) Resolution of player disputes and complaints.
   (C) Gaming system technical standards and practices.
   (D) Hardware and software standards and compliance.
   (E) License and work permit issuance and processes.
   (F) Suitability standards and determinations.
   (G) Temporary, provisional, and emergency approvals.
   (H) Effect of receiverships, bankruptcy, insolvency, inheritance,
and trusts affecting ownership of a licensee.
   (I) Appeals from adverse decisions.
   (3) The regulations adopted by the department shall at a minimum
address all of the following:
   (A) Approval of an authorized Internet poker game.
   (B) Authorized Internet poker game rules.
   (C) Authorized Internet poker gaming activities.
   (D) Registered player-assessed fees, as necessary.
   (b) (1) Each state agency with a duty pursuant to this chapter
shall identify a point of contact at that agency and describe the
responsibility of the contact with respect to the state agency's
duty.
   (2) Any notice provided by a licensee to a state agency pursuant
to this chapter shall be addressed to the contact identified by the
state agency pursuant to paragraph (1).
   (3) Unless otherwise provided by this chapter, notice by a
licensee to a state agency shall be deemed effective once it is
received by the agency and deemed to be complete. An application or
notice is not deemed complete until all pertinent documents,
information, and fees are submitted to the department.
   19990.402.  (a) Authorized Internet poker games may be offered
only by entities licensed pursuant to this chapter. An eligible
entity seeking to offer authorized Internet poker games shall apply
to the department for a determination of suitability. If the
department determines the applicant is suitable to receive a license,
the applicant shall then apply to the commission for an operator
license. The applicant shall pay an application processing fee
sufficient to cover the reasonable costs associated with the
determination of suitability and the issuance of the license.
   (b) Employees of the licensed operator shall undergo a suitability
review and obtain work permits pursuant to Article 6 (commencing
with Section 19990.601). Owners, officers, and directors of licensed
operators shall also undergo a suitability review and obtain employee
work permits pursuant to Article 6 (commencing with Section
19990.601). The commission may refuse to issue a license to an
applicant, or suspend or revoke a license of a licensed operator,
that fails to comply with this requirement.
   (c) In order to ensure that licensed operators are not mere
facades for unlicensed, unqualified, or undisclosed interests, an
applicant for an operator license pursuant to this chapter shall
provide documentation to the commission establishing that, if the
license is granted, the license applicant will be able, through its
own net position or through credit extended directly to the
applicant, and with full recourse to it, by a federal or state
chartered financial institution not involved with the core functions
of the authorized poker Web site, that is entirely secured by an
equivalent amount of its own net position, to pay the license deposit
required by subdivision (a) of Section 19990.519. In addition, a
licensed operator shall submit regular financial reports to the
department establishing that the operator meets financial viability
requirements, as determined by the commission. The commission may
terminate a license if the operator fails to submit the required
reports or meet the financial viability requirements.
   (d) An applicant for an operator license pursuant to this chapter
that is a tribe shall include with its license application a limited
waiver of the applicant's sovereign immunity. This limited waiver
shall apply exclusively to the state, and no other party, solely for
the limited purpose of enforcing this chapter and any regulations
adopted pursuant to this chapter, and with regard to any claim,
sanction, or penalty arising therefrom against the licensed operator
by the state, and for no other purpose.
   (e) The commission shall issue an operator license to an applicant
determined by the commission to qualify as an eligible entity within
150 days of receiving an application, if the applicant has already
been subjected to a determination of suitability by the department
and has been approved by the department to apply to the commission
for licensure. All applicants shall undergo a determination of
suitability prior to applying for an eligibility determination by the
commission.
   (f) The state may issue operator licenses only to eligible
entities identified within this chapter. Any of the eligible entities
may jointly apply for an operator license, either as a consortium or
by forming an entity comprised entirely of eligible entities. Each
eligible entity may have an interest in only a single operator
license.
   (g) An operator license denoting full licensure shall be issued
for a term of four years. Subject to the power of the commission to
revoke, suspend, condition, or limit any license, as provided in this
chapter, a license shall be automatically renewed every four years
thereafter upon application. Failure of a licensed operator to file
an application for renewal may be deemed a surrender of the license.
   (h) Each initial operator license issued pursuant to this section
shall take effect on the same date. That date shall be one year after
the effective date of the regulations described in Section
19990.401, unless the commission determines that good cause exists
for those licenses to take effect in unison on a subsequent date.
Each initial operator license shall be a temporary license, and shall
be issued for a term of no longer than two years. The issuance of an
initial operator license does not guarantee full licensure.
   (i) A licensed operator may cease its operations after providing
the department with a 90-day advance notice of its intent and a
statement explaining its reasons for doing so, which may include the
fact that continuing to operate the authorized poker Web site is
commercially infeasible. In response to that notice, the state may
file an action in the Superior Court of the County of Sacramento as
it deems necessary to protect any state interests, including, but not
limited to, the interests of registered players.
   19990.403.  (a) A licensee's employees in direct contact with
registered players shall be physically present in the state.
   (b) All primary servers, facilities, bank accounts, and accounting
records of the licensee related to authorized Internet poker shall
be located in the state, except for redundant servers and except as
may be permitted by the commission for a service provider, if the
service provider ensures access to and jurisdiction over the relevant
servers, facilities, bank accounts, and accounting records.
   (c) Notwithstanding subdivisions (a) and (b), a licensee may
request, and the department may approve, the licensee's use of
personnel, servers, facilities, bank accounts, and accounting records
not physically present in the state when necessary to protect
registered players and state interests, for the purposes of
diagnosing and addressing technological problems, investigating fraud
and collusion, and developing and supervising software and
configuration changes.
   (d) In addition to any other confidentiality protections afforded
to license applicants, the state and its agencies shall treat the
proprietary information of a license applicant as confidential to
protect the license applicant and to protect the security of any
prospective authorized poker Web site. This chapter does not prohibit
the exchange of confidential information among state agencies
considering a license application. The confidentiality provisions of
this chapter exempt proprietary information supplied by a license
applicant to a state agency from public disclosure consistent with
subdivision (b) of Section 6253 of the Government Code.
   (e) A license applicant shall submit to the department, together
with its application, an application processing fee as specified in
subdivision (a) of Section 19990.402. All moneys collected by the
state pursuant to this subdivision shall be deposited into the
Internet Poker Fund.
   19990.404.  (a) An entity seeking to act as a service provider
shall apply to the department for a determination of suitability. If
the department determines the applicant is suitable to receive a
license, the applicant shall then apply to the commission for a
service provider license, and obtain a service provider license,
before providing goods or services to a licensed operator in
connection with the operation of an authorized poker Web site.
   (b) The department shall review the suitability of an applicant
for a service provider license. The applicant for a service provider
license shall pay an application processing fee sufficient to cover
the reasonable costs associated with the determination of suitability
and the issuance of the license.
   (c) The department may establish a process to conduct a
preliminary determination of suitability based on a partial
investigation. A partial investigation is intended to screen out
applicants that do not meet the suitability requirements of this
chapter. A partial investigation shall include fingerprint-based
state and federal criminal history checks and clearances, and
inquiries into various public databases regarding credit history and
any civil litigation. A partial investigation shall also include a
review of the service provider's financial status, which shall
include the submission of a report prepared by a forensic accounting,
audit, or investigative firm approved by the department, in a format
developed by the department, and at the service provider's expense.
The report shall include the financial information necessary for the
department to make a preliminary determination of suitability. The
department may specify additional requirements regarding the contents
of the report and any other financial information or documentation
required to be submitted. A full investigation shall be conducted of
only those service providers that pass the partial investigation and
that will undergo a full investigation pursuant to subdivision (d).
Those service providers that are awarded a preliminary determination
of suitability based on a partial investigation are not guaranteed
full licensure. Those service providers that do not pass the partial
investigation may appeal the decision to the commission.
   (d) Before the commission issues a service provider license to an
applicant, the department shall conduct the full investigation
required by this section of all of the following persons:
   (1) All officers of the license applicant.
   (2) The owner or owners of either of the following:
   (A) The license applicant.
   (B) Any corporate affiliate of the license applicant.
   (3) Any persons otherwise providing goods to, or performing
services for, the license applicant related to core functions.
   (4) Any person deemed by the department to have significant
influence over the license applicant or its service providers or
their respective operations.
   (5) In the case of a tribe or a wholly owned tribal entity that is
a service provider, the investigation shall be limited to the
business officers of the tribal entity that will serve as the service
provider.
   (e) A full investigation shall include a review and evaluation of
the service provider's qualifications and experience to provide the
services anticipated, which shall include the required submission of
a report prepared on each service provider by an outside firm
contracted and supervised by the department, in a format developed by
the department, and at the service provider's expense. The report
shall include information necessary for the department to make a
determination of suitability, as specified in regulations adopted
pursuant to this chapter, consisting of, but not limited to, personal
history, prior activities and associations, credit history, civil
litigation, past and present financial affairs and standing, and
business activities, including whether the applicant or an affiliate
of the applicant has a financial interest in any business or
organization that is or was engaged in any form of gaming or
transactions related to gaming prohibited by the law of the federal
or state jurisdiction in which those activities took place. The
department may specify additional requirements regarding the contents
of the report and other information or documentation required to be
submitted.
   (f) An institutional investor holding less than 10 percent of the
equity securities of a service provider's holding or intermediary
companies shall be granted a waiver of a determination of suitability
or other requirement if all of the following apply:
   (1) The securities are those of a corporation, whether publicly
traded or privately held.
   (2) Holdings of those securities were purchased for investment
purposes only.
   (3) The institutional investor annually files a certified
statement with the department to the effect that it has no intention
of influencing or affecting the affairs of the issuer, the licensee,
or service provider, as applicable, or its holding or intermediary
companies.
   (4) Notwithstanding paragraph (3), the institutional investor may
vote on matters submitted to the vote of the outstanding security
holders after the investor has been issued a license.
   (5) The certification described in paragraph (3) shall do all of
the following:
   (A) Include a statement that the institutional investor
beneficially owns the equity securities of the corporation for
investment purposes only, and in the ordinary course of business as
an institutional investor, and not for the purposes of causing,
directly or indirectly, the election of members of the board of
directors, or effecting a change in the corporate charter, bylaws,
management, policies, or operations of the corporation of any of its
affiliates.
   (B) Indicate any changes to the structure or operations of the
institutional investor that could affect its classification as an
institutional investor, as that term is listed in paragraph (8).
   (C) State that the institutional investor and corporation shall
maintain gaming compliance policies and procedures to implement and
ensure compliance with this chapter and regulations adopted pursuant
to this chapter.
   (6) An institutional investor granted a waiver under this
subdivision that subsequently decides to influence or affect the
affairs of the issuer shall provide not less than 30 days' notice of
that intent and shall file with the department a request for
determination of suitability before taking an action that may
influence or affect the affairs of the issuer. An institutional
investor shall not vote prior to being issued a license. If an
institutional investor changes its investment intent, or the
department finds reasonable cause to believe that the institutional
investor may be found unsuitable, the institutional investor shall
take no action other than divestiture with respect to its security
holdings until it has complied with any requirements established by
the department, which may include the execution of a trust agreement.
The institutional investor and its relevant holding, related, or
subsidiary companies shall immediately notify the department and, if
a tribal license is involved, the tribal gaming regulatory authority,
of any information about, or actions of, an institutional investor
holding its equity securities when that information or action may
impact upon the eligibility of the institutional investor for a
waiver pursuant to paragraph (2).

(7) If at any time the department finds that an institutional
investor holding a security of a licensee under this chapter has
failed to comply with the terms of this chapter, or if at any time
the department finds that, by reason of the extent or nature of its
holdings, whether of debt or equity securities, an institutional
investor is in a position to exercise such a substantial impact upon
the controlling interests of a licensee that investigation and
determination of suitability of the institutional investor are
necessary to protect the public interest, the department may take any
necessary action otherwise authorized by this chapter to protect the
public interest.
   (8) For purposes of this subdivision, an "institutional investor"
includes all of the following:
   (A) A retirement fund administered by a public agency for the
exclusive benefit of federal, state, or local public employees.
   (B) An investment company registered under the federal Investment
Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.).
   (C) A collective investment trust organized by banks under Part 9
of the Rules of the Office of the Comptroller of the Currency (12
C.F.R. Sec. 9.1 et seq.).
   (D) A closed-end investment trust.
   (E) A chartered or licensed life insurance company or property and
casualty insurance company.
   (F) A federally or state-regulated bank, savings and loan, or
other federally or state-regulated lending institution.
   (G) An investment adviser registered under the federal Investment
Advisers Act of 1940 (15 U.S.C. Sec. 80b-1 et seq.).
   19990.405.  (a) The department shall issue a finding that a
license applicant is suitable to obtain a license only if, based on
all of the information and documents submitted, the department is
satisfied that each of the persons subject to a determination of
suitability pursuant to this article is both of the following:
   (1) A person of good character, honesty, and integrity, or, if an
entity, in good standing in its jurisdiction of organization and in
all other jurisdictions in which it is qualified, or should be
qualified, to do business.
   (2) A person whose prior activities, criminal record, if any,
reputation, habits, and associations do not pose a threat to the
public interest of the state, or to the effective regulation and
control of authorized Internet poker games, or create or enhance the
dangers of unsuitable, unfair, or illegal practices, methods, and
activities in the conduct of authorized Internet poker games or in
the carrying on of the business and financial arrangements incidental
thereto.
   (b) The department shall issue a finding that a license applicant
is not suitable to obtain a license if it finds that a person subject
to a determination of suitability pursuant to this article is
described by any of the following:
   (1) The person failed to clearly establish eligibility and
qualifications in accordance with this chapter.
   (2) The person failed to timely provide information,
documentation, and assurances required by this chapter or requested
by the department, or, with respect to a licensed applicant, failed
to reveal any fact material to qualification, or supplied information
that is untrue or misleading as to a material fact pertaining to the
suitability criteria.
   (3) The person has been convicted of a felony, including a
conviction by a federal court or a court in another state or foreign
jurisdiction for a crime that would constitute a felony if committed
in California, except that a conviction of a felony involving the
hunting or fishing rights of a tribal member while on his or her
reservation shall not be included among the class of disqualifying
felonies.
   (4) The person has been convicted of a misdemeanor in a
jurisdiction 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. However, 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 department or affect the applicant's burden.
   (5) The person has associated with criminal profiteering activity
or organized crime, as defined in Section 186.2 of the Penal Code.
   (6) The person has contemptuously defied a legislative
investigative body, or other official investigative body of a state
or of the United States or a foreign jurisdiction, when that body is
engaged in the investigation of crimes relating to poker, official
corruption related to poker activities, or criminal profiteering
activity or organized crime, as defined in Section 186.2 of the Penal
Code.
   (7) The person is less than 21 years of age.
   (8) (A) The person has been convicted in a court of competent
jurisdiction of a felony consisting of either having accepted a bet
over the Internet in violation of United States or California law, or
having aided or abetted that unlawful activity.
   (B) A licensee shall not enter into a contract or agreement with a
person or entity described in subparagraph (A).
   (c) License applications shall be treated as follows:
   (1) The commission shall reject the license application of an
applicant found to be ineligible for licensure.
   (2) If denial of the application, or approval of the license with
restrictions or conditions on the license, is recommended, the
department shall prepare and file with the commission written reasons
upon which the recommendation is based. Prior to filing its
recommendation with the commission, the department shall meet with
the applicant, or the applicant's duly authorized representative, and
inform the applicant generally of the basis for a proposed
recommendation that the application be denied, restricted, or
conditioned.
   (3) This section does not require the department to divulge to the
applicant confidential information received from a law enforcement
agency or information received from a person with assurances that the
information would be maintained confidential, nor to divulge any
information that might reveal the identity of an informant or
jeopardize the safety of a person.
   (4) Denial of an application shall be without prejudice to a new
and different application filed in accordance with any regulations
adopted by the commission with respect to the submission of
applications.
   (5) An applicant may withdraw its application for a license at any
time prior to final action on the application by the commission by
filing a written request with the commission to withdraw the
application, absent knowledge of a specific reason to suspect that
the person or entity may be found unsuitable.
   19990.406.  (a) This chapter does not restrict the authority of a
tribe that is a licensed operator or that owns a tribal enterprise
that is a licensed operator to conduct suitability reviews of its
service providers.
   (b) This chapter also does not prohibit a tribal gaming regulatory
authority from providing the results of its suitability
investigations or determinations to the commission or department for
its consideration in issuance of licenses pursuant to this chapter.

      Article 5.  Requirements for the Operation of an Authorized
Poker Web Site


   19990.501.  (a) A licensed operator shall ensure that registered
players are eligible to play authorized Internet poker games and
implement appropriate data security standards to prevent access by a
person whose age and location have not been verified in accordance
with this chapter.
   (b) A registered player shall be physically located within the
State of California at the time of gambling.
   (c) A registered player shall be at least 21 years of age.
   (d) Each licensed operator shall do all of the following, whether
directly or through the actions of its licensed service providers:
   (1) Prior to registering a person as a registered player or
permitting a person to play an authorized Internet poker game, the
licensed operator shall verify that the person is 21 years of age or
older.
   (2) The licensed operator shall attempt to match the name,
address, and date of birth provided by the person to information
contained in records in a database of individuals who have been
verified to be 21 years of age or older by reference to an
appropriate database of government records.
   (3) The licensed operator shall verify that the name and physical
billing address on the check or credit card offered for payment by
the person seeking to be a registered player matches the name and
address listed in the database.
   (4) If the licensed operator is unable to verify that the person
is 21 years of age or older pursuant to paragraph (1), the licensed
operator shall require the person to submit age-verification
documents consisting of an attestation signed by the person that he
or she is 21 years of age or older and a copy of a valid form of
government identification. For the purposes of this section, a valid
form of government identification includes a driver's license, state
identification card, passport, official naturalization or immigration
document, such as an alien registration receipt card or an immigrant
visa, or United States military identification. The licensed
operator shall verify that the physical billing address on the check
or credit card provided by the person matches the address listed on
his or her government identification.
   (5) The licensed operator shall not permit registered players to
make payments or withdrawals by money order or cash, except that a
licensed operator may permit registered players to make payments or
withdrawals by money order or cash in person at the land-based gaming
facility operated by the licensed operator. The licensed operator
shall submit information to each credit card company through which it
makes credit card sales, in an appropriate form and format so that
the words "Internet poker" or equivalent description is printed on
the purchaser's credit card statement with that credit card company,
when a payment to a licensed operator is made by credit card and the
transaction is categorized as required by law.
   (e) A licensed operator is not in violation of this section if the
operator complies with the requirements of paragraphs (1) and (2) of
subdivision (d), and a person under 21 years of age participates in
an authorized Internet poker game provided by the licensed operator.
   (f) The department may assess a civil penalty against a person who
violates this section, whether a licensed operator, owner, service
provider, or player, according to the following schedule:
   (1) Not less than one thousand dollars ($1,000), and not more than
two thousand dollars ($2,000), for the first violation.
   (2) Not less than two thousand five hundred dollars ($2,500), and
not more than three thousand five hundred dollars ($3,500), for the
second violation.
   (3) Not less than four thousand dollars ($4,000), and not more
than five thousand dollars ($5,000), for the third violation.
   (4) Not less than five thousand five hundred dollars ($5,500), and
not more than six thousand five hundred dollars ($6,500), for the
fourth violation.
   (5) Ten thousand dollars ($10,000) for a fifth or subsequent
violation.
   (g) The commission shall, by regulation, provide a process for a
licensee to exclude from play any person who has filled out an online
self-exclusion form.
   (1) The commission shall develop an online self-exclusion form
within six months of the effective date of this chapter.
   (2) The commission shall deliver the form to each licensed
operator.
   (3) A licensed operator shall prominently display a link to the
department's Responsible Gambling Internet Web page and the online
self-exclusion form on the authorized poker Web site that is
displayed when either of the following occurs:
   (A) A person registers as a registered player.
   (B) Each time a registered player accesses the authorized poker
Web site prior to playing.
   (4) A licensed operator shall retain the online self-exclusion
form to identify persons who want to be excluded from play. A
licensed operator shall exclude those persons from play.
   (5) A licensed operator that has made commercially reasonable
efforts to comply with this subdivision shall not be held liable in
any way if a person who has filled out an online self-exclusion form
plays despite that person's request to be excluded.
   19990.502.  A licensed operator shall offer only authorized
Internet poker games and process bets in accordance with the
specified game and betting rules established by the licensed operator
and approved by the commission pursuant to Section 19990.503.
   19990.503.  (a) In order to propose a game for play, a licensed
operator shall provide the department with both of the following via
electronic means or via mail:
   (1) Game rules and betting rules it proposes to offer to
registered players.
   (2) Documentation from an independent gaming test laboratory that
is licensed or registered in any United States jurisdiction to test,
approve, and certify the game's software.
   (b) A licensed operator shall not offer a game for play until the
department has approved the game rules and betting rules.
   19990.504.  (a) A licensed operator shall ensure that games are
fair.
   (b) A licensed operator shall display a link on its authorized
poker Web site that includes the following information for each game
offered:
   (1) The name of the game.
   (2) Any restrictions on the play of the game.
   (3) The rules of the game.
   (4) All instructions on how to play.
   (5) The unit and total bets permitted.
   (6) Per hand charges assessed to registered players.
   (7) The registered player's current account balance, which shall
be updated in real time.
   (8) Any other information that a licensed operator or the
department determines is necessary for the registered player to have
in real time to compete fairly in the game.
   (c) A licensed operator shall display a link on its authorized
poker Web site that includes the following information for each
tournament offered:
   (1) Tournament rules.
   (2) Tournament charge.
   (3) Games offered during the tournament.
   (4) Prize structure and number of registered players that will be
paid.
   (5) Buy-in amount, re-buy amount, and add-on amount.
   (d) Data used to create game results shall be unpredictable so
that it is infeasible to predict the next occurrence in a game.
   (e) A licensed operator shall deploy controls and technology to
minimize fraud or cheating through collusion, including external
exchange of information between different players, or any other
means.
   (1) If a licensed operator becomes aware that fraud or cheating is
taking place or has taken place, it shall take steps to stop those
activities immediately and inform the department of all relevant
facts.
   (2) The department shall not impose a fine against a licensed
operator to prevent fraud or cheating if the licensed operator can
demonstrate that it acted responsibly to prevent those activities as
soon as the licensed operator became aware of them.
   (f) In a per hand game, if the gaming server or software does not
allow a game to be completed, the game shall be void and all funds
relating to the incomplete game shall be returned to the registered
player's account.
   (g) In a tournament, if the gaming server or software does not
allow the tournament to be completed, all prize money shall be
distributed among players in accordance with the procedure approved
by the department and published by the licensed operator prior to the
commencement of the tournament.
   (h) A licensed operator shall display or allow the results from
any authorized Internet poker game, including the redemption of
winnings from any game, to be displayed or represented only by
showing the card faces of the winning hand and the dollar amount won.

   (i) A licensed operator shall not do any of the following:
   (1) Display or allow the outcome from any authorized Internet
poker game, including the redemption of winnings from any game, to be
displayed or represented in a manner that mimics a slot machine or
any other casino style games, including, but not limited to,
blackjack, roulette, or craps.
   (2) Use casino game graphics, themes, or titles, including, but
not limited to, depictions of slot machine-style symbols, banked or
banking card games, craps, roulette, keno, lotto, or bingo.
   (3) Allow the use of robotic play at any time by itself, a service
provider, or a player.
   19990.505.  (a) A licensed operator shall register players and
establish registered player accounts prior to play.
   (b) A person shall not participate in any game provided by a
licensed operator unless the person is a registered player and holds
a registered player account.
   (c) A registered player account may be established in person, or
by United States mail, telephone, or by any electronic means.
   (d) To register and establish a registered player account to play
poker with real money, a person shall provide all of the following
registration information:
   (1) First name and surname.
   (2) Principal residence address.
   (3) Telephone number.
   (4) Social security number.
   (5) Identification or certification to prove that person is at
least 21 years of age.
   (6) Valid email address.
   (e) A licensed operator shall provide registered players with the
means to update the registration information provided to the licensed
operator, and shall require that registered players keep
registration information current.
   (f) This section does not prevent a licensed operator from
entering into a marketing agreement with a third party, who has been
determined to be suitable and licensed as a service provider, to
recruit people to become registered players if the registration
process described in this section is under the sole control of the
licensed operator.
   19990.506.  (a) A licensed operator shall provide a means for
registered players to put funds into a registered player account and
transfer funds out of that account.
   (b) A registered player shall identify the source of funds to be
used to put money into the registered player account established once
the registration process is complete.
   (c) At the time of establishing a registered player account, a
registered player shall designate the bank account into which funds
from the registered player's authorized poker Web site account are to
be transferred.
   (d) A registered player shall not establish more than one account
on the same authorized poker Web site.
   (e) While playing an authorized Internet poker game, the game
system shall not permit a registered player to increase the amount of
money that player has available at a game table while a hand is in
play. Any increase to the funds available to a player during a hand
shall not take effect until the following hand.
   (f) A licensed operator shall maintain records on the balance of
each registered player's account.
   (g) A licensed operator shall not permit a registered player to
place a bet unless the registered player's account has sufficient
funds to cover the amount of the bet.
   (h) A licensed operator shall not provide credit to a registered
player's account or act as agent for a credit provider to facilitate
the provision of funds.
   (i) Interest shall not be paid by a licensed operator with respect
to a registered player's account.
   (j) A licensed operator shall segregate funds it holds in all
registered player accounts from all of its other assets.
   (k) A licensed operator shall not commingle funds in the
segregated account containing funds paid by registered players with
any other funds held by the licensed operator, including, but not
limited to, operating funds of the licensed operator. Both the
accounts of the licensed operator and its segregated registered
player accounts shall be held in financial institutions located in
the state.
   (l) Funds held in a registered player's account shall be used only
for the following purposes:
   (1) To pay per hand or tournament charges owed by a registered
player to the licensed operator for play of authorized Internet poker
games.
   (2) To transfer funds from one registered player's account to the
account of another registered player to reconcile the result of a
loss in the play of an authorized Internet poker game.
   (3) To transfer funds from a registered player's account to a
temporary account to be held by a licensed operator pending the
outcome of an authorized Internet poker game.
   (4) To remit tax proceeds due and owing from a registered player
to the Franchise Tax Board.
   (5) To transfer funds from a registered player's account with the
licensed operator to an account specified by that registered player
upon that registered player's request.
   19990.507.  Prior to completing the registration process, a
licensed operator shall explain in a conspicuous fashion to the
person who is registering the privacy policies of the authorized
poker Web site, and the person shall assent to the following
policies:
   (a) Personally identifiable information shall not be shared with
any nongovernmental third parties, except as provided in Section
19990.512.
   (b) All personally identifiable information about registered
players shall be shared with state agencies, including, but not
limited to, the department, the commission, the Franchise Tax Board,
and the Department of Child Support Services as necessary to assist
them in fulfilling their obligations.
   (c) Personally identifiable information may be shared with
governmental agencies only as set forth in subdivision (b) or subject
to court order as provided in Section 19990.512.
   19990.508.  A licensed operator may require that a registered
player, or a person registering as a player, agree to a Terms of Use
Registered Player's Agreement.
   19990.509.  A licensed operator may suspend or revoke the account
of a registered player for any of the following reasons:
   (a) A person or registered player provided false information to
the licensed operator, including, but not limited to, in the
registration process.
   (b) The registered player has not updated registration information
to keep it current.
   (c) The registered player has violated the authorized poker Web
site's Terms of Use Registered Player's Agreement.
   (d) The person has already been registered.
   (e) The licensed operator suspects that the registered player has
participated in an illegal or unauthorized activity on the authorized
poker Web site.
   (f) The licensed operator is directed by a state agency to suspend
or revoke the registered player's account.
   19990.510.  Upon registration, and each time a registered player
logs into an authorized poker Web site, the licensed operator shall
permit a registered player to adjust his or her play settings to:
   (a) Set a limit on the deposits that can be made per day.
   (b) Set a limit on the aggregate losses in a registered player's
account within a specified period of time.
   (c) Set a limit on the amount of time that a registered player can
play.
   19990.511.  A licensed operator shall offer customer support that
shall be available to registered players 24 hours per day, 365 days
per year.
   19990.512.  (a) A licensed operator shall protect the privacy of
registered players and their personally identifiable information.
   (b) A licensed operator shall comply with all applicable state and
federal privacy and data protection laws.
   (c) At the time a registered player registers with a licensed
operator, and at least one time per year thereafter, a licensed
operator shall provide notice in the form of a separate, written
statement, delivered via the United States Postal Service or
electronic mail, to the registered player that clearly and
conspicuously informs the registered player of all of the following:
   (1) The nature of personally identifiable information collected or
to be collected with respect to the registered player and the nature
of the use of that information.
   (2) The nature, frequency, and purpose of any disclosure that may
be made of personally identifiable information, including an
identification of the types of persons to whom the disclosure may be
made.
   (3) The period during which personally identifiable information
will be maintained by the licensed operator.
   (4) The times and place at which the registered player may have
access to personally identifiable information in accordance with
subdivision (h).
   (5) The limitations provided by this section with respect to the
collection and disclosure of personally identifiable information by a
licensed operator.
   (d) A licensed operator shall not collect personally identifiable
information concerning any registered player without the prior
written or electronic consent of the registered player.
   (e) A licensed operator may collect personally identifiable
information in order to do both of the following:
   (1) Obtain information necessary to operate the authorized poker
Web site and offer authorized Internet poker games to registered
players pursuant to this chapter.
   (2) Detect unauthorized play, activities contrary to a licensed
operator's Terms of Use Registered Player's Agreement, or activities
contrary to state or federal law.
   (f) Except as provided in subdivision (g), a licensed operator
shall not disclose personally identifiable information concerning any
registered player without the prior written or electronic consent of
the registered player and shall take actions necessary to prevent
unauthorized access to that information by a person other than the
registered player or licensed operator.
   (g) A licensed operator may disclose personally identifiable
information if the disclosure is any of the following:
   (1) Necessary to render, or conduct a legitimate business activity
related to, the provision of authorized Internet poker games to the
registered player by the licensed operator.
   (2) Subject to subdivision (j), made pursuant to a court order
authorizing the disclosure, if the registered player is notified of
the order by the person to whom the order is directed.
   (3) A disclosure of the names and addresses of registered players
to any tournament third party, if both of the following apply:
   (A) The licensed operator has provided the registered player the
opportunity to prohibit or limit the disclosure.
   (B) The disclosure does not reveal, directly or indirectly, the
nature of any transaction made by the registered player over the
authorized poker Web site.
                                             (4) A disclosure to the
commission and the department to fulfill its obligations under this
chapter or to a state agency as authorized in this chapter.
   (5) A disclosure to persons found suitable under this chapter if
the registered player is notified and consents to the information
being shared.
   (h) A licensed operator shall provide a registered player with
access to all personally identifiable information regarding that
registered player that is collected and maintained by the licensed
operator. The licensed operator shall make the information available
to the registered player at reasonable times and at a place
designated by the licensed operator. A licensed operator shall
provide a registered player a reasonable opportunity to correct any
error in the information.
   (i) A licensed operator shall destroy personally identifiable
information if both of the following apply:
   (1) The information is no longer reasonably necessary for the
purpose for which it was collected.
   (2) There are no pending requests or orders for access to the
information under subdivision (j).
   (j) A governmental or nongovernmental third party may obtain
personally identifiable information concerning a registered player
pursuant to a court order only if, in the court proceeding relevant
to the court order, both of the following apply:
   (1) The third party offers clear and convincing evidence that the
subject of the information is reasonably suspected of engaging in
criminal activity or otherwise relevant to a pending civil action and
that the information sought would be material evidence in the case.
   (2) The registered player about whom the information is requested
is afforded the opportunity to appear and contest the third party's
claim.
   19990.513.  A licensed operator shall establish a book of accounts
and regularly audit all of its financial records and reports, which
shall, at a minimum, include all of the following:
   (a) Monthly auditable and aggregate financial statements of
gambling transactions.
   (b) Monthly calculation of all amounts payable to the state.
   (c) The identity of registered players.
   (d) The balance on each registered player's account at the start
of a session of play, the amount won or lost by each registered
player during a game, and the balance on the registered player's
account.
   (e) The bets placed on each game, time stamped by the games
server.
   (f) The result of each game, time stamped by the games server.
   (g) The amount, if any, as determined by the registered player,
withheld from winnings for federal or state income tax purposes.
   19990.514.  (a) A licensed operator shall make all financial
records established and maintained pursuant to Section 19990.513,
including, but not limited to, all books, records, documents,
financial information, and financial reports, available on an
electronic basis, as required by the commission, the department, or
other state agencies so that those state agencies can fulfill their
responsibilities under this chapter. A state agency may request
specific printed hard copies of records for good cause.
   (b) The licensed operator's data shall be retained in a manner by
which it may be accessed online by a state agency with
responsibilities pursuant to this chapter. The commission shall
identify which state agencies require online access.
   (c) Notwithstanding subdivision (b), data covered by subdivisions
(d), (e), and (f) of Section 19990.513, shall be accessible to the
state agencies online for 180 days, and, thereafter, archived and
retained for two years.
   19990.515.  A licensed operator shall do all of the following:
   (a) Implement technical systems that materially aid the commission
in the protection of registered players. Software shall meet, at a
minimum, international industry standards as verified by an
independent gaming test laboratory that is licensed or registered in
any United States jurisdiction to test, approve, and certify the
software.
   (b) Define and document its methodology for developing software
and applications and describe the manner in which software protects
registered players from fraud and other risks in the play of
authorized Internet poker games and in the management of registered
player accounts.
   (c) Meet minimum game server connectivity requirements to ensure
that registered players are protected from losses due to connectivity
problems.
   (d) Ensure that all transactions involving registered players'
funds are recoverable by the system in the event of a failure or
malfunction.
   (e) Ensure that all information required for reviewing a game
interrupted due to loss of connectivity is recoverable by the
licensed operator.
   (f) Document and implement preventative and detective controls
addressing money laundering and fraud risks.
   19990.516.  (a) A licensed operator may charge registered players
to play in authorized Internet poker games.
   (b) (1) A licensed operator may charge a per hand charge if the
per hand charge is designated and conspicuously posted on the
licensed operator's authorized poker Web site.
   (2) A licensed operator may vary the per hand charges to
registered players based on betting limits or other factors.
   (c) (1) A licensed operator may charge a tournament charge if the
tournament charge is designated and conspicuously posted on the
licensed operator's authorized poker Web site.
   (2) A licensed operator may vary tournament charges based on
tournament prizes or other factors.
   (d) A licensed operator shall provide notice to the commission of
the charges to registered players prior to initiating play.
   19990.517.  A licensed operator may do any of the following:
   (a) Enter into an agreement with any third party to sponsor or
underwrite prizes for a tournament, subject to the approval of the
commission and, if applicable, the tribal gaming regulatory
authority.
   (b) Enter into an agreement to sell advertisement space on any
Internet Web site it controls.
   (c) Enter into an agreement with a third-party service provider
for marketing, or any other purpose consistent with this chapter,
including, but not limited to, displaying the name of a marketing
partner on a screen viewed by a registered player.
   (d) Enable a chat function between registered players if it has in
place effective controls against collusion.
   (e) Post Internet Web links on the Internet Web sites it controls
to permit registered players to access remote Internet Web sites.
   (f) Offer authorized Internet poker games on up to two authorized
poker Web sites pursuant to its license.
   (g) Enter into contractual agreements with one or more licensed
operators for the purpose of ensuring adequate player liquidity.
   19990.518.  There are three categories of application fees,
regulatory fees, and license deposits, as follows:
   (a) Application Processing Fee. In order to cover the costs of
suitability investigations and other costs of processing an
application for a license or work permit, the applicant shall deposit
the applicable application processing fee as provided in subdivision
(a) of Section 19990.402, subdivision (e) of Section 19990.403,
subdivision (b) of Section 19990.404, or Section 19990.605. Any
balance of the application processing fee that remains after
completion of the determination of suitability shall be refunded to
the applicant. If additional moneys are needed to complete the
determination of suitability of the license applicant, the applicant
shall pay the funds necessary to complete the determination of
suitability.
   (b) One-time License Deposit. Prior to offering any games for play
or accepting any bets on its authorized poker Web site, a licensed
operator shall pay the one-time license deposit as provided in
subdivision (a) of Section 19990.519. This deposit shall be an
advance against the duty on gross gaming revenues specified in
subdivision (b) of Section 19990.519.
   (c) Ongoing Regulatory Fees. Following issuance of a license and
beginning of operations thereunder, the licensed operator shall pay
the ongoing regulatory fees set forth in subdivision (c) of Section
19990.519.
   19990.519.  (a) In support of the application for a license
pursuant to this chapter, prior to offering games or accepting bets
on its authorized poker Web site, the licensed operator shall remit
to the Treasurer a one-time license deposit in the amount of ten
million dollars ($10,000,000), to be deposited into the General Fund,
and credited against charges imposed pursuant to subdivision (b) on
the licensed operator's gross gaming revenues. Upon depletion of the
license deposit, the department shall notify the licensed operator to
commence quarterly payments to the state in accordance with
subdivision (b).
   (b) In consideration of the substantial value of each license, a
licensed operator shall remit to the Treasurer on a quarterly basis
for deposit in the General Fund an amount equal to 8.5 percent of its
gross gaming revenues.
   (1) Each quarterly payment shall be due on the 10th day of the
month following the end of each quarter.
   (2) A licensed operator shall make all electronic and written
financial records available to the Treasurer, the commission, and the
department on an electronic basis.
   (c) Each licensed operator shall pay a regulatory fee, to be
deposited in the Internet Poker Fund, in an amount to be determined
by the commission, for the reasonable costs of license oversight,
consumer protection, state regulation, problem gambling programs, and
other purposes related to this chapter, determined on a pro rata
basis depending on the number of licensed operators in the state.
   19990.520.  (a) The licensed operator shall facilitate the
collection of personal income taxes from registered players by the
Franchise Tax Board and shall be responsible for providing current
and accurate documentation on a timely basis to all state agencies,
as provided in this chapter.
   (b) The state and its agencies shall treat the proprietary
information provided by a licensed operator as confidential to
protect the licensed operator and to protect the security of the
authorized poker Web site.
   (c) The confidentiality provisions of this chapter exempt
proprietary information supplied by a licensee to a state agency from
public disclosure consistent with subdivision (b) of Section 6253 of
the Government Code.
   19990.521.  (a) A licensee shall act expeditiously to cure any
violation of this chapter, or any regulation adopted pursuant to this
chapter, in the offer or administration of authorized Internet poker
games that interferes with its obligations to the state or
registered players under this chapter.
   (b) If a licensee becomes aware of any violation of this chapter,
it shall notify the department immediately and work with the
department to develop a plan to rectify the violation.
   (c) If the department becomes aware of any violation of this
chapter, or if it becomes aware of any activities that might lead to
a violation, the department shall provide notice of that violation to
the licensee and a reasonable opportunity for the licensee to cure
the violation. If the violation is not timely cured, the department
shall investigate the violation further and may take enforcement
actions. If the commission becomes aware of any violation of this
chapter, the commission shall notify the department of the violation
immediately so that the department may take appropriate action
pursuant to this chapter.
   (d) All state agencies with responsibilities under this chapter
shall report any actual or suspected violation of this chapter, or
any regulation adopted pursuant to this chapter, or activities that
may lead to a violation, to the department immediately so that the
department can assess whether it needs to commence an investigation
or enforcement action.
   (e) A licensee shall be afforded a reasonable time period to cure
any reported violation. During this time period, a licensee shall not
be subject to prosecution for the criminal penalty described in
Section 19990.303, or liable for the civil penalties described in
this article.
   (f) The department shall have subpoena power in an investigation
of any violation of this chapter, or any regulation adopted pursuant
to this chapter.
   (g) The commission may revoke or suspend any license or work
permit under this chapter upon reaching a finding that the licensee
or employee is in violation of any provision of this chapter, or any
regulation adopted pursuant to this chapter. However, a tribal
licensee shall not have its license suspended or revoked, or be fined
or otherwise penalized, for complying with any applicable federal
law or regulation when operating an authorized poker Web site on
Indian lands. To the extent that any state requirement is more
stringent than any applicable federal requirement, the tribal
licensee shall comply with the more stringent state requirement,
unless the federal requirement preempts state law.
   (h) A licensee may appeal any final decision of the department
pursuant to this section to the superior court. The superior court
shall hear any appeal de novo.
   (i) The department shall protect the rights and assets of
registered players on an authorized poker Web site if the licensed
operator's license pursuant to this chapter is revoked or the
licensed operator becomes bankrupt.
   19990.522.  (a) (1) A license issued pursuant to this chapter is
not transferable.
   (2) (A) If a licensed operator seeks to change the ownership of
its land-based gaming facility, both of the following apply:
   (A) The license held by the licensed operator under this chapter
shall be rendered void upon the date of any change of ownership in
the land-based gaming facility.
   (B) Prior to a change in ownership, the acquiring person shall
apply to become a licensed operator, at which point the commission
shall determine whether the person is legally qualified to be a
licensed operator under this chapter.
   (b) The department shall investigate to ensure that any person
acquiring an interest in a licensee is suitable, and otherwise
financially, technically, and legally qualified to be a licensee
pursuant to this chapter. If an acquiring person is found to be
unsuitable to be a licensee, or otherwise not financially,
technically, or legally qualified to be a licensee, the licensed
operator or the acquiring person may challenge that determination.
   19990.523.  All facilities, software, including downloadable
programs, and any other property, both tangible and intangible, used
by the licensed operator in offering authorized Internet poker games
for play on an authorized poker Web site shall be the property of the
licensed operator or its licensed service providers, and shall be
subject to the review of the department and the approval of the
commission.
   19990.524.  If any dispute arises between the state and a
licensee, either the commission or a licensee may file an action in
the superior court of any county in which the commission has an
office for an interpretation of the rights and responsibilities of
the state and the licensee pursuant to this chapter.
   19990.525.  (a) (1) The department or commission may contract with
other public or private entities, including, but not limited to,
state, tribal, and international regulatory agencies, for the
provision of services related to a responsibility imposed on the
department or commission by this chapter if all of the following are
satisfied:
   (A) The contract will assist with the provision of efficient,
effective, and robust regulation of intrastate Internet poker.
   (B) The contract provides access to expertise that has been tested
and proven in the poker industry.
   (C) The department or commission retains administrative control
and responsibility for ensuring compliance with this chapter.
   (2) In order to expedite the implementation of intrastate Internet
poker, a contract entered into pursuant to paragraph (1) is not
subject to the Public Contracts Code, or otherwise applicable
contracting provisions of the Government Code.
   (b) A state agency with a duty pursuant to this chapter may enter
into agreements to share information with other regulatory and law
enforcement agencies to assist in performing the state agency's duty.


      Article 6.  Employee Work Permits


   19990.601.  (a) Except as provided in Section 19990.602, a
licensee shall submit an application and applicable fees to the
department and apply to the commission for an employee work permit on
behalf of each employee.
   (b) Prior to initiating operations and thereafter, a licensee
shall ensure that every employee has been issued an employee work
permit by the commission prior to that person having access to the
licensee's facilities. The permit shall be renewed every two years.
   (c) The commission shall issue an employee work permit only if,
based on all of the information and documents submitted, the
commission is satisfied that the applicant is, at a minimum, all of
the following:
   (1) A person of good character, honesty, and integrity.
   (2) A person whose prior activities, criminal record, if any,
reputation, habits, and associations do not pose a threat to the
integrity of a gaming operation or public interest of this state, or
to the effective regulation and control of controlled gambling, as
defined in Section 19805, 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
incidental business and financial arrangements.
   (3) A person who is in all other respects qualified to hold an
employee work permit as provided in this chapter.
   (d) The commission shall not issue an employee work permit unless
the applicant meets the qualification standards adopted by the
commission by regulation. A tribal gaming regulatory authority may
impose additional qualifications with respect to activities on Indian
lands.
   19990.602.  (a) A tribe that is a licensed operator, or that owns
a tribal enterprise that is a licensed operator, may elect to
participate in the tribal gaming regulatory authority process
prescribed by this section for the issuance of employee work permits.
If the tribe does not elect to participate in the tribal gaming
regulatory authority process as provided in this section, then the
process specified in this section regarding submission and action by
the tribal gaming regulatory authority on the application for
employee work permit shall not apply, and the other provisions of
this chapter shall instead govern.
   (b) The joint state and tribal processes required pursuant to this
section are intended to promote and involve joint cooperation among
the tribal gaming regulatory authority, the commission, and the
department.
   (c) The tribal employee work permit process shall be as follows:
   (1) All applications for employee work permits first shall be
filed with the tribal gaming regulatory authority, which shall
promptly file a copy of the application with the commission, together
with information regarding the filing date and the payment of fees
and deposits. The application shall be accompanied by the fees
required in Section 19990.605, except those fees shall be deposited
into a tribal account created for the purpose of holding the
deposited funds and using them for the costs of the suitability
review and the issuance of the license.
   (2) In reviewing an application for a work permit, the tribal
gaming regulatory authority shall determine whether issuance of the
employee work permit would meet the suitability standards set forth
in this chapter. The tribal gaming regulatory authority shall not
issue a permit unless, based on all information and documents
submitted, the tribal gaming regulatory authority determines that the
applicant meets all of the criteria set forth in this chapter for
the issuance of the employee work permit.
   (3) The tribal gaming regulatory authority shall conduct, or cause
to be conducted, all necessary determinations of suitability
reasonably required to determine that the applicant is qualified for
an employee work permit under the standards set forth in this chapter
for the issuance of the employee work permit.
   (4) In lieu of completing its own determination of suitability,
and to the extent that doing so does not conflict with or violate
this chapter, the tribal gaming regulatory authority may contract
with the department for the conduct of determinations of suitability,
may rely on a state certification of nonobjection previously issued
under a gaming compact involving another tribe, or may rely on a
state gaming license previously issued to the applicant, to fulfill
some or all of the tribal gaming regulatory authority's determination
of suitability obligation. An applicant for a tribal employee work
permit shall provide releases to make background information
regarding the applicant available to the tribal gaming regulatory
authority, the department, and the commission.
   (5) Upon completion of the necessary determination of suitability,
the tribal gaming regulatory authority may issue a finding that the
person or entity is eligible for an employee work permit on a
conditional or unconditional basis. This section does not create a
property or other right of an applicant in an opportunity to be
permitted, or in a permit itself, both of which shall be considered
privileges granted to the applicant in the sole discretion of the
tribal gaming regulatory authority.
   (6) Upon receipt of a completed license application and a
determination by the tribal gaming regulatory authority that the
applicant is eligible and suitable for the employee work permit, the
tribal gaming regulatory authority shall transmit to the commission a
notice of intent to issue a permit to the applicant. The tribal
gaming regulatory authority shall not issue an employee work permit
until the process required by paragraph (7) is complete.
   (7) After receipt of the tribal gaming regulatory authority's
notice pursuant to paragraph (6), and upon completion of the
necessary determination of suitability, the commission shall issue a
notice to the tribal gaming regulatory authority stating its finding
that the applicant is suitable or is not suitable for the requested
permit. The commission may charge an additional application
processing fee pursuant to Section 19990.605 to cover the reasonable
costs of conducting its verification of suitability.
   (A) If the commission notices a finding that the applicant is
suitable, the tribal gaming regulatory agency shall issue an employee
work permit to the applicant. The permit shall be effective pursuant
to this chapter as though issued by the commission.
   (B) If the commission notices a finding that the applicant is not
suitable, the tribal gaming regulatory authority shall not issue the
requested permit. Prior to denying an application for a determination
of suitability, the commission shall notify the tribal gaming
regulatory authority and afford the tribe an opportunity to be heard.
If the commission denies an application for a determination of
suitability, the commission shall provide the applicant with written
notice of all appeal rights available under state law.
   (C) Upon receipt of notice that the commission or department,
collectively or individually, or the tribal gaming regulatory
authority has determined that a person would be unsuitable in a
similar application filed in connection with a nontribal operation,
the tribal gaming regulatory authority shall not issue the requested
permit or, if that notice is received after issuance of the permit,
promptly revoke that permit. However, the tribal gaming regulatory
authority may, in its discretion, reissue a permit to the person
following entry of a final judgment reversing the determination of
the commission and department in a proceeding in state court
conducted pursuant to Section 1085 of the Code of Civil Procedure.
   (8) A tribal permit application submitted pursuant to this section
may be denied, and any permit issued may be revoked, if the tribal
gaming regulatory authority determines that the application is
incomplete or deficient, or if the applicant is determined to be
unsuitable or otherwise unqualified for a permit. Pending
consideration of revocation, the tribal gaming regulatory authority
may suspend a permit. All rights to notice and hearing shall be
governed by the rules of the tribal gaming regulatory authority,
which shall meet minimum requirements to be developed among the
tribes, the commission, and the department, and as to which the
applicant shall be notified in writing, along with notice of an
intent to suspend or revoke the permit.
   (9) The tribal gaming regulatory authority may summarily suspend
an employee work permit issued pursuant to this section if the tribal
gaming regulatory authority determines that the continued permitting
of the person or entity could constitute a threat to the public
health or safety or may violate this chapter.
   (d) The commission and tribal gaming regulatory authorities
conducting suitability reviews pursuant to this section shall
cooperate in sharing as much background information as possible in
order to maximize investigative efficiency and thoroughness, to
minimize investigative costs, and to expedite the permitting process.

   (e) The commission and the tribes that have elected to conduct
suitability reviews pursuant to this section shall cooperate in
developing standard forms for tribal gaming employee work permit
applicants, on a statewide basis, that reduce or eliminate
duplicative or excessive paperwork, and that take into account the
requirements of this chapter and the expense of compliance with those
requirements.
   19990.603.  An applicant for an employee work permit is
disqualified if the applicant is described by any of the following:
   (a) The applicant failed to clearly establish eligibility and
qualifications in accordance with this chapter.
   (b) The applicant failed to timely provide information,
documentation, and assurances required by this chapter or requested
by any state official, or, with respect to a licensed applicant,
failed to reveal any fact material to qualification, or supplied
information that is untrue or misleading as to a material fact
pertaining to the suitability criteria.
   (c) The applicant has been convicted of a felony, including a
conviction by a federal court or a court in another state or foreign
jurisdiction for a crime that would constitute a felony if committed
in California, except that a conviction of a felony involving the
hunting or fishing rights of a tribal member while on his or her
reservation shall not
   be included among the class of disqualifying felonies.
   (d) The applicant has been convicted of a misdemeanor in a
jurisdiction 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. However, 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 department or affect the applicant's burden.
   (e) The applicant has associated with criminal profiteering
activity or organized crime, as defined in Section 186.2 of the Penal
Code.
   (f) The applicant has contemptuously defied a legislative
investigative body, or other official investigative body of a state
or of the United States or a foreign jurisdiction, when that body is
engaged in the investigation of crimes relating to poker, official
corruption related to poker activities, or criminal profiteering
activity or organized crime, as defined in Section 186.2 of the Penal
Code.
   (g) The applicant is less than 21 years of age.
   (h) The applicant has been convicted in a court of competent
jurisdiction of a felony consisting of either having accepted a bet
over the Internet in violation of United States or California law, or
having aided or abetted that unlawful activity.
   19990.604.  (a) If a licensed operator has any owners, officers,
or directors who are not employees, it shall ensure that each of
those persons obtains an employee work permit before having any role
or decisionmaking authority regarding the licensed operator's gaming
operations.
   (b) If the licensed operator is a tribal enterprise controlled by
an independent board of directors, the officers, directors, and
employees of that tribal enterprise are subject to suitability review
pursuant to this section. This section does not require that an
officer, director, employee, or member of the tribe that owns the
tribal enterprise be subject to suitability review if that individual
is not also an officer, director, employee, or member of the tribal
enterprise or a person who controls the core functions of the tribal
enterprise.
   19990.605.  The commission, the department, and, if applicable,
the tribal gaming regulatory authority, shall establish application
processing fees to be paid by a licensee for the reasonable cost of
determinations of suitability for, and issuance of, employee work
permit applications. The commission shall establish processes for the
revocation or suspension of an employee work permit, and to withdraw
an application for an employee work permit.
   19990.606.  A licensed operator or service provider shall not
enter into, without prior approval of the commission, a contract or
agreement with either of the following:
   (a) A person who is denied a gambling license or employee work
permit pursuant to Chapter 5 (commencing with Section 19800), or
whose gambling license or employee work permit is suspended or
revoked.
   (b) Any business enterprise under the control of a person
described in subdivision (a), after the date of receipt of notice of
the action.
   19990.607.  (a) (1) A licensed operator or service provider shall
not employ, without prior approval of the commission, a person in any
capacity for which he or she is required to have an employee work
permit, if the person has been denied a gambling license or an
employee work permit pursuant to Chapter 5 (commencing with Section
19800), or if his or her gambling license or employee work permit has
been suspended or revoked after the date of receipt of notice of the
action by the commission or tribal gaming regulatory authority.
   (2) A licensed operator or service provider shall not enter into a
contract or agreement with a person whose application for a gambling
license or an employee work permit has been withdrawn with
prejudice, or with a business enterprise under the control of that
person, for the period of time during which the person is prohibited
from filing a new application for a gambling license or an employee
work permit.
   (b) (1) If an employee who is required to hold an employee work
permit pursuant to this chapter is denied an employee work permit, or
has his or her employee work permit revoked, the employee shall be
terminated immediately in all capacities. Upon notifying the licensee
of the denial or revocation, the employee shall have no further
involvement in the gambling operation.
   (2) If an employee who is required to hold an employee work permit
pursuant to this chapter has his or her employee work permit
suspended, the employee shall be suspended in all capacities. Upon
notifying the licensee of the suspension, the employee shall not be
permitted to have any involvement in the gambling operation during
the period of suspension.
   (3) A licensed operator or service provider shall not designate
another employee to replace the employee whose employment was
terminated or suspended, unless the other employee has an existing
work permit.
   (c) A licensed operator or service provider shall not pay to a
person whose employment has been terminated or suspended as described
in subdivision (b) any remuneration for any service performed in any
capacity in which the person is required to hold an employee work
permit, except for amounts due for services rendered before the date
of receipt of the notice.
   (d) Except as provided in subdivision (b), a contract or agreement
for the provision of services or property to a licensed operator or
service provider or for the conduct of any activity pertaining to the
operation of an authorized poker Web site, that is to be performed
by a person required by this chapter, or by regulation, to hold an
employee work permit, shall be terminated upon a suspension or
revocation of the person's employee work permit.
   (e) If a contract or agreement for the provision of services or
property to a licensed operator or service provider, or for the
conduct of any activity at an authorized poker Web site, is to be
performed by a person required by this chapter or by regulations
adopted pursuant to this chapter, to hold an employee work permit,
the contract or agreement shall be deemed to include a provision for
its termination without liability on the part of the licensed
operator or service provider upon a suspension or revocation of the
person's employee work permit. In any action brought by the
commission to terminate a contract or agreement pursuant to
subdivision (d) or this subdivision, it is not a defense that the
contract or agreement does not expressly include the provision
described in this subdivision, and the lack of express inclusion of
the provision in the contract or agreement is not a basis for
enforcement of the contract or agreement by a party to the contract
or agreement.

      Article 7.  Protection of Registered Players


   19990.701.  A licensed operator shall use its best efforts to
protect registered players. Subject to the approval of the
department, and consistent with uniform standards established by the
department by regulation, each licensed operator shall establish
administrative procedures to resolve registered player complaints.
   19990.702.  (a) If a registered player has a complaint against a
licensed operator, the exclusive remedy shall be to register the
complaint with the department.
   (b) The department shall establish regulations with respect to
registered player complaints.
   (c) Under the regulations, the department shall do all of the
following:
   (1) Investigate registered player complaints to determine if a
licensed operator has failed to meet its obligations to a registered
player.
   (2) Attempt to resolve complaints by registered players if a
licensed operator fails to meet an obligation to a registered player.

   (3) Initiate enforcement actions to require specific performance
of any obligation that the department has determined a licensed
operator has failed to fulfill with respect to a registered player.
   (d) A licensed operator may appeal any action by the department
pursuant to this article to the superior court, which shall review
the appeal de novo.

      Article 8.  Financial Provisions for State Regulation and
Unlawful Gambling Enforcement


   19990.801.  The Treasurer shall transfer all amounts received
pursuant to subdivision (a) of Section 19990.402, subdivision (e) of
Section 19990.403, subdivision (b) of Section 19990.404, subdivision
(c) of Section 19990.519, and Section 19990.605 to the Controller for
deposit in the Internet Poker Fund, which is created in the State
Treasury, to be administered by the department. Notwithstanding
Section 13340 of the Government Code, all moneys in the fund are
continuously appropriated to the department and the commission,
without regard to fiscal years, in the amounts necessary for the
department and the commission to perform their duties under this
chapter.
   19990.802.  (a) The Unlawful Gambling Enforcement Fund is hereby
established within the General Fund for purposes of ensuring adequate
resources for law enforcement charged with enforcing the
prohibitions and protections of this chapter. The Unlawful Gambling
Enforcement Fund shall be funded by depositing:
   (1) ____ percent of the revenue from the civil penalties recovered
by law enforcement authorities pursuant to Section 19990.803 into
the fund prior to the distribution required under subdivision (c) of
Section 19990.803.
   (2) All amounts or property recovered pursuant to Section
19990.804.
   (3) ____ percent of the duties paid by licensed operators pursuant
to subdivision (b) of Section 19990.519.
   (4) The revenue from the civil penalties recovered pursuant to
subdivision (f) of Section 19990.501.
   (b) Up to ____ million dollars ($____) in the fund may be expended
annually by the Attorney General, upon appropriation by the
Legislature, for the purposes of this chapter.
   19990.803.  (a) Except as provided in subdivision (f) of Section
19990.501, a person who engages or conspires to engage in activities
prohibited by this chapter, or activities prohibited by Section 321,
322, 323, 324, 326, 330, 330a, 330b, 330c, 330d, 330.1, 330.4, or 331
of the Penal Code, is liable for a civil penalty not to exceed ____
dollars ($____) for each violation, in addition to any other penalty
or remedy that may be imposed by law, which shall be assessed and
recovered in a civil action brought in the name of the people of the
State of California by the Attorney General, a district attorney, a
county counsel authorized by agreement with the district attorney in
an action involving the violation of a county ordinance, the city
attorney of a city having a population in excess of 750,000 persons,
the city attorney of a city and county, or, with the consent of the
district attorney, the city prosecutor in a city with a full-time
city prosecutor, in a court of competent jurisdiction.
   (b) In determining the amount of the civil penalty described in
subdivision (a), the court shall consider any relevant circumstance
presented by a party to the case, including, but not limited to, any
of the following:
   (1) The nature and seriousness of the misconduct.
   (2) The number of violations.
   (3) The persistence of the misconduct.
   (4) The length of time over which the misconduct occurred.
   (5) The willfulness of the defendant's misconduct.
   (6) The defendant's assets, liabilities, and net worth.
   (c) (1) Subject to paragraph (1) of subdivision (a) of Section
19990.802, civil penalties recovered by law enforcement authorities
pursuant to this section shall be allocated as follows:
   (A) If the action is brought by the Attorney General, one-half of
the penalty collected shall be paid to the treasurer of the county in
which the judgment was entered for deposit into that county's
general fund, and one-half to the Treasurer for deposit into the
Unlawful Gambling Enforcement Fund.
   (B) If the action is brought by a district attorney or county
counsel, the penalty collected shall be paid to the treasurer of the
county in which the judgment was entered for deposit into that county'
s general fund.
   (C) If the action is brought by a city attorney or city
prosecutor, one-half of the penalty collected shall be paid to the
treasurer of the city in which the judgment was entered for deposit
into that city's general fund, and one-half to the treasurer of the
county in which judgment was entered for deposit into that county's
general fund. If the action is brought by the city attorney of a city
and county, the entire amount of the penalty collected shall be paid
to the treasurer of the city and county in which the judgment was
entered.
   (2) The revenue from all civil penalties allocated to the Unlawful
Gambling Enforcement Fund pursuant to subparagraph (A) of paragraph
(1), upon appropriation by the Legislature, shall be used by the
Attorney General exclusively to support the investigation and
enforcement of violations of California's gambling laws, including
the implementation of judgments obtained from prosecution and
investigation of those violations and violations of Sections 321,
322, 323, 324, 326, 330, 330a, 330b, 330c, 330d, 330.1, 330.4, and
331 of the Penal Code, and other activities that are in furtherance
of this chapter.
   (3) The revenue from all civil penalties allocated to the
treasurer of the county, city, or city and county in which the
judgment was entered pursuant to subparagraphs (A), (B), and (C) of
paragraph (1) shall be for the exclusive use of the district
attorney, the county counsel, the city attorney, or the city
prosecutor, whichever is applicable, for the enforcement of this
chapter and existing laws prohibiting illegal gambling activity.
   19990.804.  (a) Any money, other representative of value, or real
or personal property used in, or derived from, the play of a game
provided on the Internet that is not authorized by the state pursuant
to this chapter is subject to seizure by the department or by a
peace officer.
   (b) Upon a finding by a court that the money, other representative
of value, or real or personal property was used in, or derived from,
the play of a game provided on the Internet that is not authorized
by the state pursuant to this chapter, that money or property shall
be forfeited to the Unlawful Gambling Enforcement Fund established in
Section 19990.802.

      Article 9.  Preemption of Local Regulation


   19990.901.  A city, county, or city and county shall not regulate,
tax, or enter into a contract with respect to any matter related to
this chapter. This section does not prohibit or limit the
investigation and prosecution of any violation of this chapter.

      Article 10.  Reports to the Legislature


   19990.1001.  Notwithstanding Section 10231.5 of the Government
Code, within one year of the operative date of this chapter, and
annually thereafter, the commission, in consultation with the
department, the Treasurer, and the Franchise Tax Board, shall issue a
report to the Legislature describing the state's efforts to meet the
policy goals articulated in this chapter. The report shall be
submitted in compliance with Section 9795 of the Government Code.
   19990.1002.  (a) At least four years after the issue date of any
license pursuant to this chapter, but no later than five years after
that date, the Bureau of State Audits shall issue a report to the
Legislature detailing the implementation of this chapter.
   (b) A report submitted pursuant to subdivision (a) shall be
submitted in compliance with Section 9795 of the Government Code.
   (c) This section shall remain in effect only until January 1,
2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.

      Article 11.  Partial Severability


   19990.1101.  (a) Except as provided in subdivision (b), the
provisions of this chapter are severable. If any provision of this
chapter, other than those listed in subdivision (b), or its
application, is held invalid, that invalidity shall not affect other
provisions or applications that can be given effect without the
invalid provision or application.
   (b) (1) The following provisions of this chapter are not
severable:
   (A) Establishing poker as the only permissible Internet gambling
game.
   (B) Prohibiting persons or entities who have been convicted in a
court of competent jurisdiction of a felony consisting of either
having accepted a bet over the Internet in violation of United States
or California law, or having aided or abetted that unlawful
activity, from being licensed under this chapter.
   (C) Limiting the entities that are eligible for an operator
license.
   (2) If any of the provisions identified in paragraph (1), or
application of those provisions to any person or circumstances, is
held invalid, the entire chapter shall be invalid.
  SEC. 2.  The Legislature finds and declares that Chapter 5.2
(commencing with Section 19990.101) of Division 8 of the Business and
Professions Code, as added by Section 1 of this act, imposes a
limitation on the public's right of access to the meetings of public
bodies or the writings of public officials and agencies within the
meaning of Section 3 of Article I of the California Constitution.
Pursuant to that constitutional provision, the Legislature makes the
following findings to demonstrate the interest protected by this
limitation and the need for protecting that interest:
   The limitations on the people's right of access set forth in this
chapter are necessary to protect the privacy and integrity of
information submitted by registered players as well as the
proprietary information of the license applicants and licensees.
  SEC. 3.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
  SEC. 4.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to protect the interests of Californians who play online
gambling games and to ensure that people play fair games, that the
state realizes the revenues, and that suitable persons operate
authorized poker Web sites, it is necessary that this act take effect
immediately.