Chapter 16.02

GAMING CONTROL REGULATORY PROGRAM

Parts:

• 1 General Provisions

• 2 Definitions

Part 1

GENERAL PROVISIONS

Sections:

• A. Effective and comprehensive regulation of the practices, activities, persons and places associated with or involved in gaming in San José is essential for the protection of the public health, safety and welfare.

• B. The purpose of this title and the gaming control regulatory program authorized by this title is to maintain public confidence:

  1. In the integrity of cardroom operations by requiring strict regulatory controls and enforcement practices to carefully monitor gaming activity at cardrooms; and

  2. In the integrity of nonprofit organization fundraisers held either in permitted San José cardrooms or elsewhere in the City of San José by eligible nonprofit organizations by requiring regulatory controls and enforcement practices pursuant to the requirements of state gambling law, the gaming control regulatory program and Title 16.

• C. The gaming control regulatory program is further designed to regulate the persons, locations and practices of permitted San José cardrooms and funding sources.

• D. In enacting this gaming control regulatory program, the city council does not intend to allow more than the number of card tables currently authorized by the San José Municipal Code or to increase the number of card tables available.

• E. It is the intent of the city council to regulate cardrooms and nonprofit organization fundraisers in this city concurrently with the State of California, to the extent authorized by, and as required by, the gambling control act codified under the California Business and Professions Code and the regulations of the State of California Department of Justice and the California Gambling Control Commission.

• F. The provisions of this title shall be broadly construed for the purpose of authorizing strict regulatory controls and oversight of the cardrooms and funding sources.

• G. Any license, permit, approval or registration issued pursuant to the provisions of this title is a revocable privilege and no holder acquires any right in the license, permit, approval or registration other than the procedural rights granted under this title or as required by the United States or California Constitution.

• (Ord. 28517.)

• A. The Cardroom Permittee shall be responsible for every violation of the requirements of this title committed by the permittee, any Employee, Independent Contractor, Funding Source, Funding Source Owner, Funded Player, or Funding Source Employee that the Administrator determines is a minor violation under San José Municipal Code Section 16.33.010.

• B. In the case of a violation of a requirement of this Title, other than a minor violation, by an Employee or Independent Contractor, Funding Source, Funding Source Owner, Funded

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§ 16.02.020

Player, or Funding Source Employee, the Administrator shall have the discretion to take any action authorized by this Title against the person who committed the violation, as well as the Cardroom Permittee, the Employee of the permittee, any Key Employee who is responsible for the supervision or management of the person who committed the violation, or against any combination of them, who knew or should have known of the violation.

• C. In the case of a violation of a requirement of this Title, other than a minor violation, by a Key Employee, the Administrator shall have the discretion to take any action authorized by this Title against the Cardroom Permittee, the Key Employee, or both.

(Ords. 28517, 30616.)

The funding source shall be responsible for every violation of the requirements of this title committed by any funded player, funding source employee or independent contractor of the funding source.

(Ord. 28517.)

police, the administrator, other officers or employees of the City of San José, or a hearing officer shall not result in any automatic decision, determination, or regulatory action in favor of a person subject to regulation under this title. (Ord. 28517.)

Part 2

DEFINITIONS

Sections:

• 16.02.210 Administrator.

• 16.02.220 Ante.

• 16.02.230 Applicant.

• 16.02.240 Automatic teller machine.

• 16.02.250 Backline betting.

• 16.02.251 Bureau.

• 16.02.255 Business day.

• 16.02.260 Card table.

16.02.270 Cardroom.

• 16.02.275 Cardroom permittee.

16.02.280 Cardroom premises.

This title provides for administrative enforcement of its provisions, which are in addition to all other legal and equitable remedies, administrative, criminal or civil, that may be pursued by the city to address any violation of this title. (Ord. 28517.)

The amount of any fee, cost, or charge imposed by this title shall be deemed to be a debt to the city that is recoverable in any court of competent jurisdiction.

(Ord. 28517.)

Consistent with Chapter 1.04 of this Code, the failure to comply with the provisions of this title setting forth time limits for action by the chief of

16.02.290 Charitable organizations.

• 16.02.292 Commission.

16.02.295 Complete application.

16.02.300 Controlled gambling.

16.02.310 Controlled game.

• 16.02.315 Eligible nonprofit organization.

• 16.02.320 Employee.

• 16.02.330 Financial source.

• 16.02.340 Funded player.

• 16.02.350 Funding source.

• 16.02.355 Funding source employee.

• 16.02.356 Funding source owner.

• 16.02.360 Gambling.

• 16.02.370 Gambling enterprise employee.

• 16.02.375 Gambling equipment.

16.02.380 Game.

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§ 16.02.250

16.02.400 Gaming day.

16.02.410 Hand.

16.02.415 Independent contractor.

16.02.420 Key employee.

16.02.430 Landowner.

16.02.435 License.

16.02.440 Licensee.

16.02.450 Non-gambling enterprise employee.

16.02.455 Nonprofit organization fundraiser.

16.02.460 Owner.

16.02.465 Patron.

16.02.470 Permissible games.

16.02.475 Person or entity.

16.02.480 Player-dealer.

16.02.490 Pot.

16.02.500 Proposition player.

16.02.505 Registrant.

16.02.510 Regulation.

16.02.520 Regulatory action.

16.02.530 Reportable condition.

16.02.540 State gambling law.

16.02.550 Title.

16.02.560 Vendor.

The definitions set forth in this part shall govern the application and interpretation of this title. (Ord. 28517.)

individually in accordance with submitted and approved game rules in the pot prior to being dealt a hand at a permissible American poker game. (Ord. 28517.)

"Applicant" means any person who applies for:

• A. The renewal or amendment of a cardroom permit; or

• B. A license or the renewal or amendment of a license; or

• C. A work permit or the renewal of a work permit; or

• D. Registration or renewal of registration pursuant to Chapter 16.50 of this title.

• (Ord. 28517.)

• A. "Automatic Teller Machine" means:

  1. Any electronic information processing device used by a financial institution and its customers for the primary purpose of executing transactions solely between the financial institution and its customers; and/or

  2. Any electronic information processing device located in California which accepts or dispenses cash in connection with a credit, deposit, or convenience account.

• B. Devices used solely to facilitate check guarantees or check authorizations, or which are used in connection with the acceptance of or dispensing of cash on a person-to-person basis are not Automatic Teller Machines.

• (Ords. 28517, 30616.)

"Administrator" means the administrator of gaming control or his or her designee. (Ord. 28517.)

"Ante" means a predetermined amount of approved gaming chips that each player must post

"Backline betting" means either or both of the following types of bet or wager:

• A. Any bet or wager made by a person who is not seated at the card table at any player-position, including that of a playerdealer; or

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§ 16.02.250

• B. Any bet or wager made by a person seated at the table at another's player-position, including that of a player-dealer.

• (Ord. 28517.)

and state gambling law is not a cardroom for purposes of this title, unless the nonprofit organization fundraiser is held on the cardroom premises of a cardroom permittee. (Ord. 28517.)

"Bureau" means the California Department of Justice, Bureau of Gambling Control. (Ord. 30616.)

"Business Day" means a calendar day excluding Saturdays, Sundays, holidays observed by the City, and any other days in which the City is officially closed for the normal transaction of business. (Ord. 30616.)

• A. "Card table" means any table or any other surface upon which any controlled game is played, dealt, operated, carried on, conducted, maintained, or exposed for play.

• B. Any table or any other surface upon which a controlled game is played, dealt, operated, carried on, conducted, maintained, or exposed for play for the purpose of raising funds for an eligible nonprofit organization at a nonprofit organization fundraiser held in compliance with the requirements of Chapter 16.50 of this title and state gambling law, is not a card table for purposes of this title, unless the nonprofit organization fundraiser is held on the cardroom premises of a cardroom permittee.

• (Ord. 28517.)

"Cardroom permittee" means a person, firm or entity that holds a cardroom permit issued in accordance with the provisions of this Title 16. (Ord. 28517.)

"Cardroom premises" means any building or place where, in return for any fee, charge or other compensation, any person or persons are permitted to play a controlled game. Cardroom premises include, but are not limited to, all portions of the building in which controlled games are permitted to be played, all back of the house space, restaurants, lounges, banquet halls, meeting rooms, parking facilities, office space, auxiliary structures and all on or off-site property warehouse, storage and/or depository structures associated with the operation of the cardroom, even if the controlled games are not actually conducted in or on that space. (Ord. 28517.)

"Charitable organizations" means organizations exempted from the payment of the bank and corporation tax by Sections 23701a, 23701b, 23701d, 23701e, 23701f, 23701g, 23701l of the California Revenue and Taxation Code. (Ord. 28517.)

• A. "Cardroom" means any building or place where, in return for any fee, charge, compensation, consideration, credit, reward, representation of value or thing of value, a controlled game is played, dealt, operated, carried on, conducted, maintained, or exposed for play.

• B. Any building or place where a nonprofit organization fundraiser is held in compliance with the requirements of Chapter 16.50 of this title

"Commission" means the California Gambling Control Commission. (Ord. 30616.)

"Complete Application" means an application deemed by the Administrator to be timely received, accompanied by all applicable fees and with all

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§ 16.02.356

information and documentation required by this Title, any Regulations promulgated by the Administrator and any instructions prescribed by the Administrator in connection with the application process.

(Ord. 30616.)

"Controlled gambling" means to deal, operate, carry on, conduct, maintain, or expose for play any controlled game.

(Ord. 28517.)

"Controlled game" means any controlled game as defined under state gambling law. (Ord. 28517.)

any person with whom the cardroom permittee has an agreement for the lease of equipment or other personal property.

(Ord. 28517.)

"Funded Player" means a natural person or player who plays permissible games at a permitted cardroom with financing provided by a third-party provider of proposition player services, also known as a "funding source" as defined in Section 16.02.350. For the purpose of this title, "Funded Player" also means a third party "proposition player" or "player" as defined under Title 4 of the California Code of Regulations, Division 18.

(Ords. 28517, 30616.)

"Eligible nonprofit organization" means a nonprofit organization that is qualified to conduct business in California; has been in existence for at least three years; and is exempt from taxation under California Revenue and Taxation Code Sections 23701a, 23701b, 23701d, 23701e, 23701f, 23701g, 23701k, 23701l or 23701w.

(Ord. 28517.)

"Employee" means a natural person who is employed, with or without compensation, by the Cardroom Permittee and who performs work in a Key Employee position, a Gambling Enterprise Employee position, or a Non-Gambling Enterprise Employee position who is subject to work registration.

(Ords. 28517, 30616.)

"Funding source" means any person that provides the financing, including but not limited to loans, credit, currency, negotiable instrument, chips or any other representation or thing of value to a funded player for use in the playing of a permissible game at a permitted cardroom. For the purpose of this title, "funding source" also means "third-party proposition player services" or "proposition player services" as defined under Title 4 of the California Code of Regulations, Division 18 or "third-party provider of proposition player services" as used in California Business and Professions Code Section 19984.

(Ord. 28517.)

"Funding Source Employee" means a natural person who is employed, with or without compensation, by the Funding Source. (Ords. 28517, 30616.)

"Financial source" means any person who offers or provides a loan, credit, or any other form of financing to a cardroom permittee or holds evidence of indebtedness in a cardroom permittee. "Financial source" shall not be construed to include

"Funding Source Owner" means a natural person or entity who owns an interest in a Funding Source or Funding Source Licensee. (Ords. 28517, 30616.)

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§ 16.02.360

"Gambling" means to deal, operate, carry on, conduct, maintain, expose for play, or play any controlled game. (Ord. 28517.)

"Gambling Enterprise Employee" means a natural person employed in the operation of a permitted Cardroom whose employment duties require or authorize access to restricted areas of the Cardroom Premises or to public areas where Gambling occurs. (Ords. 28517, 30616.)

"Gambling Equipment" or "Gaming Equipment" means any equipment, including but not limited to, playing cards, shuffler machines, lammer buttons, dice, dice cups, tiles, gaming chips, gaming plaques, card-dispensing shoes, table layouts, drop boxes, mechanical or electromechanical or electronic device, component or machine and other device, used remotely or directly in connection with Gaming at a Permitted Cardroom. (Ords. 28517, 30616.)

"Game" means any controlled game. (Ord. 28517.)

"Gaming" means to deal, operate, carry on, conduct, maintain, expose for play, or play any controlled game. For purposes of this title, the terms "gambling" and "gaming" are synonymous. (Ord. 28517.)

"Gaming chips" and "gaming plaques" means a non-metal or partly metal representative of value issued by a cardroom permittee for use only as a wager or as a tip while playing permissible games in a permitted cardroom. (Ord. 28517.)

"Gaming day" means the normal business cycle in a twenty-four-hour period, regardless of actual operating hours, designated by a cardroom permittee by which the cardroom keeps its books and records for business, accounting, and tax purposes. For purposes of this title, each cardroom permittee may have only one gaming day, common to all of its operations. (Ord. 28517.)

"Hand" means:

• A. In any Permissible Game featuring a rotating player-dealer, the process by which wagers are placed, cards or tiles are dealt, collection fees are collected and bets are reconciled in accordance with the approved rules of the Permissible Game.

• B. In any Permissible Game of an American poker game, the process by which hands are dealt, wagers are placed, collection fees are collected, and the winner of the Pot is determined and paid in accordance with the approved rules of the Permissible Game.

• (Ords. 28517, 30616.)

"Independent contractor" means any person or entity who is not an employee of the cardroom permittee that performs work on the premises of a permitted cardroom or provides goods or services related to the operation of the cardroom premises under contract or agreement with the cardroom permittee or its owners. "Independent contractor" shall include all employees of the independent contractor, all subcontractors of the independent contractor, and all employees of said subcontractors who perform work on the premises of a permitted cardroom or provide goods or services related to the operation of the cardroom premises under contract or agreement with the cardroom permittee or its owners.

(Ord. 28517.)

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§ 16.02.465

"Key Employee" means a natural person employed in the operation of a Cardroom in a supervisory capacity who is authorized or empowered to make discretionary decisions with regard to Gambling operations or who functions in a manager, director or department head capacity, regardless of title, including, without limitation:

• A. General manager and any supervisors in a direct reporting line to the general manager.

• B. Managers of the cashiers' cage, table operations, security and surveillance departments, or the functional equivalents of those departments, and any supervisors in a direct reporting line to those managers.

• C. Managers of the compliance, finance, and information technology departments or the functional equivalents of those departments.

• D. Any natural person holding a position or performing a function designated as a Key Employee under State Gambling Law.

• E. Any natural person holding a position or performing a function designated as a Key Employee by the Administrator for reasons consistent with the public interest and the policies of this Title.

• (Ords. 28517, 30616.)

"Landowner" means any person who owns any interest in the premises of a permitted cardroom or in the real property used by a permitted cardroom. (Ord. 28517.)

"License" means a license issued pursuant to the provisions of this title. (Ord. 28517.)

"Licensee" means any person holding a valid license under the provisions of this title. (Ord. 28517.)

"Non-Gambling Enterprise Employee" means:

• A. A natural person employed in the operation of a Permitted Cardroom whose employment duties do not require or authorize access to restricted areas of the Cardroom or to public areas where Gambling occurs; and

• B. A natural person employed in the operation of a Permitted Cardroom whose employment duties the Administrator determines do not require a work permit for reasons consistent with the public interest and the policies of this Title.

(Ords. 28517, 30616.)

"Nonprofit organization fundraiser" means a fundraiser using controlled games held by an eligible nonprofit organization pursuant to the requirements of state gambling law.

(Ord. 28517.)

"Owner" means every person who owns an interest in any cardroom or cardroom permittee. (Ord. 28517.)

"Patron" means any person, except an employee or independent contractor performing work on the cardroom premises, who frequents, plays any permissible game, or purchases any goods or services on the cardroom premises of a cardroom permittee.

(Ord. 28517.)

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§ 16.02.470

"Permissible games" are controlled games that have been approved by the administrator pursuant to Chapter 16.18 of this Title.

(Ord. 28517, Measure K (Ord. 2010.1), adopted by electorate, 6-8-10.)

"Person or entity" shall have the meaning stated in Subdivision (b) of California Business and Professions Code Section 19987 when this term is used in Chapter 16.50 of this title. Otherwise, the word "person" shall have the meaning set out in Chapter 1.04 of Title 1 of this Code.

(Ord. 28517.)

"Player-dealer" means the player who acts as the banker in California games such as pai gow, double hand poker, super pan 9, and California aces (22), against whom all other players must compare their hands. The player-dealer may win, lose or draw up to the amount he or she wagers on a hand as permitted under the rules of the game. When the player-dealer's wager is depleted, the hand is over, even if some players have not had a chance to participate.

(Ord. 28517.)

"Pot" means the total amount of money that is staked by all the players in one hand of an American poker game. (Ord. 28517.)

"Proposition player" means an employee who, as part of his or her job duties, plays any permissible game with his or her own money. (Ord. 28517.)

"Registrant" shall mean an eligible nonprofit organization or person or entity that has been granted a valid registration by the administrator pursuant to Chapter 16.50 of this title. (Ord. 28517.)

"Regulation" means any regulation promulgated by the administrator pursuant to Title 16 of this Code. Unless the specific section indicates otherwise, "regulation" includes provisional and final regulations.

(Ord. 28517.)

"Regulatory action" means any or all of the following actions against either a cardroom permittee or a licensee: revocation, suspension for a period of time, monetary penalties, divestiture of stock, addition of restrictive terms, conditions and limitations on the cardroom permit or license, restitution to victims and payment of the city's costs of investigation and enforcement, issuance of a letter of reprimand or other disciplinary penalty. (Ord. 28517.)

"Reportable condition" means:

• A. Matters coming to the attention of the cardroom permittee's auditor or certified public accountant that are communicated to the cardroom permittee because they represent material deficiencies in internal control that could adversely affect the cardroom permittee's ability to record, process, summarize, and report financial data; or

• B. Matters coming to the attention of the cardroom permittee's auditor or certified public accountant that are communicated to the cardroom permittee that are defined as a reportable condition by the

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§ 16.04.030

applicable American Institute of Certified Public Accountants standards or by applicable state or federal law.

(Ord. 28517.)

• A. "State gambling law" means The Gambling Control Act, California Business and Professions Code Section 19800 et seq., the regulations promulgated thereunder either by the California Department of Justice or by the California Gambling Control Commission, and the actions, orders and decisions of the California Department of Justice and the California Gambling Control Commission, and the provisions of Chapter 10, Title IX, Part 1 of the California Penal Code beginning at Penal Code Section 330 et seq., pertaining to gaming.

• B. Any reference to California statutory law and regulations promulgated thereunder, including, but not limited to The Gambling Control Act, is deemed to include any successor or amended version of the referenced statutory or regulatory provision.

• (Ord. 28517.)

"Title" means Title 16 of this Code and any regulations promulgated hereunder, including, but not limited to internal control requirements. (Ord. 28517.)

"Vendor" means any person or entity that lends, lets, leases, sells, furnishes, or licenses any controlled game or gambling equipment to a cardroom permittee under any agreement or arrangement. (Ord. 28517.)