Article II — Licenses

• A. It is unlawful for any person to commence or conduct, or purport to commence or purport to conduct, within the City any business, activity, enterprise, undertaking or place, where tables or other items or units of furniture are used directly or indirectly for playing games with cards, dominoes or other implements and for the use of which a fee, commission, or compensation is directly or indirectly charged, accepted, or received from players or participants in any such playing of games until such person shall have first obtained a license to do so under and in compliance with the provisions of this chapter.

• B. No application form for a license for the conduct of any game and/or business under this chapter shall be furnished by the City Manager as provided in Section 17.152.140 of this chapter, nor shall any application for any license be received and filed by the City Manager, nor shall the City Manager be required to process any such application, nor shall a public hearing on the same be conducted unless:

  1. Construction has commenced or has been completed on a hotel as provided in Section 17.152.150(G) of this chapter; and

2. The application is for a license as authorized under Section 17.152.150(A) of this chapter.

(Prior code § 111.25)

Any person desiring or proposing to commence or conduct any business, activity, enterprise, undertaking, or place named, designated, specified or referred to in this chapter for the playing of legal games shall file with the City Manager a written application for a license to do so as required by the provisions of this chapter. Concurrently with the filing of the application, each person identified therein shall be fingerprinted by the City Manager or designee, and no application shall be deemed filed until the fingerprinting is completed. Each such application shall contain clearly and truthfully, under oath or affirmation, set forth and show, in addition to such other information as the City Manager shall require, the following information:

• A. The date of the application;

• B. The true name of the applicant, and any other names by which the applicant has been known;

• C. The status of the applicant as being an individual, firm, association, partnership, joint venture, or corporation;

• D. If the applicant is an individual, the residence and business address of such applicant;

• E. If the applicant is other than an individual, the true name, residence and business address of each point-holder, partner and officer of the applicant; and any other names by which such pointholder, partner and officer of the applicant has been known;

• F. A full and complete financial statement of the applicant, whether it is an individual, corporation, partnership, or other entity and a full and complete financial statement of each pointholder, partner and officer of the applicant; provided, the financial statements required by this chapter shall be deemed confidential in character and shall not be open to public inspection but shall be available to those City officials having jurisdiction over gaming clubs pursuant to the Gaming Registration Act of the State, and to any court of competent jurisdiction where any matter relating thereto may be actually pending;

• G. The type of nature of the legal games proposed to be played;

• H. The number of tables or other units to be placed, employed or used;

• I. A copy of the proposed players’ house rules;

• J. The proposed location of the business for which the license is sought, and evidence of ownership or control of such proposed location;

• K. A description of the building proposed for such usage;

• L. A statement that such building will conform to all the laws of the State and the City for occupancies of the nature proposed;

• M. A statement that the applicant understands that the application shall be considered by the City Council only after a full investigation and report have been made by the City Manager;

• N. A statement that the applicant understands and agrees that any business or activity conducted or operated under any license issued under such application shall be operated in full conformity with all the laws of the State and the laws and regulations of the City applicable thereto, and that any violation of any such laws or regulations in such place of business, or in connection therewith, shall render any license therefor subject to immediate suspension or revocation; and

• O. A statement that the applicant has read the provisions of this chapter and particularly the provisions of this section and understands the same.

• (Prior code § 111.26)

• A. After issuance of the first license, the City may issue additional licenses within the City Council’s sole discretion.

• B. A licensee may operate the game room 24 hours per day.

• C. A licensee must provide or have provided to it and its patrons full restaurant service 24 hours per day or during the hours that the game room is operating.

• D. Employees should be local residents whenever possible and if qualified. All employees of the gaming club shall be fingerprinted and licensed, subject to the conditions in Section 17.152.030 of this chapter, by the City.

• E. A licensee shall not operate a gaming club that has less than 20 playing tables.

• F. A gaming club must be located in a freestanding building in which the area devoted to the game room is not less than 4,560 square feet; the gaming club may be located in a portion of the hotel

described in subsection G of this section and may consist only of a game room.

• G. It is the intention of the people of the City to award a license and such license to be utilized in the development of a hotel complex for the multiple benefit citizens of the City consistent with the City’s general plan as amended on August 2, 1988, and in effect at the end of that year and with its zoning ordinance as amended on September 15, 1987, and in effect at the end of that year regarding hotels and VS zones. Therefore, the people of the City intend to award a license and intend that such license be utilized in connection with and so as to promote, encourage and support tourist-related hotel development and activity utilizing natural hot mineral water. Thus, the license shall provide for the establishment of either in the same building or on property immediately adjacent to the gaming club, a hotel constructed subsequent to August 2, 1988, and located within the area designated as a VS Zone and within the Hotel Village area. The hotel shall have no less than 100 rooms and shall contain minimum banquet space of 4,000 square feet and shall be located on a minimum lot of 5 acres. An applicant may apply for a license upon commencement of construction of the hotel or any time thereafter. The license shall not be granted until the hotel is completed. In acting on an application, the City may grant a license to be made effective upon completion of the hotel and may specify a time period within which the license is to be effective, if at all. The holder of a license as defined in Section 17.152.010 of this chapter may operate the legal gaming club in the area defined in subsection F of this section by virtue of ownership, lease or exclusive license of the area. If the hotel required by this subsection is not owned by the licensee, then the owner of the hotel shall file with the application a statement under oath that its hotel may be used to qualify the license; once the license is granted, the hotel shall not qualify any additional licenses unless the original license is revoked or surrendered. Any hotel built prior to August 2, 1988, which otherwise complies with this chapter, may be used to qualify a license upon proof that it complies with current zoning and building and safety codes.

• H. The gaming club licensed shall be in effect until such time that it is revoked, suspended or surrendered.

• I. Not withstanding the provisions of subsection G of this section, the gaming club must be in operation within 3 years of issuance of the gaming license or such license is revoked.

• J. The City shall cooperate and facilitate the development of the gaming club under the City’s normal procedures and shall not unreasonably deny approval or create any inordinate delays in the construction of any part of these facilities.

• (Prior code § 111.27)

For the purpose of clarification, the license fees set forth in this chapter are for both regulation and revenue purposes and are levied pursuant to the authority of applicable laws. Each such application for any license shall be accompanied by fees and deposits, payable to the City as follows:

• A. A onetime application fee of $250 per person identified in the application as a pointholder/owner shall be retained by the City for the cost of investigation.

• B.

1. A license fee deposit of $10,000 which shall be the property of and retained by the City. In the event that the license applied for is issued, the license fee described herein shall be applied as a credit for the first installment of the initial license fees described in Section 17.152.170 hereof.

2. In the event that the license applied for is not issued, the license fee deposit described herein shall be returned to the applicant.

• C. Each applicant shall be properly licensed by the Gaming Registration Division of the California Attorney General’s Office.

(Prior code § 111.28)

• A. Each licensee, licensed pursuant to the provisions of this chapter, shall pay to the City a monthly fee. The monthly fee shall be $4,000, or 10% of monthly gross revenue of the legal game business so licensed, whichever is greater. Licensees shall have no obligation to pay monthly fees under this section until September 1, 1993.

• B.

1. Accounting. To facilitate the accounting of gross revenue, the licensee shall provide a secure, metal box or container under each gaming table into which shall be placed rental fees and all other fees paid by patrons of the licensee which are included in the definition of “gross revenue” contained in Section 17.152.010 of this code. Such fees shall be paid into the box with chips purchased by patrons from the licensee. All metal boxes shall be secured by 2 locks: the City reserves the right to have the only key to 1 lock; the licensee shall have the only key to the other lock. The City reserves the right to have all boxes opened at agreed upon dates and times, in the presence of representatives from both licensee and the City, and the contents counted and logged by both parties. Monthly tabulations of daily accounting may be shared and matched by the licensee and the City.

2. Statement of Revenue. Each licensee shall file with the City Manager before the 15th day of each calendar month a statement, under oath, showing the true and correct amount of gross revenue derived from the legal game business, 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 subsection A of this section and such sums correctly reflecting the monthly fees payable for the preceding month shall be accepted by the City, subject, however, to the right of the City to audit the matters referred to in the statement and to determine the correctness of the figures set forth in such statement and the amount payable to the City pursuant to the provisions of subsection A of this section.

3. Audit of Records.

   • a. The books, records and accounts relating to the gross revenues of all gaming licensees in the City shall be audited at the licensee’s expense at the end of the licensee’s fiscal year by a certified public accountant. The report of such accountant and all work papers utilized in the preparation of such audit shall be submitted to the City Manager. The City Manager or designee shall review the report and work papers and may require any further information from the licensee. The City Manager may submit such documents and information to a certified public accountant selected by the City.

tified public accountant. The report of such accountant and all work papers utilized in the preparation of such audit shall be submitted to the City Manager. The City Manager or designee shall review the report and work papers and may require any further information from the licensee. The City Manager may submit such documents and information to a certified public accountant selected by the City.

• b. The City may require, at any time, an audit of the gross revenues of any licensee by a certified public accountant. Such audit shall be in addition of the audit mentioned in the preceding paragraph. Any inaccuracy found in the revenues previously reported to the City shall be adjusted accordingly. If such additional audit shall disclose an inaccuracy of greater than 2% error with respect to the gross revenues reported by the licensee for the period of such audit, the cost thereof shall be paid to the City by the licensee; otherwise, the cost of such audit shall be borne by the City.

• c. Nothing set forth in this section shall limit the City’s right at any time to inspect or audit the books, records and accounts of any licensee relating to items other than gross revenues.

• d. Any information obtained pursuant to the provisions of this section or any statement filed by a licensee shall be deemed confidential in character and shall not be subject to public inspection, except in connection with the enforcement of the provision of this chapter. It shall be the duty of the City Manager to so preserve and keep such information so that the contents thereof shall not become known, except to persons charged by law with the administration of the provisions of this chapter or pursuant to the order of any court of competent jurisdiction.

• C. The revenues collected under this chapter shall be part of the general fund. The people encourage the City Council, to the extent permitted by law, to use and devote increases in the general fund for such purposes as paramedic services, child care centers, boys and girls clubs and senior citizens centers; however, the City Council may utilize revenues generated under this chapter for whatever lawful purposes it deems of greatest need. The provisions of this subsection are precatory only and impose no duty on the City Council to earmark revenues collected pursuant to this chapter or to devote revenues to the purposes set forth in this subsection.

(Prior code § 111.29)

• A. Investigations Required. Whenever an application has been filed with the City Manager for a license pursuant to the provisions of this chapter, the City Manager shall make an investigation as follows:

  1. A full and complete investigation of the applicant (including its pointholders, partners and officers);

  2. A full and complete investigation of the building and location where the applicant proposes to conduct such business or activity;

  3. A full and complete review as to the type of tables or units to be used at, or in connection with, the proposed business and the rules for and type of games proposed to be played, which review shall also include the proposed locations of the tables or other units in, within, or about the proposed place of business; and

  4. A determination that the applicant, and each pointholder thereof, has obtained or will obtain valid registration from the California State Attorney General pursuant to the State’s Gaming Registration Act.

• B. Reports Required. The City Manager shall make such investigation with reasonable promptness and shall report to the City Council with reference thereto in due course, and shall make investigations with reasonable promptness as to all matters within his/her jurisdiction concerning the public health and safety as may be concerned with such application.

• (Prior code § 111.30)

The City Council shall deny issuance of any license under the provisions of this chapter in any of the following cases:

• A. If the proposed business or activity to be operated is in violation of any State or City law or regulation;

• B. If the game or games for which a license is applied for is/are unlawful; or

• C. If the applicant, and each pointholder thereof, has not first obtained a valid registration from the California State Attorney General pursuant to the State’s Gaming Registration Act prior to the opening of the club.

(Prior code § 111.31)

• A. General. All licenses issued pursuant to the provisions of this chapter may be revoked in the time and manner set forth in this section.

• B. Grounds. Any license issued pursuant to the provisions of this chapter shall be suspended as hereinafter set forth:

  1. The Attorney General has suspended or revoked a licensee’s registration under the Gaming Registration Act of the State;

  2. That a licensee has failed to pay, when due and payable, any of the license fees or other fees provided for in this chapter;

  3. That a licensee has made any fraudulent statement as to a material fact on an application form, or as to any other information presented as part of the application process; or

  4. The licensee has wilfully violated any provisions of Sections 17.152.020 and 17.152.060 of this chapter.

• C. Action of City Manager. Whenever the City Manager has information that a violation constituting a ground for suspension or revocation has occurred, he or she shall forthwith investigate the same. If the City Manager determines that such a violation has occurred, he or she shall forthwith set the matter for a hearing pursuant to applicable sections of Chapter 4.36 of the Desert Hot Springs Municipal Code, as may be amended.

(Prior code § 111.32; Ord. 695 10-15-19)

Upon application by the licensee, the City Council may modify any license by a majority vote. An application for a modification shall be accompanied by an application fee of $250. (Prior code § 111.33)

If a nonprofit organization which qualifies for tax exempt status under the United States Internal Revenue Code Sections 501 or 503 , except for Section 17.152.150(A) , (F) and (G) , qualifies for a license under this chapter, the City Council in its sole discretion may grant such a license notwithstanding Section 17.152.150 so long as each license is for no more than 4 card tables and so long as the total licenses granted pursuant to this section do not license an aggregate number of tables in excess of 16. The City Council’s decision under this section shall be final. (Prior code § 111.34)