Coachella Municipal Code Ch. 5.20 Card Clubs, Card Schools and Gaming Enterprises

The voters of the city enact this chapter to accomplish the following purposes:

A. The residents of the city are in need of employment;

B. The residents of the city are in need of more police and fire services;

C. The residents of the city are in need of recreational facilities and activities for their families;

D. The residents of the city desire the right to compete for legal gaming business with other cities of the Coachella Valley and with the Indian Tribes of the Coachella Valley;

E. The city is in need of additional revenue because the state legislature has required it to implement various duties and programs without providing the funding; and

F. The residents of the city desire to establish minimum requirements, not inconsistent with state law, for the licensing, regulations and taxation of legal gaming in the city which the city council may not repeal.

(Prior code § 4-70)

The revenue derived by the city from any card club, card school or gaming enterprise licensed under this chapter may be expended by the city for any lawful purpose as determined by the city council provided that a substantial portion of those revenues shall be expended as follows:

A. Twenty-five (25) percent of the total gaming revenue received by the city shall be expended for recreational equipment, facilities and services for the residents of the city as determined by the city council; and

B. Twenty-five (25) percent of the total gaming revenue received by the city shall be expended for police and fire equipment, facilities and services for the residents of the city as determined by the city council.

(Prior code § 4-71)

For the purposes of this chapter, the words and phrases hereinafter set forth shall have the following meanings ascribed to them unless the context clearly requires to the contrary:

"Applicant" means any person who files an application seeking to be approved by the city council to manage, operate or own an interest in a card club, card school or gaming enterprise.

"Card club or gaming enterprise" means any business establishment in the city where legal gambling as defined in this section is conducted and licensed under the provisions of this chapter and shall also include any related business activities incidental to legal gambling such as food and beverage service, entertainment and valet services.

"Card school" means a place conducted, maintained or operated for the purpose of giving instructions in the playing of any game not prohibited hereunder. No gambling or other forms of betting, except simulated betting solely for the purposes of instruction or training, may be conducted at a card school.

"Card table" means a table at which legal games are conducted and does not mean a table which is used solely for instructional purpose or for other nongaming purposes such as eating, drinking or socializing. A card table shall also include tables used for instructional purposes in which a fee or any other monetary value is required for and/or derived from the use thereof.

"Chief financial officer" means the officer appointed by the city council to access, audit and investigate the financial affairs and records of any licensee and report same to the city council. The council may appoint any person or entity which it deems qualified for this purpose.

"Chief of police" means the police chief of the city police department.

"City" or "Coachella" means the city.

"City attorney" means the city attorney of the city.

"City council" or "council" means the city council of the city.

"City manager" means the city manager of the city.

"Commence" means and includes commence, begin, initiate, start, open and/or establish.

"Conduct" means and includes conduct, transact, maintain, prosecute, practice, manage, operate and/or carry on.

"Conviction" means a plea or verdict of guilty or a conviction following a plea of nolo contendere.

"Employee" means every person, either as agent, employee, or otherwise of the manager, operator or owner of any gaming enterprise.

"Game" or "games" means any game played for gambling purposes, including any form of poker or bingo, which is not prohibited under state law or any ordinance of the city, whether or not such game involves the use of cards.

"Gaming commission" means that certain five-member body which regulates and oversees the operation of gaming enterprises licensed under this chapter. The city council may, by resolution, choose to act as the gaming commission. In lieu thereof, the city council may appoint the members of the gaming commission and provide, by resolution, the terms and duties thereof.

"Gross revenues" means any and all revenues derived from the playing of legal games including seat use or rental fees, membership fees and house take on wagering, but not derived from nongaming activities such as food and beverage sales, the portion of tournament entry fees allocated for prizes, parking fees or valet fees.

"Legal gambling" or "legal gaming" means any game played for currency, check, credit or any other thing of value which is not prohibited and made unlawful by Chapter 9 (commencing with Section 319) or Chapter 10 (commencing with Section 330) of Title 9 of Part 1 of the Penal Code or any ordinance of the city.

"License" means a license issued pursuant to this chapter allowing for the operation of a card club, card school or gaming enterprise either by a resolution or license agreement of the city council.

"Licensee" means any person or entity, including an owner or point holder of such an entity, who has been licensed or has a license agreement under this chapter by the city council.

"License agreement" means an agreement between a licensee and the city pursuant to this chapter permitting the operation of a card club, card school or gaming enterprise with the terms and conditions recommended by the city attorney and adopted by the city council.

"Owner" or "pointholder" means any person owning any interest, whether legal, equitable or otherwise, in a card club, card school or gaming enterprise in the city.

"Purport to commence" and "purport to conduct" means and includes any action which indicates, suggests, holds out, or represents that any person is, would be, or appears to be conducting or in a position to conduct any business referred to in this chapter within the city in a manner including:

1. By means of sign, advertisement, or advertising matter, whether in, upon or about any premises or otherwise;

2. By the appearance or arrangement of any premises; or

3. By acts or statements of any persons, or by the agents, servants, or employees of any person.

"Quarter" means calendar quarter.

"Unit" means any device used for gaming or gambling.

"Work permit" means the permit issued by the chief of police permitting the employment of any person to be employed in a gaming enterprise.

(Prior code § 4-72)

It is unlawful for any person to commence or conduct, or purport to commence or conduct, within the city any activity, business, enterprise or undertaking in any location or place for playing any game, or operating a card school, where a fee, commission, or compensation is, directly or indirectly, accepted, charged or received from any person playing, or participating in the playing, of any game unless and until such person applies for and is granting a license or license agreement under this chapter by the city council. A license must be applied for and granted for each card club, gaming enterprise or card school.

(Prior code § 4-73)

Any person desiring to manage, operate or own a card club, card school or gaming enterprise in the city shall first submit a written application to conduct such an enterprise as required by this chapter. The applicant shall attest under penalty of perjury that all information provided in the written application is true and correct. In addition, the applicant shall acknowledge that, in order for the written application to be considered complete, the city may require the applicant to provide all information relevant to the management, operation or ownership of such an enterprise including, but not limited to, the following:

A. The date of the application;

B. The true name of each applicant including all names used by each applicant;

C. The legal status of the applicant if other than a natural person such as an association, corporation, joint venture, limited liability company or partnership;

D. If the applicant is an individual, the residence and business address of such applicant for the prior ten (10) years;

E. If the applicant is other than a natural person, the name, residence, and business address of each of the point holders of the association, corporation, joint venture, limited liability company or partnership;

F. The proposed location of the business for which the license is sought;

G. The proposed hours of operations, games to be played and wagering limits;

H. The number of tables or units to be utilized;

I. A description of other business proposed to be conducted;

J. A description of the building proposed for such use;

K. A statement that such building will conform to all the laws of the city, county and state for the proposed occupancies;

L. An acknowledgment signed by the applicant that the application shall be considered by the council only after the applicant has been investigated by the city manager, the chief of police department, any other law enforcement agency having jurisdiction and the director of community development, in consultation with the city attorney, and their reports prepared and submitted to the city council for consideration;

M. An acknowledgment signed by the applicant that any gaming enterprise licensed under this chapter shall require the applicant to manage and operate the gaming enterprise in conformity with the laws and regulations of the city and state applicable thereto, and that any violation of any such laws or regulations shall subject any such license or license agreement to immediate suspension or revocation;

N. A statement that the applicant has read the provisions of this chapter, understands them and agrees to abide by them;

O. A full and complete financial statement of the applicant, whether the applicant is an individual, association, corporation, limited liability company or partnership, and a full and complete financial statement of each point holder regarding the amount and sources of the funding for the construction and operation of the gaming enterprise; provided that the financial statement shall be a confidential qualified document and shall not be open to public inspection but shall be available only to those city officials having jurisdiction over the licensing, regulation and taxation of the gaming enterprise under this chapter including the members of the city council, city manager, city attorney, chief of police and chief financial officer. All financial information required by this subsection and any regulation adopted by the city council shall be reported on a standardized financial statement form filed with the chief financial officer. Such financial statement shall be renewed annually and report any and all changes of financial information; and

P. The council shall not consider any application for any license contemplating less than a minimum of twenty-five (25) tables or units for the playing of legal games.

(Prior code § 4-74)

The issuance of a license or license agreement by the city council is subject to its approval of the investigations of the applicant and application hereunder. By filing an application for a license or license agreement, the applicant acknowledges and agrees that the applicant, its owners, directors, officers, partners, managers and key employees shall be subject to investigation as follows:

A. The city manager, chief of police and director of community, in consultation with the city attorney, shall diligently make a full and complete investigation of the applicant, its owners, directors, officers, partners, managers and key employees.

B. A full and complete investigation shall be made of the building and location where the applicant proposes to conduct such business or activity.

C. Concurrently with the filing of the application, the applicant, its owners, directors, officers, partners, managers and key employees shall be fingerprinted by the Coachella police department upon the payment of the usual fees therefore. It shall be the responsibility and duty of the chief of police to establish the necessary procedures to administer this requirement.

D. All applicants, including owners, directors, officers, partners, managers and key employees shall execute an "authorization to obtain records" form to be provided by the Coachella police department which will include a hold harmless and waiver of responsibility clause as to any city employee or officer conducting the investigation and reporting thereon.

E. The applicant shall agree to provide the Coachella police department with a copy of an adequate security plan which must receive the approval of the police chief. The Coachella police department or any law enforcement agency having jurisdiction shall make such investigations with reasonable promptness and shall report to the city council with reference thereto in due time, and shall make investigations with reasonable promptness as to all matters within its jurisdiction concerning the public health, welfare and safety as may be concerned with such license.

(Prior code § 4-75)

The city council may, in its sole discretion, conditionally grant or deny any application to conduct, manage, operate or own any card club, card school or gaming enterprise in the city, or any application to transfer any license or license agreement previously issued. However, the city council shall not be required to issue any license or license agreement, or permit any transfer of any license or license agreement. In making such a determination, the city council may consider any relevant factor including, without limitation, any of the following factors:

A. If the proposed business or activity to be operated is in violation of any city or state law or regulation;

B. If any game for which a license is applied for, or is being played at the site, is unlawful;

C. If a license is not available where the city council has, by resolution, limited the number of licenses or license agreements to be issued in the city;

D. If the applicant, its owners, directors, officers, partners, managers and key employees has been or is convicted of, or pleads nolo contendere, to any crime punishable as a felony or a crime of violence, any crime involving fraud, gambling, loan sharking, bookmaking, theft, bunco, moral turpitude, evasion of taxes, or any other offense indicating a lack of business integrity or business honesty, whether committed in California or elsewhere and whether denominated a felony or a misdemeanor notwithstanding the time since the conviction;

E. If the applicant fails to hold a valid registration from the attorney general of the state or any other state license, permit or registration which may be required by state law;

F. If the applicant, its owners, directors, officers, partners, managers and key employees having any financial or equitable interest in the "gaming enterprise" is identified by any law enforcement agency, legislative body or crime commission as a member of, or an associate of, organized criminal elements;

G. If the applicant, or any of the applicant's agents or employees, makes any false statement in the application or as to any other information requested or presented as part of the application process;

H. If the applicant fails to satisfy the city council regarding the source and sufficiency of the funds to be invested in the proposed gaming enterprise;

I. If the applicant has been found unsuitable to operate a gaming enterprise or hold any gaming license in another jurisdiction without regard to whether disciplinary action was taken or whether the facts were sufficient to justify the refusal to grant such a license;

J. If the applicant is a person whose ownership of, or presence in, a licensed gaming enterprise, is found by the city council, on the basis of the facts and evidence before it, to constitute a threat to the public health, safety, morals, good order and general welfare of the residents of the city;

K. If the granting of a license to the applicant would tend to reflect or discredit the city or the gaming industry in the city;

L. If the applicant does not have the financial capability or business experience or capability to conduct, manage or operate a gaming enterprise in a manner which would adequately protect the residents of the city, the city, the patrons of the gaming enterprise or the gaming industry;

M. If the source of any of the funds to be invested in the gaming enterprise cannot be verified as belonging to or lawfully acquired by the applicant or its owners, directors, officers, partners, managers and key employees;

N. If the applicant is presently under any criminal investigation, indictment or charge for any of the crimes described above;

O. If the applicant makes or causes to be made any statement in any application, document or statement provided to any city official in connection with the application for a license or license agreement, or a transfer of same, or any other related transaction or document which was false or misleading in any material respect at the time and under the circumstances it was made;

P. If the applicant lacks a satisfactory record of business competence, ethics or integrity in the area of gaming management;

Q. If there is a lack of evidence of adequate funds to pay potential current obligations and, in addition, to provide adequate working capital to finance the construction or operation of the proposed gaming enterprise;

R. If any person named in the application when summoned by the city council fails to appear and testify before it at such item and place as it may designate;

S. If the applicant fails to submit an adequate security plan; and

T. If the applicant fails to provide an adequate demonstration of ability to develop, operate and manage a gaming enterprise or related facility.

(Prior code § 4-76)

A. Applicants and licensees shall pay the following fees to the city:

1. An application fee to be determined by the city council but not less than ten thousand dollars ($10,000.00), as a nonrefundable payment for the costs of the investigations required by this chapter payable upon filing of the application.

2. A one-time issuance fee in a sum to be determined by the city council for each license payable within thirty (30) days from the approval date of a license or license agreement hereunder. Failure to pay such issuance fee within such thirty-day period shall render the license or license agreement void and invalid without any further action by the city.

3. A license fee based upon the total monthly gross revenue of the gaming enterprise in a percentage to be determined by the city council, but not less than two percent nor more than ten (10) percent of the total monthly gross revenue of the gaming enterprise, payable on the tenth day of each month following the commencement of operations of the licensed gaming enterprise.

4. A community fee to charitable, nonprofit organization(s) offering services to the residents of the city as approved by the city council which may be a fixed quarterly amount or an amount which shall be greater than one-tenth of one percent but not greater than one-half of one percent of the total monthly gross revenue of the gaming enterprise payable on the tenth day of each quarter following the commencement of operations of the licensed gaming enterprise. In the event that such fee is not paid by the licensee, the amount of such fee shall be due and payable to the city.

5. The city council may, however, limit the total amount of fees imposed during any fiscal year under this section.

B. The application fee required by this subsection shall be adjusted effective July 1, 1997, and annually thereafter on July 1st of each succeeding year, in a percentage amount equal to the change in the consumer price index during the preceding twelve (12) month period for the Metropolitan Los Angeles-Anaheim-Riverside Area as published by the United States Bureau of Labor Statistics.

C. A security deposit in a sum to be determined by the city council, but not less than fifty thousand dollars ($50,000.00), for each license payable within sixty (60) days from the approval date of a license or license agreement as stated in this chapter. Failure to make such security deposit within such sixty-day period shall render the licensee's license or license agreement void and invalid, and any such license or license agreement shall be null and void without any further action necessary by the city. Such security deposit shall be made to insure licensee's payment of the monthly and gross revenue fees due to the city. Such security deposit shall be refunded in the event that the license is deemed invalid provided the licensee has not conducted any business or generated any income from the gaming enterprise so licensed.

D. Applicant shall place the security deposit in an interest bearing escrow account for the benefit of the city at a financial institution selected by the chief financial officer. Prior to making such deposit, the mayor, city attorney, licensee and financial institution shall execute appropriate escrow instructions approved by the city attorney. All interest earned on such deposit shall be credited to such account. If a licensee becomes delinquent in the payment of fees due to the city pursuant to this chapter, the chief financial officer, after twenty-four (24) hours' written notice to the licensee, shall withdraw the amount due the city from such account and deposit same into the appropriate city account which shall become the property of the city. If the security deposit falls below the required amount, the licensee shall replenish it within five calendar days. Failure to maintain the required security deposit shall be grounds for suspension or revocation of the licensee's license or license agreement.

E. If the licensee has managed, operated or owned a gaming enterprise for twenty-four (24) consecutive months and the licensee has paid all fees to the city during such period, the city council may eliminate or reduce the licensee's obligation to maintain a security deposit. However, the city council shall require the licensee to reestablish a security deposit if the licensee subsequently becomes delinquent or defaults in the payment of any fee due the city.

(Prior code § 4-77)

Any license or license agreement for any gaming enterprise issued by the city council shall contain all the provisions required by this chapter and those conditions necessary to operate the gaming enterprise so licensed including the following provisions:

A. The name, address and identification information of the licensee;

B. The term of the license or license agreement;

C. The obligation to construct or acquire a facility in which to operate the gaming enterprise and to operate the gaming enterprise at such facility;

D. The number of tables or units which may be operated at the gaming enterprise facility;

E. The hours of operation of the gaming enterprise facility;

F. The games which may be played at the gaming enterprise facility;

G. The wagering limits on the games which may be played at the gaining enterprise facility;

H. The right, if any, to serve food and alcoholic beverages, or to provide entertainment and valet parking at the gaming enterprise facility;

I. The right, if any, to operate a card school at the gaming enterprise facility or at another facility;

J. The amount of the issuance fee, monthly license fee, gross revenue license fee, community fee and security deposit to be paid by the licensee;

K. The financial reporting obligations and procedures of the licensee;

L. The employment obligations of the licensee; and

M. The conditions imposed on the licensee.

(Prior code § 4-78)

The license or license agreement granted as stated in this chapter shall be conditioned upon licensee's compliance with the following requirements:

A. Licensee shall construct and operate any gaming enterprise or card school only in the entertainment zone located at Dillon Road near the I-10 Freeway.

B. Licensee shall comply with the city's zoning ordinances and all conditions imposed by the city's planning commission for the site of each gaming enterprise or card school.

C. Licensee shall obtain a city business license.

D. Licensee shall comply with all provisions of this chapter, amendments and all regulations adopted by the city council to implement this chapter or state law.

E. Licensee shall comply with this code applicable to the operation or location of each card club, card school or gaming enterprise.

F. Licensee shall pay all fees and deposit all sums required by this chapter.

G. Licensee, its owners, directors, officers, partners, managers and key employees shall submit to annual background investigations pursuant to a schedule and a fee structure established by the city council.

H. Any and all other conditions reasonably necessary to implement the purposes and provisions of this chapter as determined by the city council.

(Prior code § 4-79)

A. Any license or license agreement issued under the provisions of this chapter shall be and remain valid until its term expires, it is surrendered by the applicant, deemed null and void by operation of the provisions of this chapter, license or license agreement under which it was created, or suspended or revoked by the city council as provided in this section. Except as provided in the license or license agreement, in the event of expiration, surrender, suspension or revocation, no license deposit or fee, or any portion thereof, shall be refunded.

B. Any license or license agreement, and all rights of the licensee thereunder, shall expire and be revoked by operation of law if the licensee fails to commence operation of a card club, card school or gaming enterprise within one year of the date of issuance of the license or license agreement.

C. Licensees shall not transfer or assign any license or license agreement without the prior written consent of city council. All requests for transfer or assignment shall constitute a request for an original license and require a new application and investigation.

(Prior code § 4-80)

The licensee shall implement the following employment practices with respect to the hiring of its employees:

A. Design and implement a plan to recruit, train and hire residents of the city for employment at the gaming enterprise and card school.

B. Grant first hiring considerations to the residents of Coachella assuming similar qualifications.

C. Target the hiring of twenty-five (25) percent of the employees of the gaming enterprise from residents of the city.

D. Make good faith efforts to contract with companies, laborers and vendors based in the city to construct and supply the gaming enterprise and card school.

E. Provide a progress report on or before July 1st of each year to the city council describing its efforts to comply with its obligation to seek out and award jobs and contracts to persons or firms who reside in or are located in the city.

(Prior code § 4-81)

The city council and the chief financial officer shall have the right to review and approve the accounting procedures of each licensee before and after such accounting procedures are put into effect and such procedures shall be a condition of the issuance of any license or license agreement issued under this chapter. In addition, the city council and the chief financial officer shall require the implementation of procedures and security measures necessary to ascertain, count and report all revenues derived from gaming by each card club, card school or gaming enterprise. The city shall have the right to place city employees or officers in each card club, card school or gaming enterprise to observe and verify the counting of all revenues derived from gaming at each card club, card school or gaming enterprise before such revenues are counted and removed by the licensee.

(Prior code § 4-82)

The licensee shall file with the chief financial officer before the tenth day of each calendar month a reporting form approved by the city council, under penalty of perjury, showing the true and correct amount of gross revenues derived from all operations licensed or permitted pursuant to this chapter for the preceding calendar month. Such statement shall be accompanied by the payment of the correct amount of license fee due and owing in accordance with the provisions of this chapter. Such sums correctly reflecting the monthly fees payable for the preceding month shall be accepted by the chief financial officer subject to the right to access and audit the licensee's financial records and to the correctness of the figures contained in such statement and the amounts payable to the city pursuant to the provisions of this chapter. Such statement shall report all sums contributed to any charitable institutions or nonprofit organization. If the tenth day of the month falls on a holiday, the report will be due on the next business day. The city council, in the exercise of sound discretion, may grant an extension of time for any payment due under this chapter, for a period not to exceed thirty (30) days. The late payment shall bear interest payable to the city at the current Bank of America prime rate plus two percent.

(Prior code § 4-83)

All of licensee's financial books, records, and accounts of the gaming enterprise shall be audited at the end of the licensee's calendar year by a certified public accountant (CPA) selected by the chief financial officer. The audit shall examine the licensee's gross venues and financial records and procedures and any other financial information, procedure or record requested by the city council, chief financial officer or city attorney. The cost of this annual audit shall be paid by the licensee. Any information obtained pursuant to the provisions of this chapter or any statement filed by the licensee shall be deemed confidential in character and shall not be subject to public inspection except in connection with the enforcement of the provisions of this chapter. Any inaccuracy found in the revenues reported by licensee to the city shall be adjusted. If such audit discloses that the licensee's gross revenues were under reported, the licensee shall pay all additional amounts due forthwith together with interest thereon at the current Bank of America prime rate plus two percent. Any failure or refusal by the licensee to pay any amounts when due, or to submit any report as required within the time so designated, or to produce or permit inspection of any financial information, procedure or record of the licensee shall be and constitute full and sufficient grounds for the immediate suspension or revocation of the license or license agreement.

(Prior code § 4-84)

A. The licensee shall keep on file with the Coachella police department, and on the gaming enterprise facility as to each employee of the gaming enterprise, a comprehensive employee list containing the following current information:

1. Residence address for the past five years;

2. Current occupation or employment;

3. Employment during the past five years;

4. Physical characteristics, including age, date of birth, height, weight, and color of hair and eyes;

5. Driver's license and social security number;

6. A history of all convictions for any felony or misdemeanor offenses, other than the nonmoving traffic violations, and of violations of any municipal codes or ordinances involving gaming within the past ten (10) years; and

7. A current full face photo.

B. Each such employee at all times, while acting within the scope of his/her employment, shall carry upon his or her person a work permit authorizing employment in a card club, card school or gaming enterprise approved by the chief of police. In addition, each employee, with the exception of those specifically exempted by the Coachella chief of police or designees, shall wear in a prominently visible place upon his or her person an identification badge bearing the name and identification number of the employee. All employees must, upon demand of a Coachella police officer, identify themselves.

C. In addition, to the foregoing provisions, any person employed by the gaming enterprise, prior to commencing employment, shall submit to fingerprinting at a location designated by the chief of police. Any processing fee as set from time to time by the responsible party or entity, shall be paid by the gaming enterprise. The fingerprinting will result in a background investigation to be conducted by the Coachella police department.

(Prior code § 4-85)

A licensee may, and shall upon order of the chief of police, exclude or eject from the facility of a card club, card school or gaming enterprise any person who has been engaged in or been convicted of bookmaking, cheating, illegal gambling, loan sharking, prostitution and the sale of controlled substances or stolen property.

(Prior code § 4-86)

The city council shall have the right to adopt, by resolution, such rules and regulations which shall be reasonable and necessary to regulate the operations of any licensed gaming enterprise and the violation of any such rules and regulations shall constitute grounds for the suspension or revocation of any license or license agreement issued pursuant to the provisions of this chapter. The following rules and regulations are established and promulgated with reference to gaming enterprises and all licensees shall abide by and observe each and all of the following rules:

A. Rule 1. Entertainment. The licensee agrees that all requests for entertainment in a licensed gaming enterprise shall be submitted to the city manager and chief of police for review and approval and must comply with all existing city codes or regulations. All requests shall state with specificity the type of entertainment desired, the hours for such entertainment, and any other information requested by the chief of police. The city manager and the chief of police's decision to approve, approve with conditions, or deny shall be subject to ratification by the city council. The city manager and/or city council may suspend, revoke, or recondition such permit at any time.

B. Rule 2. Alcoholic Beverages.

1. Alcoholic beverages may be sold, dispensed, consumed, or permitted in licensed gaming enterprises in accordance with applicable state and local laws and regulations.

2. No on-duty employee of a gaming enterprise shall consume alcoholic beverages.

3. No complimentary or reduced price alcoholic beverages shall be offered by the gaming enterprise.

4. The licensee or other person in charge or control of any game or card game operating shall not permit any person to play in any game at any time while such person appears to be, or is, under the influence of any alcoholic beverage or controlled substance.

5. The licensee or other person in charge or control of any card game or premises where card games are operating under any license issued pursuant to the provisions of this agreement shall not permit any person to enter the premises while such person appears to be, or in the opinion of the licensee or duly authorized agents or employees, is under the influence of an alcoholic beverage or controlled substance.

6. In addition to any other penalties for violation of this rule it is the specific intent of the city council that any violation of this rule as it relates to the serving of alcoholic beverages in gaming enterprises shall be grounds for the immediate suspension and/or revocation of any license or license agreement.

C. Rule 3. Inspections. All gaming enterprises, books and records of a gaming enterprise, and card schools shall be open for inspection during all hours to the chief of police, the city manager, city's chief financial officer or their duly authorized representatives, without a search warrant.

D. Rule 4. Hours of Operation. Hours of operation shall be imposed by the city council for the protection of the public welfare.

E. Rule 5. Age Limitation. The licensee shall not permit or allow any person under the age of twenty-one (21) years to play in a game licensed hereunder at any time.

F. Rule 6. Credit and Check Cashing. The giving of credit or lending of anything of value to a patron and the cashing of checks of patrons shall be permitted only if the licensee's written check cashing and credit policies are posted at the cashier's window. Licensee further agrees to adhere to all federal regulations restricting cash transactions, including, but not limited to those provisions set forth in 31 USC Section 5311 et seq.

G. Rule 7. Tournaments. Notwithstanding the foregoing rules, tournaments shall be permitted provided that the time, place and special rules, including minimum and maximum bets for such tournament play, are first submitted to and approved by the city manager or designee.

H. Rule 8. Cheating. All persons caught cheating in the establishment shall be reported to the Coachella police department and the licensee shall cooperate fully in the prosecution of all persons who are criminally charged with cheating in the licensed establishment. Cheating devices shall be confiscated and shall not be returned to the person or persons using or bringing such devices on the premises.

I. Rule 9. Subletting. The licensee agrees and acknowledges that it is unlawful for any person as an operator, agent, and/or employee of any duly licensed gaming enterprise to assign, arrange for, or in any other manner sublet, directly or indirectly, with or without consideration, to any person not having a valid unrevoked license to conduct card games from that specific gaming enterprise location. It shall likewise be unlawful for any person to conduct any game permitted by law as provided pursuant to the provisions of this chapter, in a duly licensed gaming enterprise not having a valid unrevoked license to conduct such game or games. It shall also be grounds for the revocation or suspension of any license issued to any gaining enterprise to permit the farming out, assigning, subcontracting, or subletting of any game lawfully permitted pursuant to the provisions of this chapter.

J. Rule 10. Posting of Prices Required. The licensee agrees that all membership fees, playing fees or charges as well as price of refreshments and food offered shall be posted conspicuously in all rooms of the gaming enterprise and card school.

(Prior code § 4-87)

In the event that any license or license agreement is issued under this chapter, the city council may create a gaming commission for the purpose of overseeing the licensee's compliance with the provisions of this chapter and the license or license agreement. The gaming commission may conduct any investigations which it deems necessary to assure such compliance. For that purpose, the gaming commission shall have access to the premises of the card club, card school or gaming enterprise, the employees and the books and records thereof. The gaming commission shall be composed of five persons, three of which shall be residents of the city; including any member of the city council. The members of the gaming commission shall receive a stipend for their services and reimbursement of their expenses provided that such stipend and expenses shall be paid solely from gaming revenues including any fee which the city council may impose on a licensee to pay for the cost of the affairs of the gaming commission.

(Prior code § 4-88)

Any license or license agreement issued pursuant to this chapter may be invalidated, suspended or revoked if the city council finds that any of the following conditions exist:

A. The licensee or any agent or employee thereof, has violated, or allowed or caused the violation of, any provision of this chapter.

B. The licensee or any agent or employee thereof, has violated, or allowed or caused the violation of, any term or condition of the license or license agreement issued by the city council under this chapter.

C. The licensee or any agent or employee thereof, has made, or allowed or caused to be made, any fraudulent or misleading statement as to a material fact submitted in an application form, or about any other information presented or requested as part of the application process.

D. The licensee has ceased or substantially ceased to do business during any thirty (30) days out in any twelve-month period.

(Prior code § 4-89)

A. Whenever the city council, city manager, the chief of police, the chief financial officer or the city attorney has information that a ground for suspension, revocation or invalidation exists, the same may be investigated further or set for hearing before the city council. The city manager shall give written notice to the licensee of the circumstances constituting sufficient grounds and the time and place of the hearing before the city council not less than five days in advance of the date set by for such hearing.

B. At the time set for such hearings, the city council shall hear the evidence supporting the grounds for suspension, revocation or invalidation. Thereafter the city council shall permit the licensee, and any other interested person, to present such evidence as may be relevant to dispute or support the existence of such grounds. The city council may continue the hearing.

C. The city council shall, at its discretion, cause to be issued and served any subpoenas as it may direct in accordance with the provisions of the laws of the state relating thereto requiring the attendance of any person whom the city council deems in its discretion to be a necessary and proper party to testify as to any material matter concerning any licensee or any of its agents, officers, employees, partners, pointholders or shareholders.

D. If, based upon the evidence presented, the city council finds the existence of grounds for suspension, revocation or invalidation, the city council may suspend or revoke the license or license agreement or, in the alternative, the city council [may] impose such conditions as it may determine including the imposition of a fine. If it finds that such facts are not present, it shall dismiss the proceedings. The decision of the city council shall be final and conclusive.

(Prior code § 4-90)

A. The licensee shall agree, as a condition of the issuance of any license or license agreement, that any person(s) having any interest whatsoever or at all in the ownership of a gaming enterprise, whether legal or equitable, or as trustor or trustee, or of whatsoever kind or character shall divest himself or herself of such ownership interest within one hundred twenty (120) days after service of a notice of divestiture is served on such person by the chief of police upon such person's final conviction of a misdemeanor involving moral turpitude or a felony. A plea or verdict of guilty, or conviction following a plea or nolo contendere to a misdemeanor involving moral turpitude or a felony shall be deemed to be a final conviction within the meaning of this section, and shall constitute the final action pursuant to which notice of divestiture shall be served if the conviction is affirmed. Within thirty (30) days after the service of a notice of divestiture, the person or persons subject to such notice may request in writing a hearing before the city council to appeal the notice and request a waiver of the divestiture requirement or a transfer to a trustee.

B. A hearing shall be scheduled before the city council within thirty (30) days after the receipt of the written request. Upon the conclusion of the hearing, the city council may order a divestiture or relieve the person from a divestiture, permit a transfer to a trustee or impose a lesser penalty if the city council finds substantial circumstances in mitigation and finds that the public safety and welfare can be protected by an order other than divestiture. In making such a determination, the city council may consider the following factors:

1. The type, nature and extent of the point holder's interest, including the involvement, if any, in the operations of the gaming enterprise;

2. The nature, time, and seriousness of the offense;

3. The circumstances surrounding the conviction;

4. The age of the person at the time of the conviction;

5. The presence or absence of rehabilitation or efforts at rehabilitation;

6. Contributing social and environmental conditions;

7. The record of the proceedings leading to the conviction;

8. The financial stability of the point holder, including his or her personal history, reputation for habits and traits of character and moral background; and

9. Such other factors deemed relevant by the council in determining the status of the point holder.

C. The decision of the council shall be final and conclusive.

D. No person required to divest a gaming enterprise related interest pursuant to an order of divestiture shall transfer the same to his or her spouse, child, sibling, parent or to his or her spouse's child, sibling or parent.

E. Failure to comply with a notice of divestiture shall constitute a misdemeanor punishable by a fine or imprisonment for one year. Each day of noncompliance shall constitute a separate offense. In addition, the city attorney may bring an action to enforce compliance.

(Prior code § 4-92)

A. The licensee shall defend and indemnify and hold the city, its officers and employees, harmless from and against all liability damages, including any injury or death, noncompliance with public bidding laws asserted to be applicable to any work performed by the licensee, attorney's fees and costs which may be caused by any of licensee's activities under this chapter, whether such activities or performance thereof was caused by licensee, its agents, employees or contractors, and whether such damage shall accrue or be discovered before or after the commencement of the operation of the licensee's gaming enterprise.

B. The licensee shall obtain and, at all times during the term of any license or license agreement issued under this chapter, maintain in force a comprehensive bodily injury liability and property damage insurance policy in the minimum amount of three million dollars ($3,000,000.00) combined single limit per occurrence. The policy shall name as an additional insured, the city, and their officers and employees, while acting within the scope of their duty against all claims, suits, or other actions of any nature brought for or account of any deaths, injuries, damage or loss, arising out of or in connection with the construction of the gaming enterprise facility and the operations of any gaining enterprise licensed under this chapter.

(Prior code § 4-93)

In the event of any legal action instituted by a third party or other governmental entity or official challenging the validity or the issuance of any license or license agreement under this chapter, the licensee, as a condition of the issuance of same, shall defend the city in any such action or pay the city to defend such action as determined by the city attorney.

(Prior code § 4-94)

A. It is unlawful for any person to play, or to permit the playing, of any game described in this chapter at any place within the city except at a place operated under a license or license agreement issued under this chapter.

B. It is unlawful for any licensee, or any agent or employee of any licensee, to provide any beverage, food, service or other gratuity to any employee of the city.

C. It is unlawful for any licensee, or any agent or employee of any licensee, to allow any of the following activities at any facility licensed in this section:

1. Any person to wager any amount in excess of the posted wagering limit for the table or unit at which the person is then playing;

2. Any illegal gambling, act of cheating or act of prostitution by any person; or

3. Any playing of any game by any employee of the licensee while that employee is on duty.

D. It is unlawful for any licensee, or any agent or employee of any licensee, to derive any revenue from games other than from specified periodic fee, per hand fee or other approved fee or from any other enterprise except as approved by the city council.

E. The violation of any provision of this chapter shall constitute a misdemeanor punishable by a fine not to exceed one thousand dollars ($1,000.00) or imprisonment in the county jail not to exceed one year. Each day in which a violation occurs shall be deemed to be a separate violation.

(Ord. 891 § 21, 2003; prior code § 4-95)

This chapter shall be construed to effectuate the purposes for which it was adopted. To that end, the city council shall implement the purposes and provisions of this chapter and may adopt any and all regulations, by ordinance or resolution, reasonably necessary for those purposes. However, this chapter shall not be repealed except by a vote of the people of the city although the city council may amend this chapter to implement its purposes and provisions and to comply with any requirement which may be imposed by the state pertaining to gaming without a further vote of the people.

(Prior code § 4-96)