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General Information and History

Prior to 1998, California's gambling industry was essentially unregulated. In 1984, the Legislature enacted the "Gaming Registration Act," which required the Attorney General's office to provide uniform, minimum regulation of California's cardrooms. However, the scope of the Attorney General's authority was extremely limited and funding was inadequate. Recognizing the need for broader oversight of California's gambling industry, the Legislature enacted the "Gambling Control Act" (Act) (867, statutes of 1997). The Act (Business and Professions Code section 19800 et seq.) created a comprehensive scheme for statewide regulation of legal gambling.

The provisions of the Act are administered through a bifurcated system. The Division of Gambling Control (Division) was created within the Department of Justice to investigate the qualifications of persons (or use individual and entities) who apply for state gambling licenses, work permits, and registrations, and to monitor the conduct of these persons to ensure compliance with the Act. The Division's role includes reviewing and approving contracts between third party providers of proposition player and cardroom. Local law enforcement agencies maintain concurrent jurisdiction for investigating suspected violations of gambling laws. In addition, the Act created a five-member, Governor-appointed California Gambling Control Commission (Commission) to establish minimum regulatory standards for the gambling industry, and ensure that state gambling licenses are not issued to or held by unsuitable or unqualified individuals.

In March 2000, the voters of California passed Proposition 1A which amended the California Constitution to permit Class III (casino-style) gaming on Indian land, provided that such activities are authorized by a tribal ordinance and conducted in conformity with a gaming compact entered into between the Tribe and the State. The Tribe and the State share a joint interest in ensuring that tribal gaming activities are free from criminal and other undesirable elements. While the Tribe maintains the primary responsibility for on-site regulation of gaming operations, the State is ultimately responsible for ensuring compliance with all aspects of the compact.



DIVISION RESPONSIBILITIES

The Division's staff is comprised of managers, licensing analysts, investigative auditors, special agents, program technicians, information system technicians, and support staff. The Division's responsibilities fall into two general categories: licensing and compliance/enforcement.

The Division's Licensing staff are responsible for conducting in-depth background investigations on all Key Employee, State Gambling License, and Vendor applicants. Suitability is determined by a number of factors including the applicant's honesty, integrity, general character, reputation, habits, and financial and criminal history.

The Division is also responsible for tracking the identity, prior activities, and present location of all gambling enterprise employees, and ensuring that all gambling enterprise employees hold a valid work permit. Work permits may be issued by the local authority, or by the State in jurisdictions where a locally-issued work permit is not required.

Furthermore, the Division is responsible for reviewing and approving all contracts and player book forms for third-party providers of proposition player services. Each contract or qualifying amendment must be submitted to the Division for prior approval.

The Division's Compliance and Enforcement staff are responsible for monitoring the conduct of licensees to ensure that they are operating in compliance with the law. Agents and investigative auditors inspect premises where gambling is conducted; examine gambling equipment, audit papers, books, and records of the gambling establishment; investigate suspected violations of gambling laws; coordinate multi-jurisdictional investigations; investigate complaints lodged against licensees by the public; initiate disciplinary action where appropriate; and provide for the immediate preservation of the public's health, safety, and welfare. In addition, pursuant to its authority under existing Tribal-State compacts, the Division is responsible for recording and monitoring the transportation of all gaming devices, and ensuring all new slot machines meet established technical standards.

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