HomeMy WebLinkAboutItem 12 - Additional Information CITY COUNCIL
AGENDA STATEMENT
-�- -- CITY OF
E. CHULA VISTA
July 23,2019 File ID: 19-0337
'TITLE
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING AMENDMENTS TO THE CHULA VISTA GAMING PLAN
INCREASING THE MAXIMUM NUMBER OF TABLES FROM 20 TO 26,
INCREASING PER TABLE LICENSE FEES, MAKING RELATED CHANGES AND
UPDATES, AND APPROVING AN UPDATED FIVE-YEAR OPERATING
AGREEMENT
RRC MMEN ED ACTION
Council conduct the public hearing and adopt the resolution.
SUMMARY
In 2018 the Stones South Bay Corp, dba Seven Mile Casino approached the City requesting
amendments to the Gaming Plan and Operating Agreement governing their cardroom
operations. After several months of discussions, the parties reached an agreement. City staff
now recommends City Council approval of updates to these documents increasing the number
of allowed gaming tables from 20 to 26, increasing the number of people allowed to backline bet
from 16 people to 24, increasing the quarterly table fee from $7990 to $9,000 for fiscal year
2019/2020 and then to $9540 for fiscal year 2020/2021, including conversion to a percentage
rate formula upon the opening of the Bayfront resort hotel and a five-year operating agreement
with an automatic five year extension upon opening of the Bayfront resort hotel.
ENVIRONMENTAL REVIEW
The City Attorney's office has reviewed the proposed activity for compliance with the California
Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as
defined under Section 15378 of the State CEQA Guidelines because the activity consists of a
governmental administrative/fiscal activity which does not involve any commitment to any
specific project which may result in a potentially significant physical impact on the environment.
Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not
subject to CEQA. Thus, no environmental review is required. Notwithstanding the foregoing, it
has also been determined that the activity qualifies for an Exemption pursuant to Section
15061(b)(3) of the California Environmental Quality Act State Guidelines. Any required CEQA
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review would occur upon Seven Mile's application to the City for an amendment to their CUP.
OARD/ OMMIS alb: N/COl l l'T"l"1n°:E RECOMMENDATION
Not applicable.
DISCUSSION
Background
Cardrooms are one of California's oldest forms of legal gambling with operations ranging from
"mom and pop" storefronts, to larger, more sophisticated establishments. Historically, card clubs
were regulated by local governments. Beginning in the mid-1980s the State gradually increased
its regulatory oversight. The stated primary purpose of this increased oversight by the State was
to attempt to prevent criminal activity from being associated with these businesses.
In 1998, then Attorney General Daniel Lungren and Senate Pro Tem Bill Lockyer introduced and
passed the California Gambling Control Act. (SB 8 was enacted; the language is in Business
and Professions Code: 19800 - 19887.) The Act developed the California Gambling Control
Commission ("State Gambling Commission") and the Bureau of Gambling Control ("Bureau") in
the California Department of Justice. The State Gambling Commission and the Bureau are
responsible for the development of policy, regulatory oversight and enforcement of the States
gaming laws at California cardrooms.
With these changes, California cardrooms are now regulated at both the local and state levels.
Of the 80 or so cardrooms in California, the largest is the Commerce Club, located in the City of
Commerce, with approximately 240 tables. The largest cardroom in San Diego County is
Oceans 11 in Oceanside which is currently operating fifty (50) tables.
History of Chula Vista Gaming Plan
Prior to enactment of the City's Gaming Plan in 1995, cardroom operations were regulated by
way of City ordinance. The ordinance was amended by the City Council on six different
occasions between 1977 and 1995 for various reasons.
The Gaming Plan concept was introduced to the City Council on November 28, 1995, because
the City Attorney's Office determined that then pending state laws would have the effect of pre-
empting local control by City code. By creating a structure under the City code where future
changes would be adopted by resolution, the Gaming Plan preserved local Chula Vista authority
over its cardroom operations. This made it so that the City Council is authorized to adopt or
make amendments to the Chula Vista Gaming Plan by resolution after a public hearing. Under
this revised structure, the initial Gaming Plan was adopted in February 1996.
In 1998, the Gaming Plan was amended at the request of the City Council to eliminate the
issuance of additional licenses without a vote of the people. At the time, there were 4 total
licenses issued in the City. Two were held by the Chula Vista Bay Club, Inc., and two were held
by Harvey Souza. In 2000, the Gaming Plan was amended again, this time to eliminate 2 of the
outstanding 4 licenses and consolidate the remaining 2 licenses under Mr. Souza's ownership.
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This was accomplished by Mr. Souza acquiring 2 licenses from Chula Vista Bay Club, Inc., and
immediately turning them over to the City. Other updates at this time included: 1) expanding the
allowed hours of operation; 2) allowing more types of games to be played; 3) increasing bet
limits; 4) allowing the service of alcohol; 5) increasing license tax fees; and 6) enhancing
employee screening; 7) allowing backline betting and enhanced security requirements.
In 2009, consistent with state law changes, the maximum number of card tables allowed to
operate was increased in the Gaming Plan from 12 to 16.
In 2012, again consistent with state law changes, the maximum number of card tables was
increased in the Gaming Plan from 16 to 18.
In 2015, again consistent with state law changes, the maximum number of card tables was
increased in the Gaming Plan from 18 to 20. Other changes included an increase to 15 the
number of tables that could be operate as "Class II" or "Class IA" tables (allowing "back line"
betting and other "higher stakes" games). In consideration of this, the Village Cardroom agreed
to an increase in the quarterly license tax per table from the previous maximum of$5,000 up to
$7,100. These changes, and some others, were requested and granted in anticipation of the
Village Card Room moving its operations from 429 Broadway to a new establishment at 271 and
285 Bay Boulevard now known as the Seven Mile Casino. An Operating Agreement was also
entered into to implement the license tax increase in consideration of a 5-year "vesting" of
operations under then-applicable Gaming Plan regulations.
History of Village Club Card Room (now Seven Mile Casino) Ownership and Operations
The original Village Club card room operated at the Broadway location from 1946 until 2015.
Harvey Souza managed the business from 1963 to 2015. As a police-regulated business, the
Village Club Card Room operated by the Souza family had a solid track record of compliance
with City regulations and positive interaction with the Police Department.
In 2015, the Village Club Card Room moved its operations to a 20-table cardroom located at
271 and 285 Bay Boulevard, Chula Vista, California. The relocated business was renamed
"Seven Mile Casino".
On March 3, 2015, the City Council approved Resolution 2015-057, ratifying Chief Bejarano's
approval of Stone Chula Vista Holdings, LLC members "financial interests" in Village Club Card
Room's license after reviewing their applications and conducting background checks. The Stone
Chula Vista Holdings, LLC members were told they would need to re-apply for approval with the
Chief of Police if and when they proposed to exercise their option and obtain a direct interest in
the cardroom license.
In 2016, Stones Corp. exercised its option and entered into agreements to purchase 100 percent
of Seven Mile Casino from VC Inc., conditioned upon approval of the State Gambling
Commission and the City.
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In February 2017, the City Attorney's Office reviewed the transfer and ownership documents in
connection with this transaction and found no issues of concern in its review. The Police
Department reviewed and approved the Seven Mile Casino security plan, financial interests,
experience and expertise to operate a cardroom on accordance with state gaming laws and
approved of the transfer.
On March 23, 2017, the State Gambling Commission issued a Temporary State Gambling
License to Stones Corp. and approved the transfer of the interests in Seven Mile Casino from
VC Inc. to Stones Corp. The State Gambling Commission's approval was preceded by a
substantial due diligence review of the Stones Corp. principals including review of the various
financial and ownership interests of the principals and entities involved in the transfer, and
confirmation of compliance with the Business and Professions Code
Proposed Amendments to the Gaming Plan and Operating Agreement
In 2018 the Stone Corp. approached the City requesting amendments to the existing Gaming
Plan and Operating Agreement governing their cardroom operations on Bay Boulevard. After
several months of discussions between the parties the following are the proposed amendments
to the Gaming Plan and Operating Agreement that are being recommended by staff:
• Increase the number of allowed tables from 20 to 26;
• Increase the max number of players at the 15 allowed "backline" betting tables 16 to 24
people per table;
• Increase the per table charge from $7,758 dollars per quarter to $9,000 effective July 1,
2019 and $9,540 dollars per quarter beginning July 2020;
• Implement a percentage of gross revenue structure for license fees that would allow the
City to benefit from an increase in patrons to the casino upon the opening of the Bayfront
Resort and Convention Center.
o Percentage rate fees shall be paid in advance, quarterly, calculated using annual
gross revenues from the previous twelve months operating period.
o Each August a certified financial statement of gross revenues will be submitted to
the City for review and any necessary adjustments will be made through additional
payments or refunds.
o The City will be guaranteed a minimum payment of what it would have received
under the "per table" rates structure.
o In the event of law changes that materially limit the types of games allowed the
parties will meet and confer to negotiate appropriate license fee rate adjustments.
• Vested operating term to be for five years with the possibility of an automatic five-year
extension upon opening of the Bayfront resort hotel and convention center;
• The opening of the resort hotel would automatically extend Seven Mile's "vested rights"
under the Operating Agreement to operate the cardroom without changes to the Gaming
Plan.
The proposed Gaming Plan also includes a number of miscellaneous changes including (a)
reorganization of provisions for approval of license transfers; (b) updates to reflect changes in
applicable state laws and terminology; (c) practical changes to how table game rules are made
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available to patrons; and (d) other minor corrections and updates. The City Attorney's office and
the Police Department have reviewed and are comfortable of such changes. An
underline/strikeout version of the Gaming Plan is attached that highlights all proposed changes.
Staff has reviewed the Stones Corp. request and recommends that the City Council approve of
the amended Gaming Plan and related five-year Operating Agreement.
DECISION-MAKER CONFLICT
Staff has reviewed the Councilmember's real estate holdings within Chula Vista and has
determined that no property is within 500-foot of the project location. Staff is not independently
aware and has not been informed by any City Council member, of any other fact that may
constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City's Strategic Plan has five major goals: Operational Excellence, Economic Vitality,
Healthy Community, Strong and Secure Neighborhoods and a Connected Community. This
action supports the Economic Vitality goal as facilitates the continued operation and success of
the Seven Mile Casino under new ownership. The Seven Mile Casino employs approximately
305 people generating significant business activity and City revenues.
CURRENT YEAR FISCAL IMPACT
The estimated license tax revenue generated by Seven Mile Casino in fiscal year 2018-19 is
$620,669.60 or $7,758 per table. These funds are considered discretionary revenues and
support overall general fund services such as police, fire, libraries and recreation.
ONGOING FISCAL IMPACT
The increase in estimated license tax revenue will not be generated by Seven Mile Casino until
fiscal year 2020-21 and will generate approximately $992,160 dollars or $9540 per table which
represents about a 19.5% increase over fiscal year 2019/20 revenues. These funds will be
included in the City Manager proposed 2020-21 budget and are considered discretionary
revenues and support overall general fund services such as police, fire, libraries and recreation.
ATTACHMENTS
1. Gaming Plan
2. Operations Plan
Staff Contact: Eric Crockett, Economic Development Director, Roxanna Kennedy, Chief of
Police, Glen Googins, City Attorney
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING AMENDMENTS TO THE CHULA VISTA GAMING PLAN
INCREASING THE MAXIMUM NUMBER OF TABLES FROM 20 TO 26,
INCREASING PER TABLE LICENSE FEES, MAKING RELATED CHANGES
AND UPDATES, AND APPROVING AN UPDATED FIVE YEAR
OPERATING AGREEMENT
WHEREAS, Stones South Bay Corporation, a California Corporation dba: Seven Mile
Casino ("Seven Mile")has proposed amendments to the City's Gaming Plan and related Operating
Agreement;
WHEREAS, the proposed changes would (1) increase the maximum number of allowed
tables from 20 to 26, (2) increase the allowed number of players at the 15 tables allowing back-
line betting from 16 to 24;
WHEREAS, in consideration for this, Seven Mile and City staff negotiated an increase in
the table license fees to a set rate of$9,000 per table per quarter effective July 1, 2019 and $9,540
per table per quarter beginning July 1, 2020, with annual increases thereafter of 3%;
WHEREAS, in addition, the parties agree that upon the opening of the RIDA Bayfront
resort hotel the per table rate would convert to a "percentage rate structure" with a guaranteed
minimum payment and a five year extension to the Operating Agreement;
WHEREAS,the Police Department has no other material concerns with security issues that
might arise from the proposed changes to the Gaming Plan;
WHEREAS, as required by Chula Vista Municipal Code Section 5.20.001 and Gaming
Plan Section 5.3, prior to City Council action on the proposed Gaming Plan amendments a public
hearing was properly noticed and held, and the City Council considered the proposed amendment
and al I testimony presented with respect thereto;
WHEREAS, the City Attorney's office has reviewed the proposed activity for compliance
with the California Environmental Quality Act(CEQA) and has determined that the activity is not
a "Project" as defined under Section 15378 of the State CEQA Guidelines because the activity
consists of a governmental administrative/fiscal activity which does not involve any commitment
to any specific project which may result in a potentially significant physical impact on the
environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the
activity is not subject to CEQA. Thus, no environmental review is required. It has also been
determined that the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the
California Environmental Quality Act State Guidelines. Any required CEQA review would be
conducted if and when Seven Mile applies for an amendment to its CUP.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Chula Vista
as follows:
1. The proposed amendments to the Chula Vista Gaming Plan attached to this
resolution, with changes presented in underline strikeout format, are hereby adopted, with such
minor changes as may be required or approved by the City Attorney, a copy of which shall be kept
on file with the City Clerk.
2. The City Manager is hereby authorized and directed,pursuant to Section 5.5 of the
Gaming Plan to finalize and execute on behalf of the City an operating agreement with the Seven
Mile license interest holders, in the form presented with such minor changes as may be required
or approved by the City Attorney.
3. Seven Mile's rights under the amended Gaming Plan for cardroom operations under
its license are contingent upon receiving any and all required approvals therefor from the California
Department of Justice Division of Gambling Control and any and all required City land use
approvals;
Presented by Approved as to form by
Eric C. Crockett Glen R. Googins
Director of Economic Development City Attorney
CHULA VISTA GAMING PLAN
[Adopted July 23, 2019]
In accordance with Chapter 5.20 of the Chula Vista Municipal Code (the
"Gaming Code"), this document shall serve as the gaming plan for the operation
of Cardrooms within the City of Chula Vista (the "Gaming Plan"). This Gaming
Plan was originally adopted on February 13, 1996, after a public hearing, pursuant
to city council Resolution No. 18212. The Gaming Plan has been amended as
follows: (1) on January 13, 1998 pursuant to Resolution No. 18862; (2) on
November 10, 1998 pursuant to Resolution No. 19251; (3) on September 26, 2000,
pursuant to Resolution No. 2000-332; (4) on October 6, 2009, pursuant to Resolution
No. 2009-238; (5) on March 14, 2012, pursuant to Resolution No. 2012-047; (6) on
March 3, 2015, pursuant to Resolution No. 2015-056, and, (7) on April 11, 2017,
pursuant to Resolution No. 2017-0128. The modifications contained in such
amendments shall be deemed effective as of the dates of their adoption.
Effective upon its adoption, this Gaming Plan implements, in its entirety,
Subchapter 2 of the Gaming Code relating to Cardrooms. Pursuant to
Subchapter 1, Section 5.20.004, of the Gaming Code any inconsistency between
the Gaming Code and the Gaming Plan shall be governed by the provisions of
the Gaming Plan. Except to the extent that this Gaming Plan expressly modifies or
is otherwise inconsistent with the Gaming Code, the Gaming Code shall remain in
full force and effect.
This Gaming Plan is intended to deal only with the subject of Cardrooms.
No other types of gaming permitted by the Gaming Code, shall be governed
hereby. To be permitted, such other types of gaming must be the subject of
further action by resolution of the City Council to amend or add to this Gaming
Plan.
This version of the Gaming Plan is adopted and effective as of July 23,
2019, pursuant to City Council Resolution No.
CARDROOMS
1. Cardroom Defined.
For the purpose of this Gaming Plan, a "cardroom" is defined to be any
space, room, or enclosure furnished or equipped with a table or tables used or
intended to be used, either exclusively or in conjunction with another business or
activity, as a card table for the playing of cards and similar games, and the use of
which is available to the public.
2. Licensing.
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2.1 License Required to Operate Cardroom - Individual Licensees Must
be 21 Years or Older.
A license from the City issued pursuant to this Gaming Plan, is required for
any person, group of persons, partnership, corporation, or any other entity or
organization (each a "Person" hereinafter) to engage in or carry on, or to
maintain or conduct, or cause to be engaged in, carried on, maintained or
conducted, any cardroom in the City. Any such activity conducted without such
a license, or otherwise in non-compliance with the terms of this Gaming Plan, the
Gaming Code, or any and all other applicable federal, state and local laws and
regulations shall be unlawful. No license shall be issued to any individual Person
under the age of twenty-one years.
2.2 Number of Licenses Permitted - Existing Licenses.
The number of licenses authorized to be issued or held, in the aggregate,
under the provisions of this Gaming Plan shall be limited, based upon the
population of the City according to the certified determination thereof by the
state department of finance. All such licenses shall be issued and held in
accordance with the provisions of this Gaming Plan; provided, however, any
Person holding a license or licenses to conduct cardroom operation upon the
effective date of this Gaming Plan may continue to hold such license or licenses
subject to the terms and conditions set forth herein. For purposes of determining
the number of licenses which are authorized to be issued by the City hereunder,
any two licenses which are "consolidated" pursuant to Section 2.6 hereof shall still
be treated as being two separate licenses counted against the total number
authorized understate law, and shall be entitled to all rights, benefits, and
restrictions as if the licenses were held separately, both under state law and the
terms of this Gaming Plan.
2.3 Two Types of Gaming Classifications.
2.3.1 In General. There shall be two types of cardroom licenses:
Category I and Category 11. The characteristics, rights, obligations and limitations
attributable, respectively, to a Category I or Category II licenses are set forth
throughout this Gaming Plan. Subject to all such provisions, in general,
(a) a Category I license shall permit the playing of all games
available for licensure through the Office of the Attorney General, except games
involving "back-line" betting; and
(b) a Category II license shall permit the playing of all games
permitted under a Category I license and shall also permit games involving back-
line betting. "Back-line" betting card games are card games which allow a
player not seated at a cardroom table, but standing adjacent to the table, to bet
on a hand being played by a player seated at that table. Subject to state and
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local law, multiple "back-line" betters may be allowed to participate in any one
game.
2.3.2 All licenses issued by the City shall initially be Category I
licenses. In order to obtain a Category II license, the applicant (a) must have
continuously operated a cardroom that plays Category I games for a period of
three (3) years; and (b) must apply with the City and receive prior approval from
the City for such conversion in accordance with the application procedures set
forth in Section 2.4 hereof, below.
2.4 Application/Issuance Procedure.
2.4.1 In General. Any Person desiring a cardroom license must
submit an application to the chief of police. The application shall be on a form
issued by, or otherwise approved in advance by, the chief of police. Such
application shall include, in addition to any other information required by the
chief of police, (a) the true names and addresses of any and all Persons currently,
or contemplated to have a "financial interest" in the cardroom operation
proposed to be licensed; (b) the past criminal record, if any, of any and all such
Persons; (c) the fingerprints of any and all such Persons; (d) the proposed location
of the cardroom; and (e) a non-refundable fee, as presently designated, or as
may in the future be amended, in the Master Fee Schedule, to cover the cost of
processing the application and of any required investigation of the applicant.
Upon the issuance of a cardroom license, the chief of police may authorize the
refund of the investigation portion of the application fee to any Persons who were
not subject to investigations.
2.4.2 Approval Required. Any and all proposed cardroom
licensees must receive (a) prior written approval of the chief of police, which
approval may be withheld in the sole discretion of the chief of police, (b)
approval by the State of California Division of Gambling Control; and (c) the
ratification of the City Council, which ratification may be withheld in the sole
discretion of the City Council. Such approval and/or ratification may be
conditioned as the acting parties deem appropriate, and may be based, but is
not required to be based, entirely or in part on the assessment by the chief of
police or, as applicable, the City Council, of the character of the proposed
licensee, or on the opinion of the approving or ratifying entity, that there appears
to be good cause why such Person should or should not operate a cardroom.
Notwithstanding the foregoing in the event of a transfer directly caused by the
death or divorce of a Person holding a financial interest in a license, the "prior
approval" requirement, above, shall be amended to require that approval of the
resulting transferee be obtained by no later than sixty (60) days following the
death or divorce causing such transfer. The time limit may be extended provided
the resulting transferee has submitted its application and such additional
information as may have been requested with the licensing authorities in a timely
fashion.
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2.4.3 For purposes of this Section 2.4 and the Gaming Plan, the term
"financial interest" shall mean any and all direct or indirect ownership, creditor or
other interests, in a cardroom license, the cardroom business operated
thereunder, the assets thereof, or the revenues generated thereby.
2.4.3.1 Such an interest shall include, without limitation, any
and all interests held by building owners, landlords, tenants, equipment or fixtures
owners, lessors or lessees, creditors, lenders or guarantors related in any way to the
ownership, financing or operation of the cardroom; and (b) a parent, spouse,
sibling or child of an individual Person holding a direct, majority or controlling
ownership interest in a license or cardroom shall also be deemed the holder of a
"financial interest" for purposes of this Section and this Gaming Plan.
2.4.3.2 The City shall decide, in its sole discretion, whether a
particular circumstance or transaction falls within the scope of the definition of a
"financial interest" that requires submission of an application to the chief of police
and approval by the Council for separate licensure.
2.4.4 Any new or revoked cardroom license otherwise qualified for
issuance may be issued during the period of May 1 through June 30 following the
availability or revocation date of such a license. After the expiration of this period
no further licenses shall be issued until the following May 1 through June 30 period.
In the event that there are applications in excess of the number of licenses
available in accordance with the limitations set forth in Section 2.2 hereof, a
license may be issued to the most qualified of such applicants in accordance
with a procedure established by the City. Notwithstanding the foregoing, the City
shall decide, in its sole discretion, as to whether to issue any cardroom license
authorized hereunder, and whether or how to condition such an issuance;
furthermore, the City reserves the right, for any reason whatsoever, to reject any
and all applications for a cardroom license hereunder.
2.5 Transfers.
2.5.1 In General. Any license issued pursuant to this Gaming Plan, a
cardroom operated thereunder, or any direct or indirect interest therein, may only
be transferred in accordance with the terms and conditions of this Section 2.5.
Transfers governed by this section shall include,without limitation, any and all
sales, leases, conveyances, assignments, grants, pledges, gifts, devises, donations
and/or similar transfers by a Person of any or all of such Persons, direct or indirect,
ownership interest in a license or cardroom operated thereunder, or "financial
interest" in a license or cardroom operated thereunder, as such concept is
defined in Section 2.4.3 hereof.
2.5.1 .1 Such transfers shall include, without limitation, (a) a
transfer of all or any shares by a shareholder in a corporate licensee, (b) the
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transfer of all or any partnership interest by a partner in a partnership licensee;
(c) the transfer of all or any portion of a controlling shareholder or partnership
interest in an entity which itself holds a direct or indirect ownership or financial
interest in a license or cardroom; and (d) a transfer of a substantial portion of the
assets of a Person holding a license or a cardroom operated thereunder.
2.5.1 .2 Such transfers shall not include (a) corporate
structure reorganization where the individuals involved in the ownership and their
respective percentage interests do not change; (b) transfer of ownership interest
for estate planning purposes where the trustee is the same as the current licensed
owner; or (c) such other situation that is similar to those described above that the
City deems to be immaterial.
2.5.2 Application Required. Any applicant seeking a license
transfer must comply with all of the application and approval requirements set
forth in Section 2.4.
2.5.4 Three Years Operation Required Before Transfer. With the
exception of those licenses which have been issued prior to September 1, 1992,
no license may be transferred unless and until the holder thereof has been
operating a cardroom governed by such license for three (3) years at a fixed
location in the City. Licenses issued prior to September 1, 1992 may not be
transferred unless and until the holder thereof has been operating a cardroom
governed by such license for one (1 ) year at a fixed location within the City.
2.5.5 Non-Complying Transfers. In the event of a purported transfer
of a license that does not comply with the terms of this Section, the purported
transferor shall be subject to monetary penalties as provided in Section 4.2 hereof.
The purported transferee shall have no rights to operate a cardroom in the City
under the authority of such license. The license involved shall be subject to
revocation by the City as provided in Section 4.3 hereof; and (d) the transfer may
otherwise be declared null and void.
2.5.6 Special Rules for Transfers of Category II Licenses.
2.5.6.1 Except as otherwise provided herein, upon the
transfer, either all at once or in a series of transfers, of a "material or controlling
financial interest" (define below) in a Category II license, the Category II license,
which is the subject of such transfer, shall immediately revert back to a Category I
license. A Category II license so reverted may be converted back to a Category
II license, but only in accordance with the provisions of Section 2.3.2 hereof.
2.5.6.2 Notwithstanding the foregoing, a material or
controlling interest in a Category 11 license may be transferred without reversion of
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the subject Category II license to Category I status subject to the following terms
and conditions:
(a) The transfer must be to a "pre-qualified
transferee". For purposes of this Section, a "pre-qualified transferee" shall be
defined as a Person on record with the chief of police as a Person holding a
financial interest in the license, which, with the prior knowledge of the chief of
police, acknowledged in writing thereby, has been substantially responsible for
the management and operations of a licensed cardroom continuously for a
period of three (3) years.
(b) In addition to the agreement required pursuant to
Section 5.5 hereof, any pre-qualified transferee shall enter into a written
agreement with the City whereby such Person, on behalf of itself, any successors
or assigns thereof, and any and all parties with a financial interest in the license or
the cardroom operated thereunder, agrees that (a) the Category II status of the
license to be transferred thereto shall be temporary and subject to reversion to
Category I status in accordance with this Section; and (b) any action taken by the
City to revert the Category 11 license to a Category I license shall not constitute a
taking of any property or other interest held by such Person(s), and (c) such
Person(s) waive and agree not to pursue any and all claims or other action
against the City in connection with a City decision to revert the Category II license
to a Category I license.
(c) Until such time that Category 11 Games have been
operated continuously by the pre-qualified transferee for a period of one (1) year
following the effective date of the transfer of the Category 11 license, or such
longer period as the Category II license, or such longer period as the chief of
police may require (the "Temporary Category II Status Period"), the Category II
statues of the license shall be temporary, and therefore subject to reversion to a
Category I license upon a determination by the chief of police, in his/her sole
discretion, for any or no reason whatsoever, that the transferee should be required
to first operate as a Category I licensee prior to being permitted to operate as a
Category 11 licensee in accordance with the terms and conditions of Section 2.3.2
hereof. Such determination may be made at any time within thirty (30) days after
the expiration of the Temporary Category II Status Period.
(d) Pre-qualification of a potential transferee
hereunder shall not constitute City approval of a transfer to such potential
transferee and any such transfer shall remain subject to the provisions of Section
2.5 hereof.
2.5.6.3 For purposes of this Section, the City shall determine,
in its sole discretion, what constitutes a "material or controlling financial interest"
provided; however, in general, a transfer of a financial interest for purposes of pre-
p
qualifying a Person under Section 2.5.6.2 shall not be considered the transfer of a
"material or controlling financial interest".
2.5.7. Except as otherwise provided herein, upon the transfer, either
all at once or in a series of transfers, of a material or controlling financial interest in
a license or the cardroom operated thereunder, the holder of the license, which is
the subject of such transfer shall be considered to be new holder of such license
subject to any and all provisions hereunder applicable thereto.
2.5.8. Full Cost Recovery for Administrative Costs Associated with
Transfer. Any person submitting an application for transfer of a license shall be
responsible for payment to the City of all actual administrative costs incurred by
the City including the cost of staff time, at the City's full cost recovery rate,
associated with the investigation of the application for a license transfer and
review of transfer documents. The chief of police shall estimate the cost of City
staff and other administrative costs in connection with an application and the
Person shall deposit such amount at the time of submitting the application for
license transfer to the chief of police. If actual costs incurred exceed the initial
deposit the chief of police may require the applicant to make additional deposits
to offset costs incurred or to be incurred by the City. If the amount estimated is in
excess of the cost incurred, the difference will be refunded to the applicant at the
end of the City's review.
2.6 Consolidation.
2.6.1 In General. Notwithstanding any other section of this Gaming
Plan to the contrary, the holder of a Category I or Category II license may
acquire one, but only one, additional Category I or Category II license, subject to
the consolidation rules and procedures of this Section 2.6. Under no
circumstances may any Person acquire or hold more than two City licenses.
2.6.2 Required Qualifications/Procedures. In order to acquire an
additional license, an existing license holder (a) must have continuously operated
a cardroom under its existing license within the City for a period of three (3) years
at a fixed location; and (b) must apply with the City and receive prior written
approval from the City for such acquisition in accordance with the rules and
procedures set forth in Section 2.4 hereof regarding the initial issuance of licenses.
If the additional license is to be acquired from another existing license holder,
such application shall also be made in accordance with the rules and
procedures governing license transfers set forth in Section 2.5.3 hereof.
2.6.3 Effect of Consolidation; Deemed Consolidation. If an
application for the acquisition of an additional license is granted, the two licenses
held by the applicant shall become "consolidated". In addition, licenses shall be
deemed to be "consolidated" in the event that the some Person holds, or comes
to hold, a "financial interest" (as defined in Section 2.4.3 thereof) in such licenses
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or the cardrooms operated thereunder. Under a consolidated license, the
maximum number of tables permitted to be operated is twenty-six (26), subject to
any additional or contrary terms and conditions set forth in Section 3.5 and/or
other provisions of this Gaming Plan. All tables operated under a consolidated
license must be operated in the same location.
2.6.4 Category I with Category II Consolidations. In the event that
a Category I license is consolidated with a Category II license, the following rules
shall apply: (a) if the previous owner of the Category 11 License retains majority
ownership and control over the consolidated license, the full benefits and burdens
hereunder of Category II status shall apply to all the card tables operated under
such consolidated license (b) if the previous owners of the Category I License
retains majority ownership and control over the consolidated license, the
consolidated license shall retain Category I status and the requirements for
conversion to a Category 11 License under Section 2.3.2 of this Gaming Plan shall
continue to apply.
2.7 License Fee.
2.7.1 In General. There shall be a license fee on any licensed
cardroom within the City in accordance with the terms of this Section 2.7. The
license fee is for purposes of generating revenues to the general fund of the City
and not for purposes of regulation. The fee shall be based upon the number of
tables that are licensed by the City pursuant to the terms of this Gaming Plan that
are also permitted to be operated by the City at the location where the license is
being utilized pursuant to the City's land use laws and regulations. The fee shall
be based upon the maximum number of tables so licensed and permitted based
upon the category of license issued with respect thereto, regardless of the
number of tables that may actually be operated on any given day or the
category of game conducted thereon. Notwithstanding the foregoing, if the City
approves new tables, but State approval is required before the operation of any
such new tables, the license fee set forth below in sections 2.7.2 through 2.7.6,
inclusive, with respect to such new tables, shall not go into effect until the date the
required State approval is obtained.
2.7.2 Amount of Fee. The license fee to be assessed and collected
on each licensed cardroom shall be the applicable "base rate" fee determined
as follows:
2.7.2.1 Base Rate:
a. Category I: Effective July 1, 2019 the base license fee for
card tables licensed under a single, non-consolidated Category I license shall be
$3,750 per card table per quarter.
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b. Category II: Effective July 1, 2019 through June 30, 2020,
the base license fee for each card table in a cardroom licensed to play Category
II games under a Category II license shall be $9,000 per table per annual quarter.
Effective July 1, 2020 through June 30, 2021, the base license fee for each card
table in a cardroom licensed to play Category II games under a Category II
license shall be $9,540. This rate shall apply to the maximum number of tables
licensed and approved to be operated at the cardroom location regardless of
whether or not such tables are actively being used, and regardless of whether or
not Category II games are actually being played at such tables.
c. Percentage Payment Structure The base rate license fee
for operation of any tables licensed by the City to the cardroom as set forth in this
Gaming Plan may be converted to a license fee based upon a percentage of
gross revenue generated by Licensee from the play of any game or gaming
activity ("Percentage Payment Structure"). Unless otherwise specified in an
amendment to the Gaming Plan, the timing of any conversion to and the specific
terms of any Percentage Payment Structure shall be set forth the agreement
between the parties required pursuant to Section 5.5 hereof.
2.7.3 Procedures for Payment of Fee.
2.7.3.1 Advance Payment. The license fee provided
hereunder shall be payable quarterly in advance by no later than the day falling
fifteen (15) days prior to the first day of each calendar quarter.
2.7.4 Audit rights. The City shall have the right to conduct an
independent audit of licensee's accounting records at any time upon three (3)
days prior written notice to licensee. The audit shall be performed by a party
designated by the City, subject to the reasonable approval of licensee. If the City
elects to conduct such an audit, the licensee shall be responsible for reimbursing
City costs incurred in connection therewith. The licensee's reimbursement
obligation under this Section shall not exceed $10,000.00 per any twelve (12)
month period.
2.7.5 Fee Receipt. The finance director shall issue a receipt for
each licensed cardroom and such receipt shall be displayed on the premises
during the full term for which such receipt was issued.
2.7.6 Annual Increase in Base License Fee Rate. The base rate
license fee amounts set forth in Section 2.7 shall be increased by three percent
(3%) per year. The first increase shall take effect on July 1, 2021 and each
subsequent increase shall take effect on each July 1 thereafter. This annual base
rate increase shall apply to all tables licensed and approved in the previous year
regardless of whether or not such tables were put into service that year.
Notwithstanding the above, if the Percentage Payment Structure becomes the
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basis to calculate the base rate license fee, then the terms of increase in such fee
shall be governed by the agreement entered into pursuant to Section 5.5 hereof.
3. Operating Limitations and Conditions.
3.1 City Land Use Regulations Shall Control.
All cardrooms and card table operations shall be subject to the City's land
use regulations. Notwithstanding any provision in this Gaming Plan to the contrary,
no cardroom operations shall be permitted without the prior acquisition of any
and all necessary approvals and permits from the City in connection therewith,
and any cardroom operation with such approvals and permits shall operate in
strict compliance with any and all terms and conditions thereof. For example, in
no event shall the cardroom exceed the number of players it is restricted to in its
conditional use permit based on parking limits or other imposed conditions.
3.2 Games Permitted.
3.2.1 Category I License: Subject to the terms and conditions of this
Gaming Plan and the Gaming Code, the holder of a Category I cardroom
license shall be permitted to operate a cardroom that conducts all card games
that have been determined by the Office of the Attorney General of the State of
California ("Attorney General") to be within the permissible subject of local
licensing by California cities, excluding those games involving "backline betting."
The games permitted under this section shall be referred to herein from time to
time as "Category I Games."
3.2.2 Category II License: Subject to the terms and conditions of
this Gaming Plan and the Gaming Code, the holder of a Category II cardroom
license shall be permitted to operate a cardroom which conducts all card games
permitted by a Category I license (as described in Section 3.2.1, above,), plus
those card games which involve backline betting. Such games shall be referred
to herein from time to time as "Category 11 Games." For purposes of this Gaming
Plan, back-line betting may be conducted, as that term is understood pursuant to
Business and Professions Code Section 19843. If the Office of the Attorney
General authorizes a new game that would fall within Category I but has not
previously been played in the City, then the Licensee will simultaneously send the
chief of police a copy of the application request for game approval submitted to
the Office of the Attorney General. The chief of police shall provide notice within
30 days whether it would like to further review the game before it is played at the
cardroom. The chief of police shall have the right to approve or disapprove any
proposed new games in his/her sole discretion, and such decision shall be final. If
no notice is provided, it is assumed that the game is approved to be played in the
City.
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3.3 Game Rules. Except as specifically provided in this Gaming
Plan, all rules for games played at a cardroom shall be governed by State law
and the California Bureau of Gambling Control (the "CBGC"), the California
Gambling Control Commission (the "CGCC"), or their successor entities
(collectively "State Agencies"). Rules for every game allowed shall be made
readily available to players and prospective players as follows: (1 ) in one or more
binders within the cardroom; (2) on the cardroom's official website (if any); and
(3) in printed fliers. In addition, each table shall identify the game currently being
played using a prominently placed sign at said table. . A generic game name is
permissible for the table sign (i.e., California Blackjack, Pai Gow Poker, Ultimate
Texas Hold'Em, etc.).
3.4 Hours and Days of Operation.
Licensed cardrooms may operate seven days per week, twenty-four
hours per day subject to any and all land use conditions imposed by the City with
respect to a specific site of operation.
3.5 Maximum Number of Tables.
Subject to such limitations as may be imposed by local land use
conditions, to a specific site of operation, the maximum number of tables that
may be operated under a cardroom license are as follows
3.5.1 Category I - Non-Consolidated. The maximum number of
tables that may be operated under a single, non-consolidated Category I license
shall be sixteen (16).
3.5.2 Category I - Consolidated. The maximum number of tables
permitted under a consolidated Category I license shall be twenty-six (26) during
gaming operations.
3.5.3 Category II - Non-Consolidated. The maximum number of
tables that may be operated under a non-consolidated Category 11 license shall
be sixteen (16).
3.5.4 Category II - Consolidated. The maximum number of tables
that may be operated under a consolidated Category 11 license shall be twenty-
six (26). In no event shall more than fifteen (15) of such twenty-six (26) tables be
operated with "backline" betting games at one time.
3.6 Maximum Number of Players Per Table.
Subject to such limitations as may be imposed by local land use
conditions, to a specific site of operation, the maximum number of players
permitted at any one cardroom table are as follows
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3.6.1 Category I Tables. No more than ten (10) players shall be
permitted at any one card table conducting Category I games. Only persons
seated at the card table as players shall be permitted to bet.
3.6.2 Category II. No more than eight (8) seated players with no
more than two additional standing players per seat participating in "backline"
betting behind the seated player (for a total number of twenty (24) players
(standing and sitting) per table) shall be permitted at any one card table
conducting Category 11 games.
3.7 Maximum Limits and Bets.
3.7.1 In General. Maximum limits and wagers shall be based on the
approvals from the State Agencies. Maximum limit and wager approvals will be
provided to the Chief of Police prior to implementation.
3.7.3 Adequate Financing on Hand/Payment Policy. At all times,
licensee must have sufficient proceeds to reimburse any and all demands made
upon said licensee for the payment of all monies that patrons have on deposit
with that cardroom . In the alternative, and subject to notification to the Chief of
Police, said licensee may have a written policy for full payment of all monies that
patrons have on deposit with that cardroom to a cardroom patron clearly posted
in a place visible to cardroom patrons.
3.8 Maximum House Charges Per Hand - - Posting Required.
3.8.1 . Approval. All house collection rates will be approved by the
State Agencies and notification will be given to the Chief of Police prior to being
imposed.
3.8.2 Posting Required. A copy of all collection rate schedules shall
be provided to the Chief of Police. The collection rate in use shall be clearly
posted at the table.
3.9 Work Permits and Identification Badges Required For Employees.
3.9.1 Work Permit Required. Unless other provided herein, prior to
commencing work at a cardroom, each proposed employee of a cardroom, if
such Person is other than the Person or Persons whose names appear on the
application for the cardroom license, must obtain a work permit from the Chief of
Police. Additionally, any employee of any ancillary business (Third Party Providers
of Proposition Player Services, massage therapists, etc.) that is operating at the
cardroom location must also obtain a work permit.
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3.9.2 Temporary Probationary Work Permit. Temporary
probationary work permits may be summarily issued upon payment of the
requisite application fee for food and beverage servers,janitorial staff, and
kitchen workers pending the issuance of a regular annual work permit. Such
temporary probationary work permits may be subject to immediate summary
revocation with or without cause by the chief of police and shall not be valid for
more than thirty (30) days and shall automatically expire upon issuance of the
regular annual work permit or upon denial of the regular annual work permit
application by the chief of police. The fee for temporary probationary work
permit shall be non-refundable and in addition to the fee for the regular annual
work permit application.
3.9.3 Application Process. Each proposed employee shall submit
an application for the required work permit to the Chief of Police. Such
application shall be on a form issued by, or otherwise approved in advance by,
the Chief of Police. Such application shall include, in addition to any other
information required by the chief of police, (a) the past criminal record, if any, of
such Person; (b) the fingerprints of such Person; and (c) a non-refundable fee, as
presently designated, or as may in the future be amended, in the Master Fee
Schedule for cardroom applications, to cover the cost of processing the
application and of any required investigation of the applicant including a
criminal background check to be performed by the police department at the
applicant's expense. The work permit, when issued, shall be valid for one (1) year.
Any renewal must also be approved by the chief of police and will be subject to
a criminal background check to be performed by the chief of police at the
applicant's expense. The chief of police may deny the initial approval or renewal
of a work permit if, in the chief of police's opinion, (1) in the case of a proposed
key employee the applicant therefore should not be permitted to act as key
employee or employee in lieu of management by the licensee of the cardroom;
and (2) in the case of a proposed employee the applicant therefore should not
be permitted to be employed in a cardroom.
3.9.4 Identification badges to be worn. Every employee shall, at all
times when present in such cardrooms, wear an identification badge containing
such Person's photograph, first name and the police department issued
employee identification number. The identification badges shall be worn at chest
level.
3.9.5 Limitation of Discretion to Issue Work Permit. In addition to
any other restrictions provided by law, no work permit shall be issued to any other
restrictions provided by law, no work permit shall be issued to anyone who is
disqualified from holding a state gambling license, for any of the reasons
specified in California Business and Professions Code Section 19850.
3.9.6 Denial of an application for a Work Permit. Any application
for a work permit shall be subject to objection by the State of California Bureau of
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Gambling Control (hereafter Bureau). If the Bureau objects to the issuance of a
work permit it shall be denied. Such a denial may be reviewed in accordance
with the Gambling Control Act (Business and Professions Code Section 19801 et
seq.).
3.9.8 Proposition Players.
3.9.8.1 A licensee shall use only employees or properly
licensed independent contractors as proposition players.
3.9.8.2 A licensee shall not allow, permit, or suffer more than
four (4) proposition players to play at a card table at any given time, subject to
modification by the chief of police in his/her sole discretion.
3.9.8.3 The licensee shall not provide any compensation,
reward, credit, chips, or any other thing of value or representation of value to an
employee who acts as a proposition player other than drop reimbursement,
salary or wages earned for the time the employee works as a proposition player.
This prohibition does not prohibit a proposition player from receiving the same
employment benefits as apply to all other employees of the licensee; provided
that no employee or independent contractor shall be paid in chips.
3.9.8.4 A proposition player shall prominently display an
identification badge pursuant to Section 3.9.3 at all times while present on the
cardroom premises.
3.10 Intoxicating Beverages.
3.10.1 Intoxicating Beverages Permitted. Upon application to and
approval by the chief of police, in his/her sole discretion and control and pursuant
to a procedure to be implemented and administered by the chief, alcoholic
beverages may be served and consumed in a cardroom from the hours of 6:00
A.M. to 2:00 AM. At all times that alcoholic beverages are served, food must also
be made available and the cardroom shall comply with its ABC On-Site General
Sale (Type 47) Eating Place license,where 50 percent or more of all sales must be
food. The chief of police's decision concerning the consumption and service of
intoxicating beverages shall be final. Additionally, licensee shall comply with all
applicable state and local laws, rules and regulations, including the City's land
use regulations, pertaining to the sale and service of intoxicating beverages. All
servers are required to have a valid Responsible Beverage Service ("RBS")
certification from an ABC accredited RBS training provider.
3.10.2 Key Employee/employee Consumption Prohibited. The
drinking of any intoxicating beverage by any key employee, independent
contractor or employee of a card room while on duty is prohibited. The licensee
of a cardroom shall take all necessary and appropriate steps to assure
compliance with this section.
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3.10.3 Permitting Intoxicated Persons to Play in Games Prohibited.
No licensee, key employee, independent contractor or employee shall permit
any Person to play in any game or at any time which such Person is under the
influence of an intoxicating beverage, narcotic, or drug.
3.10.4 Permitting Intoxicated Persons on Premises Prohibited. No
licensee, key employee, independent contractor or employee shall permit any
Person to enter a gambling establishment at any time when such Person appears
to be under the influence of an intoxicating beverage, narcotic or drug.
3.11 Minors Prohibited from patronage or Employment.
No person under twenty-one years of age shall be employed at a
cardroom, allowed to play games at a cardroom, or permitted in a cardroom
area where games are being played. Minors may be allowed in non-gaming
areas of a cardroom (for example, in an associated restaurant) but only with the
prior approval of the chief of police, of a written plan containing provisions that
assure that no minor shall have no access to gaming areas or alcohol. Given the
high level of concern with public safety, the Police Chief's approval of any plan
allowing minor access to non-gaming areas shall be in his/her sole discretion and
the Chief's decision shall be final.
3.12 Signs to be Posted.
Licensee shall comply at all times with the sign requirements set forth
in this Gaming Plan including,without limitation, Sections3.3, and 3.8.2 hereof, and
any and all other signage or posting requirements contained in applicable
federal, state or local laws, rules and regulations.
3.15 Licensee Responsible for Compliance and Supervision of
Operations.
The licensee of a cardroom shall be responsible for assuring that any
cardroom operated under such license is operated in strict compliance with the
terms of this Gaming Plan, the provisions of the Penal Code of the State of
California and any and all other applicable federal, state, and local laws, rules,
regulations, or permits. All cardrooms and/or card tables shall be supervised by
the operator or an employee of the operator of the cardroom, to assure such
compliance. Any violation of the cardroom operating limitations and conditions
in this Section 3, or elsewhere in the Gaming Plan, whether or not caused by the
licensee or any employee thereof, shall be considered a violation by the licensee
of the terms and conditions of its license, and therefore subject to the City's
enforcement rights and policies set forth in Section 4 hereof.
3.16 Patron Safety and Security.
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3.16.1 Each licensee shall submit a written patron safety and
security plan, designed to protect patrons and other persons who are lawfully on
the premises of the permitted cardroom, to the chief of police for his/her
approval prior to opening for operations.
3.16.2 The chief of police, in his/her sole discretion and control, shall
have the right to require amendments to the patron safety and security plan that
are, in his or her judgment, reasonably necessary to protect the public peace,
health, safety, and general welfare.
3.16.3 Licensee shall be responsible for payment to the City of all
actual administrative costs incurred by the City, including the cost of staff time, at
the City's full cost recovery rate, associated with the oversight of the patron safety
and security plans required by this section, including the administrative costs
associated with the review and approval of a patron safety and security plan or
any amendments thereto which may be mandated by the chief of police. The
chief of police shall estimate the cost of City staff and other administrative costs in
connection with oversight of the patron safety and security plans and the licensee
shall deposit such amount at the time of submitting the patron safety and security
plan to the chief of police. If actual costs incurred exceed the initial deposit the
chief of police may require the applicant to make additional deposits to offset
costs incurred or to be incurred by the City. If the amount estimated is in excess of
the cost incurred, the difference will be refunded to the applicant at the end of
the City's review.
3.17 Crime Reporting Requirement.
3.17.1 Every licensee, key employee, employee, or independent
contractor of a cardroom shall immediately report to the Chula Vista Police
Department any crime committed on the cardroom premises.
3.17.2 Each licensee shall maintain a chronological criminal activity
log and such other reports as the chief of police may determine are needed in
order to effectively assist the Chula Vista Police Department to carry out its law
enforcement function and protect the public health, safety, and welfare.
3.17.3 It shall be unlawful for a licensee, manager, employee or
independent contractor of a cardroom to disable any 911 access on any public
telephone on the cardroom premises.
3.18 Licenses or Key Employee on Premises.
A cardroom shall have on the premises, at all times the cardroom is
open to the public, the licensee or a key employee. A "key employee" for
purposes of this section is defined as an employee who shall have access to all
cardroom premises for purposes of inspection or for purposes of compliance with
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any provision of this Gaming Plan and who shall have the responsibility and
authority to ensure immediate compliance with the Gaming Plan and all state
laws and regulations pertaining to gaming. Further each cardroom licensee shall
identify in writing the name, address, and telephone number of each key
employee, and each key employee shall wear an identification badge
designating the employee as a key employee.
4. Enforcement.
4.1 In General.
It is unlawful and a violation of this Gaming Plan to obtain, transfer or
consolidate a cardroom license, or to operate a cardroom in violation of any of
the regulations and rules set forth in the Gaming Code, this Gaming Plan, and any
and all other applicable federal, state and local laws, rules, regulations or permits.
4.2 Monetary Fines.
4.2.1 Amounts of Fines. For any violation of the terms of this
Gaming Plan, the City shall have the right to impose a penalty of up to $1,000 per
day for each day the licensee is in violation. In the event that a licensee is cited
for a violation (not necessarily the same violation) more than three (3) times within
a six-month period, upon the fourth such citation, and with respect to any
occurrence thereafter, the City shall have the right to impose a penalty of up to
$5,000 per day the licensee is in violation.
4.2.2 Imposition of Fine Not Election of Remedies. The pursuit of
monetary fines against a licensee or the receipt of payment therefore shall not
constitute an election of remedies on the part of the City and thus shall not
preclude any other course of action such as may be available including, without
limitation, the revocation of the cardroom license held or issued hereunder, the
revocation of any and all permits or approvals permitting the operating of the
cardroom, and any and all other remedies available to the City at law or in
equity.
4.3 Revocation and Suspension.
4.3.1 City Right to Revoke or Suspend. Any cardroom license issued
or held hereunder may be revoked or suspended by the City, after a public
hearing, upon the determination by the City council and the chief of police that
with respect to the license and/or cardroom operated thereunder, there has
been a material violation, or repeated violations of this Gaming Plan or any or all
other applicable federal, state or local laws, rules, regulations or permits.
4.3.2 Material Violation. The City shall determine, in its sole
discretion, what shall constitute a material violation for purposes of revocation or
17
suspension under this Section 4.3. Material violations may include,without
limitation, the following:
(a) A misrepresentation or exclusion on any application for
approval, report or statement of revenues required to be submitted under this
Gaming Plan or under any other applicable federal, state or local law, rule,
regulation or permit.
(b) A non-complying purported transfer of a cardroom license held
or issued hereunder.
(c) Allowing persons other than those named in the application on
file with the City, or otherwise previously approved by the City, to hold a financial
interest in, or have direct management authority over, a cardroom.
(d) Maintaining a greater number of tables than the number
permitted by the license.
(e) Failure to strictly comply with any and all federal, state, and
local laws, rules, regulations, and permits applicable to the holding of a license or
the operation of a cardroom hereunder, including,without limitation local land
use and other code provisions.
(f) Failure to pay, when due, the amount of license fee owed
pursuant to Section 2.7 hereof.
(g) Citation of five (5) or more minor violations of this Gaming Plan
within any twelve (12) consecutive months.
(h) The conduct of criminal or dangerous activities at or attributable
to the licensed cardroom.
(i) Failure to pay, when due, the amount of any monetary fine
imposed pursuant to Section 4.2.1 hereof.
(j) Refusal to permit City access to a cardroom for purposes of
auditing or inspecting same.
4.4 Inspection Rights.
The City shall have the right, at any time, without notice, to enter into
any cardroom operating within the City and to conduct a reasonable inspection
of all areas of such cardroom, and/or any or all fixtures, equipment, accounting
materials or documents contained therein, in order to determine whether or not
such cardroom is being operated in accordance with this Gaming Plan. This
inspection right is in addition to the audit rights enumerated in Section 2.7.4 herein.
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5. General Provisions.
5.1 Definitions.
Except as otherwise expressly defined herein, capitalized terms, and
terms otherwise requiring definitions for proper interpretation, shall have the
meanings ascribed thereto by the Gaming Code.
5.2 Section Headings.
Section headings contained herein are for reference purposes only
and shall not be deemed to govern, limit, modify or in any manner affect the
scope, meaning or intent of the provisions of any section hereof.
5.3 Gaming Plan Amendments.
5.3.1 City Council Approval Required. This Gaming Plan may be
revoked or amended, in whole or in part, at any time, after a public hearing, by
approval of the City Council, provided, however, different terms of operation may
be provided in the agreement required by Section 5.5 hereof, below.
5.3.2 Full Cost Recovery for Administrative Costs Associated with
modifications to Gaming Plan.
Any Person requesting any modification to the Gaming Plan shall be
responsible for payment to the City of all actual administrative costs incurred by
the City including the cost of staff time, at the City's full cost recovery rate,
associated with the request for modification of the Gaming Plan. The chief of
police shall estimate the cost of City staff and other administrative costs in
connection with the requested modification and the Person shall deposit such
amount at the time of submitting his/her request for modification to the Gaming
Plan. If actual costs incurred exceed the initial deposit the chief of police may
require the applicant to make additional deposits to offset costs incurred or to be
incurred by the City. If the amount estimated is in excess of the cost incurred, the
difference will be refunded to the applicant at the end of the City's review.
5.4 Integrated Plan.
All provisions of this Gaming Plan are intended to be integral parts of
a comprehensive regulatory scheme. In the event that any material provision
hereof is finally determined to be invalid, then, as of the date of such
determination (a) the entire Gaming Plan shall, AB initio, become void and of no
effect, and (b) the Gaming Code provisions otherwise implemented or
superseded hereby shall become effective.
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5.5 Agreement of Licensee to Accept Validity and Abide by all
Provisions.
Each licensee which holds or is issued a license hereunder, in order
to legally operate a cardroom within the City must first enter into a written
agreement with the City whereby, for the term specified therein, such licensee
agrees, on behalf of itself, any successors or assigns thereof, and any and all
parties with a financial interest in the license or the cardroom operated
thereunder, that such Persons (a) shall abide by any and all provisions of the
Gaming Plan, (b) acknowledge that all provisions of the Gaming Plan are valid
and enforceable by the City against such Persons; and (c) waive and agree not
to pursue any and all claims or other action against the City that any or all
provisions of the Gaming Plan were not legally adopted, valid or enforceable with
respect thereto. In consideration for licensee's commitments thereunder, such
agreement may also provide for a specified time period for card room operations
without being subject to City imposed changes to the Gaming Plan, all as more
specifically provided therein.
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CHULA VISTA GAMING PLAN
[Adopted July 23, 20191
In accordance with Chapter 5.20 of the Chula Vista Municipal Code (the
"Gaming Code"), this document shall serve as the gaming plan for the
operation of Cardrooms within the City of Chula Vista (the "Gaming Plan"). This
Gaming Plan was ori iq nally adopted on February 13, 1996, after a public
hearing, pursuant to city council Resolution No. 18212. The Gaming Plan has
been amended as follows: (1) on January 13, 1998 pursuant to Resolution No.
18862; (2) on November 10, 1998 pursuant to Resolution No.-_19251; (3) on
September 26, 2000, pursuant to Resolution No. 2000-332; (4) on October 6, 2009,
pursuant to Resolution No. 2009-238; (5) on March 14, 2012, pursuant to
Resolution No. 2012-047; (6) on March 3, 2015, pursuant to Resolution No.
2015-056; and, 7 on April 11, 2017, pursuant to Resolution No. 2017-0128. The
modifications contained in such amendments shall be deemed effective as of
the dates of their adoption.
Effective upon its adoption, this Gaming Plan implements,
in its entirety, Subchapter 2 of the Gaming Code theeVo-n4 relatin_ to
Cardrooms. Pursuant to Subchapter 1, Section 5.20.004, of the Gaming Code
any inconsistency between thwisthe Gaming Code and the Gaming r V the
-GRA;*;^ncPlan shall be governed by the provisions of the Gaming
Plan shall govern. Except to the extent that this Gaming Plan expressly modifies
or is otherwise inconsistent with the Gaming Code, the Gaming Code shall
remain in full force and effect.
This Gaming Plan is intended to deal only with the subject of
e Cardrooms. No other types of gaming permitted by the ,
Gaming Code, shall be-
per m¢*�d er governed hereby. To be permitted, such other types of gaming must
be the subject of further action by resolution of the ' City Council to
amend or add to this Gaming Plan.
This version of the Gaming Plan is adopted and effective as of July 23,
2019, pursuant to City Council Resolution No.
CARDROOMS
1 . Cardroom Defined.
1
For the purpose of this Gaming Plan, a "cardroom" is defined to be any
space, room, or enclosure furnished or equipped with a table or tables used or
intended to be used, either exclusively or in conjunction with another business or
activity, as a card table for the playing of cards and similar games, and the use
of which is available to the public.
2. Licensing.
2.1 License Required to Operate Cardroom - Individual Licensees Must
be 21 Years or Older.
A license from the ekyCity issued pursuant to this
Gaming Plan, is required for any person, group of persons, partnership,
corporation, or any other entity or organization (each a "Person" hereinafter) to
engage in or carry on, or to maintain or conduct, or cause to be engaged in,
carried on, maintained or conducted, any cardroom in the eityCity. Any such
activity conducted without such a license, or otherwise in non-compliance with
the terms of this Gaming Plan, the Gaming Code, or any and
all other applicable federal, state and local laws and regulations shall be
unlawful. No license shall be issued to any individual Person under the age of
twenty-one years.
2.2 Number of Licenses Permitted - Existing Licenses.
The number of licenses authorized to be issued or held, in the aggregate,
under the provisions of this Gaming Plan shall be limited, based upon the
population of theCity according to the certified determination thereof by the
state department of finance.
than two ,. All such licenses shall be issued and held in accordance with
the provisions of this Gaming Plan; provided, however, any Person holding a
license or licenses to conduct cardroom operation upon the effective date of
this Gaming Plan may continue to hold such license or licenses subject to the
terms and conditions set forth herein. For purposes of determining the number of
licenses which are authorized to be issued by the . City hereunder, any two
licenses which are "consolidated" pursuant to Section 2.6 hereof shall still be
treated as being two separate licenses counted against the total number
authorized understate law, and shall be entitled to all rights, benefits, and
restrictions as if the licenses were held separately, both under state law and the
terms of this Gamin Plan.
2
2.3 Two Types of Lieenses - Glass 1 ano Glass !!Gaminq Classifications.
2.3.1 _|n General. There shoU be two types ofcordroom licenses:
GtassCateaory | and GhassCateaory U. The characteristics, rights, obligations and
|
limitations attributable, respectively, tOO
| - --- | Or ---- =~~~-
U
licenses are set forth throughout this Gaming Plan. Subject to QU such provisions,
in general, (a) a Glass 1 lieense shall permit the playing of all games permilRe-1 P11 y
the state attorney general to _e w....... I.— perm -.e - -J 0. laeal lieensing-by-
Gal;-'E)rn;.a eitlie_-, exeept games involving "baek4ne" net-.., _ (n) a Glass 11
lieense shall permit the playing -ef. -A. Uparness porMittea un-der -- r
shall also perm-N,gia-mmes involving back-Me
(a) a Cateqory I license shall permit the playing of all games
available for licensure throuqh the Office of the Attorney General, excepL_qgmes
involvinq "back-line" bettina- and
(b) a Cateaory 11 license shall permit the playing of all games
permitted under a Category I license and shall also permit games involving
back-line bettina. "Back-line" bettinq card qames are card ames which allow
bet on a hand beina r)laved bv a olaver seated at that table. Subiect to state
and local low, multiple "back-line" betters may be allowed to participate in any
one acme.
2.3.2 All licenses issued byfhe shall initially be
| licenses. |norder fo eenvertobtain a
GhassCateaory U license, the (a) must have
continuously operated Q CardrOOm un.der its Classthat plays Category | kense—
for period of three (3) years ; and (b)
|
must apply with the
� _,~�� 3�d receive phor��p[oY�| from the _` �fo[sUch
. ~-.
conversion in accordance with the application procedures set forth in Section
2.4 hereof, below.
2.4 .
2.4.1 In General. Any Person desiring (3 Cardroom license mU3f
|
submit an application #+efeforoO the chief Ofpolice. SuehThe application shall
be on a form issued by, or otherwise approved in advance by, the chief of
police. Such application shall include, in addition to any other information
required by the chief of police, (a) the true names and addresses of any and all
Persons currently, or contemplated to have a "financial interest" in the cardroom
operation proposed to be licensed, (b)-the past criminal record, if any, of any
and all such Persons; (c)--the fingerprints of any and all such Persons; (d)--the
proposed location of the cardroom; and (e)--a non-refundable fee, as presently
designated, or as may in the future be amended, in the Master Fee Schedule, to
cover the cost of processing the application and of any required investigation of
the applicant. Upon the issuance of a cardroom license, the chief of police may
authorize the refund of the investigation portion of the application fee to any
Persons who were not subject to investigations.
2.4.2 Approval Required. Any and all proposed cardroom
licensees must receive (a) orior written approval of the chief of police, which
approval may be withheld in the sole discretion of the chief of police, (b)
approval by the State of California Division of Gambling Control; and (c) the
ratification of the City Council, which ratification may be withheld in the sole
discretion of the City Council. Such aQproval and/or ratification may be
conditioned as the acting parties deem arpropriate, and may be based, but is
not required to be based, entirely or in part on the assessment by the chief of
police or, as applicable, the City Council, of the character of the proposed
licensee, or on the opinion of the approving or ratifying entity, that there appears
to be good cause why such Person should or should not operate a cardroom.
Notwithstanding the foregoing in the event of a transfer directly caused by the
death or divorce of a Person holding a financial interest in a license, the "prior
approval" requirement, above, shall be amended to require that approval of
the resulting transferee be obtained by no later than sixty (60) days following the
death or divorce causing such transfer. The time limit may be extended
provided the resulting transferee has submitted its application and such
additional information as may have been requested with the licensing authorities
in a timely fashion. .
interest,'I Each cardroorn license application shall be totallyn dependent and unasseeiated-with. any other application being subr
purpose of entaining such a license. No applicant requesting a license pHrSUant to
this section may have a financial ,as deserinned in
or any other interest fSection 'D.A.3 hereoO in any other car A room
or appNeation pen-4 in
y
Wa of e .
4
2.4.3 For purposes of this Section 2.4 and the Gaming Plan, the
term "financial interest" shall mean any and all direct or indirect ownership,
creditor or other interests, in a cardroom license, the cardroom business
operated thereunder, the assets thereof, or the revenues generated thereby.
2.4.3.1 Such an interest shall include, without limitation, any
and all interests held by building owners, landlords, tenants, equipment or fixtures
owners, lessors or lessees, creditors, lenders or guarantors related in any way to
the ownership, financing or operation of the cardroom; and (b) a parent,
spouse, sibling or child of an individual Person holding a direct, majority or
controlling ownership interest in a license or cardroom shall also be deemed the
holder of a "financial interest" for purposes of this Section and this Gaming Plan.
2.4.3.2 The City shall decide, in its sole discretion, whether a
particular circumstance or transaction falls within the scope of the definition of a
"financial interest" that requires submission of an application to the chief of
police and approval by the Council for separate licensure.
2.4.4 Any new or revoked cardroom license otherwise qualified for
issuance may be issued during the period of May 1 through June 30 following the
availability or revocation date of such a license. After the expiration of this
period no further licenses shall be issued until the following May 1 through June
30 period. In the event that there are applications in excess of the number of
licenses available in accordance with the limitations set forth in Section 2.2
hereof, a license may be issued to the most qualified of such applicants in
accordance with a procedure established by theCity. Notwithstanding the
foregoing, theCity shall decide, in its sole discretion, as to whether to issue
any cardroom license authorized hereunder, and whether or how to condition
such an issuance; furthermore, the eltyCity reserves the right, for any reason
whatsoever, to reject any and all applications for a cardroom license hereunder.
2.5 Transfers.
2.5.1 _In General. Any license issued pursuant to the Gaming '--eee
or—this Gaming Plan, a cardroom operated thereunder, or any direct or indirect
interest therein, may only-be transferred, in accordance with the
terms and conditions of this Section 2.5. Transfers governed by this section shall
include, without limitation, any and all sales, leases, conveyances, assignments,
grants, pledges, gifts, devises, donations and/or similar transfers by a Person of
5
any or all of such Persons, direct or indirect, ownership interest in a license or
cardroom operated thereunder, or "financial interest" in a license or cardroom
operated thereunder, as such concept is defined in Section 2.4.3 hereof.
2.5.1 .1 Such transfers shall include, without limitation, (a)-_a
transfer of all or any shares by a shareholder in a corporate licensee; (b)--the
transfer of all or any partnership interest by a partner in a partnership licensee;
(c)-the transfer of all or any portion of a controlling shareholder or partnership
interest in an entity which itself holds a direct or indirect ownership or financial
interest in a license or cardroom; and (d)-_a transfer of a substantial portion of
the assets of a Person holding a license or a cardroom operated thereunder.
2.5.1 .2 Such transfers shall not include (a) corporate
structure reorganization where the individuals involved in the ownership and their
respective percentage interests do not change, (b) transfer of ownership interest
for estate planning_purposes where the trustee is the same as the current
licensed owner, or (c) such other situation that is similar to those described
above that the City deems to be immaterial.
2.5.2 Application Required. Any applicant seeking a license
transfer must comply with all
of the application and approval
of licensesrequirements set forth in Section 2.4 hereof. Feesfor the tic i n
police,and i.n v es+L.;g a ti a n relating to transfers are adAresse A in Section O.S.0 hemin.
-Appireva 1 Require- ..ny an- all propose- car-room license transfers must
falreceive , , prior written approvall of the chief of
police, which approval may bewithheld in the sale A isere'an of the chief of U LEE
Control; approval b-y the -State of
California Divi-sion of Gambling l the ratification of the eity
and ,
.-I. iatilieati— may be vithhe. in the sale -iscretion of the city council.
approval an A lor ratification may be con A itione A as the acting parties A eem-
appropriateis net require A Ile
he
entirely or in part
P an A may be base 9 f
on the assessment by the chief of police PVVI
P Council,
t
entity,
that there appears to he good cause why such Person should or should not6
ff 11
2.5.4- Three Years Operation Required Before Transfer. With the
exception of those licenses which have been issued prior to September 1, 1992,
no license may be transferred unless and until the holder thereof has been
operating a cardroom governed by such license for three (3) years at a fixed
location in the eityCity. Licenses issued prior to September 1, 1992 may not be
transferred unless and until the holder thereof has been operating a cardroom
governed by such license for one (1 ) year at a fixed location within the Cit .
2.5.5 _Non-Complying Transfers. In the event of a purported
transfer of a license that does not comply with the terms of this Section-,(-a4,
the purported transferor shall be subject to monetary penalties as provided in
Section 4.2 hereof; . The purported transferee shall have no rights to
operate a cardroom in theCity under the authority of such license; _
The license involved shall be subject to revocation by theCity as provided in
Section 4.3 hereof; and (d) the transfer may otherwise be declared null and void.
2.5.6 _Special Rules for Transfers of GlassCategory II Licenses.
2.5.6.1- Except as otherwise provided herein, upon the
transfer, either all at once or in a series of transfers, of a "material or controlling
financial interest" (define below) in aCategory II license, the Category
II license, which is the subject of such transfer,shall immediately revert back to a
QassCateaory I license. A Cate_ory II license so reverted may be
converted back to a Category 11 license, but only in accordance with the
provisions of Section 2.3.2 hereof.
2.5.6.2 _Notwithstanding the foregoing, a material or
controlling interest in a GhassCategory 11 license may be transferred without
7
reversion of the subject Category II license to GhalssCategory I status subject
to the following terms and conditions:
(a) The transfer must be to a "pre-qualified
transferee". For purposes of this Section, a "pre-qualified transferee" shall be
defined as a Person on record with the chief of police as a Person holding a
financial interest in the license, which, with the prior knowledge of the chief of
police, acknowledged in writing thereby, has been substantially responsible for
the management and operations of a licensed cardroom continuously for a
period of three (3) years.
(b) In addition to the agreement required pursuant to
Section 5.5 hereof, any pre-qualified transferee shall enter into a written
agreement with the eityCity whereby such Person, on behalf of itself, any
successors or assigns thereof, and any and all parties with a financial interest in
the license or the cardroom operated thereunder, agrees that (a) the
GlassCateaory II status of the license to be transferred thereto shall be temporary
and subject to reversion to Category I status in accordance with this
Section; and (b) any action taken by the City to revert the GlassCategory II
license to a Category I license shall not constitute a taking of any property
or other interest held by such Person(s), and (c) such Person(s) waive and agree
not to pursue any and all claims or other action against the City in connection
with a City decision to revert the GkisssCategory II license to a GlassCategory I
license.
(-c) Until such time that Category 11 Games have
been operated continuously by the pre-qualified transferee for a period of one
(1) year following the effective date of the transfer of the Cate®ory II
license, or such longer period as the Category 11 license, or such longer
period as the chief of police may require (the "Temporary Category 11 Status
Period"), the GtassCalegory 11 statues of the license shall be temporary, and
therefore subject to reversion to a GlassCategory I license upon a determination
by the chief of police, in his/her sole discretion, for any or no reason whatsoever,
that the transferee should be required to first operate as a GfassCategory I
licensee prior to being permitted to operate as a GlassCategory 11 licensee in
accordance with the terms and conditions of Section 2.3.2 hereof. Such
8
determination may be made at any time within thirty (30) days after the
expiration of the Temporary GlassCategory II Status Period.
(d) Pre-qualification of a potential transferee
hereunder shall not constitute City approval of a transfer to such potential
transferee and any such transfer shall remain subject to the provisions of Section
2.5 hereof.
2.5.6.3- For purposes of this Section, the City shall determine,
in its sole discretion, what constitutes a "material or controlling financial interest"
provided}_ however, in general, a transfer of a financial interest for purposes of
pre-qualifying a Person under Section 2.5.6.2 shall not be considered the transfer
of a "material or controlling financial interest".
2.5.7. Except as otherwise provided herein, upon the transfer,
either all at once or in a series of transfers, of a material or controlling financial
interest in a license or the cardroom operated thereunder, the holder of the
license,which is the subject of such transfer shall be considered to be new
holder of such license subject to any and all provisions hereunder applicable
thereto.
2.5.8. Full Cost Recovery for Administrative Costs Associated with
Transfer. Any person submitting an application for transfer of a license shall be
responsible for payment to the City of all actual administrative costs incurred by
the City including the cost of staff time, at the City's full cost recovery rate,
associated with the investigation of the application for a license transfer and
review of transfer documents. The chief of police shall estimate the cost of City
staff and other administrative costs in connection with an application and the
Person shall deposit such amount at the time of submitting the application for
license transfer to the chief of police. If actual costs incurred exceed the initial
deposit the chief of police may require the applicant to make additional
deposits to offset costs incurred or to be incurred by the City. If the amount
estimated is in excess of the cost incurred, the difference will be refunded to the
applicant at the end of the City's review.
2.6_ Consolidation.
2.6.1 In General. Notwithstanding any other section of this Gaming
Plan to the contrary, the holder of a GlassCategory I or Category II license
may acquire one, but only one, additional GlassCategory I or QassCategory II
license, subject to the consolidation rules and procedures of this Section 2.6.
9
Under no circumstances may any Person acquire or hold more than two City
licenses.
2.6.2_ Required Qualifications/Procedures. In order to acquire an
additional license, an existing license holder (a) must have continuously
operated a cardroom under its existing license within theCit for a period of
three (3) years at a fixed location; and (b) must apply with theCity and
receive prior written approval from theCity for such acquisition in
accordance with the rules and procedures set forth in Section 2.4 hereof
regarding the initial issuance of licenses. If the additional license is to be
acquired from another existing license holder, such application shall also be
made in accordance with the rules and procedures governing license transfers
set forth in Section 2.5.3 hereof.
2.6.3_ Effect of Consolidation; Deemed Consolidation. If an
application for the acquisition of an additional license is granted, the two
licenses held by the applicant shall become "consolidated". In addition,
licenses shall be deemed to be "consolidated" in the event that the same
Person holds, or comes to hold, a "financial interest" (as defined in Section 2.4.3
thereof) in such licenses or the cardrooms operated thereunder. Under a
consolidated license, the maximum number of tables permitted to be operated
is twenty -six 26), subject to any additional or contrary terms and conditions
set forth in Section 3.5 and/or other provisions of this Gaming Plan. All tables
operated under a consolidated license must be operated in the same location.
2.6.4 Ghaiss Category I with t II Consolidations. In the
event that aCategory I license is consolidated with aCategory II
license, the following rules shall apply: (a) if the previous owner of the
GkissCateaory II License retains majority ownership and control over the
consolidated license, the full benefits and burdens hereunder of C4assCateaory II
status shall apply to all the card tables operated under such consolidated
license (b) if the previous owners of the GhassCateaory I License retains majority
ownership and control over the consolidated license, the consolidated license
shall retain GhassCategory I status and the requirements for conversion to a
GhassCateaory 11 License under Section 2.3.2 of this Gaming Plan shall continue to
apply.
2.7 License Fee.
10
2.7.1 _In General. There shall be a license tax4nipesedfee on any
licensed cardroom within the eityCity in accordance with the terms of this
Section 2.7. The license taxfee is-Imposed for purposes of generating revenues to
the general fund of the City and not for purposes of regulation. The taxfee
shall beimpeseu agaiastbased upon the number of tables that are licensed by
the eityQty pursuant to the terms of this Gaming Plan that are also permitted to
be operated by the City at the location where the license is being utilized
pursuant to the City's land use laws and regulations. The taxfee shall be
inipesed-
based upon the maximum number of tables so licensed and permitted based
upon the ekasscategory of license issued with respect thereto, regardless of the
number of tables whiehthat may actually be operated on any given day or the
e4asscateqory of game conducted thereon. Notwithstanding the foregoing, if
the Cityaarproves new tables, but State arproval is required before the
operation of any such new tables, the license fee set forth below in sections 2.7.2
through 2.7.6, inclusive, with respect to such new tables, shall notgo into effect
until the date the required State approval is obtained.
2.7.2 Amount of Tax4RateFee. The license taxfee to be assessed
and collected on each licensed cardroom shall be the applicable "base rate"
taxfee determined as follows:
2.7.2.1 _Base Rate:
a. QassCategory I 14 nsi-e . Effective July
1, 2019 the base license taxfee for card tables licensed under a single, non-
consolidated GlassCategory I license shall be $1,500 per ear-d tak-le per quarter
" 7SO per ear-
for a eafdfaoffi. --utherizedd to operate six (16.1 alays per week; andi
11-an-le per annual quarter for a eardreern aut h-;__A *_ --f- --
500 per carA +able-
9
per annual quarter.
11
Bettinge The 10ase license tax for Glass 1 A ea r-4 +a1,Ies s"all 1,e it
3,750 per card
table per annual quarter. Sue.h. games may 1--e referredd to herein as Glass !A
gaFnes_q.u.arter.
b. d. 11:1-;.eense: E)f-
Effective July 1, 2019 through June 30, 2020, the agfeement provided
S.S hereof, +L.'-,e base license taxfee for each card table in a cardroom licensed to
play GlassCategory 11 games under a GfassCategory 11 license shall be $7-,4GO--per-
tal.-le per annual quarter-.9.00000 per table per annual quarter. Effective July 1, 2020
through June 30, 2021, the base license fee for each card table in a cardroom
licensed to olav Cateqory 11 qames under a Category 11 license shall be 19,540.
This rate shall apply to the maximum number of tables licensed and
penrAtedgppLoved to be operated at the cardroom location regardless of
whether or not such tables are actively being used, and regardless of whether or
not G4assCategory 11 games are actually being played at such tables.
c. Percaae Pavment Structure The base rate license fee
for operation of any tables licensed by the City to the cardroom as set forth in
this Gaming Plan may be converted to a license fee based upon a percentage
of gross revenue generated by Licensee from the play of any game or gaming
-
activitv("Percentaqe Payment Structure"). Unless otherwise specified in an
amendment to the Gaming Plan, the timinq of any conversion to and the
specific terms of any Percentage Payment Structure shall be set forth the
agreement between the parties required pursuant to Section 5.5 hereof.
2.7.3 Procedures for Payment of TaxFee.
2.7.3.1 -Advance Payment. The license tax assessedfee
provided hereunder shall be payable quarterly in advance by no later than the
day falling fifteen (15) days prior to the first day of each calendar quarter.
2.7.4- Audit rights. The City shall have the right to conduct an
independent audit of licensee's accounting records at any time upon three (3)
days prior written notice to licensee. The audit shall be performed by a party
designated by the City, subject to the reasonable approval of licensee. If the
12
City elects to conduct such an audit, the licensee shall be responsible for
reimbursing City costs incurred in connection therewith. The licensee's
reimbursement obligation under this Section shall not exceed $10,000.00 per any
twelve (12) month period.
2.7.5 Receipt. The finance director shall issue a receipt for
each licensed cardroom and such receipt shall be displayed on the premises
during the full term for which such receipt was issued.
2.7.6 Annual Increase in Base License Rate. The base rate
license taxfee amounts set forth in Section 2.7 shall be increased by three
percent (3%) per year. The first increase shall take effect on July 1, 2021 and
each subsequent increase shall take effect on each July 1 thereafter. This
annual base rate increase shall apply to all tables licensed and approved in the
previous year regardless of whether or not such tables were actually permiffe. or
put into service that year. Notwithstanding the above, if the Percenta_e
Payment Structure becomes the basis to calculate the base rate license fee,
then the terms of increase in such fee shall be qoverned by the agreement
entered into pursuant to Section 5.5 hereof.
3. Operating Limitations and Conditions.
3.1 City Land Use Regulations Shall Control.
All cardrooms and card table operations shall be subject to the ' City's
land use regulations. Notwithstanding any provision in this Gaming Plan to the
contrary, no cardroom operations shall be permitted without the prior acquisition
of any and all necessary approvals and permits from the ekyCity in connection
therewith, and any cardroom operation with such approvals and permits shall
operate in strict compliance with any and all terms and conditions thereof. For
example, in no event shall the cardroom exceed the number of players it is
restricted to in its conditional use permit based on parking limits or other imposed
conditions.
3.2 —Games Permitted.
3.2.1 GlassCategoU I License: Subject to the terms and conditions
of this Gaming Plan and the Gaming eadeCode, the holder of a Qa6sCategory I
cardroom license shall be permitted to operate a cardroom whichthat conducts
13
all card games wh-i-eh ;,"� �that have been determined by the attorney-
generalOffice of the Attorney General of the State of California ("Attorney
General"
I to be within the permissible subject of local licensing by California
cities, but that do not-�veexcludina those games involving "backline betting—",
13C Onnn 11
and the*, haye been approved "by the chief of police as of -September .., �www.�
The games permitted under this section shall be referred to herein from time to
A
list of permittle-4 Glass 1 Games shall be
time as "GlaseCate aory I Games"
maintained by the chief of police. Glass 1 Games include, 'Dut are n t Re- t
the game of "caribbean st u d poker" 'em p,ek,er55 _`
i 91
, ,
11 W1
Spl . A ;14
pineappIe--high-low L - h.e 1 der of a Glass 1 or Glass 11 license me .L.e n th.e
chief at peliee te add games to this list, ;
WIU�� III Ully �WII�ULUV�
-
twelve menth per; The chief of police shall have flhe right tee �VVU -
A;---_ any propose' new games in his/her sole discretion, and sue.". Adecision
u
shall be final.."
3.2.2 Gliass Cateciory 11 License: stfbjeetS�bect to the terms and
conditions of this Gaming Plan and the Gaming eedeCode, the eklerholder of a
Cate or 11 cardroom license shall be permitted to operate a cardroom
which conducts all card games permitted by a GhassCategory I license (as
described in Section 3.2.1, above,), plus those card games which involve
backline betting. Such games shall be referred to herein from time to time as
"Glass 11 Games", and include . gow poker" ........eFed a "Glass 11 Game"., no
Aack;ack 4.0and all versions of 231$t y
-centur ,
bust 21" century 1 . 11 " "
"IU�FIJU N--
are considered "Glass 11X games but are iffieluded under a e-1--- 11
I_ieense4Cateaory 11 Games." For purposes of this Gaming Plan, back-line betting
may be conducted, as that term is understood pursuant to Business and
Professions Code Section 19843-,-and-pFevKted4hat-.1f the playe,--deale., position iss
continuously and systernatically rotated amengst-Office of the -1...... A
permitted Glass 11 games shall be maiimn+aine"Attorney General authorizes a
new game that would fall within Category I but has not previously been played
in the City, then the Licensee will simultaneously send the chief of police-.---P,
heW-&r-a copy of a Glass 11 license may petition Lh.e chiefthe application reguest
14
for game approval submitted to the Office of the Attorney
General. The chief of police shall provide notice within 30 days whether it would
like to 111his liSt, 'But no more 'Uhan enee in any e-en-see-utive-twelve menth.
pe4o�further review the game before it is played at the cardroom. The chief of
police shall have the right to approve or disapprove any proposed new games
in his/her sole discretion, and such decision shall be final. If no notice is provided,
it is assumed that the game is approved to be plaved in the City.
3.3 Game Rules.31.2.3 Des*
tkg--e�ermitteo Games
Q eing -Played. '. .here- Except asspecificallyprovided in this Gaming Plan, all
rules for aames played at a cardroom shall be pested4ngoverned by State law
-
and the California Bureau of Gambling Control (the "CBGC"), the California
Gambling Control Commission (the "CCC"), or their successor entities
(collectively "State Agencies"). Rules for everyeafdroemg�gme al�Iowed�shall be
made readily available to players and prospective players as follows: (1 ) in letters-
M 0 -4
plainly v;.s;."-.Ie from all parts thereof, signs stating which ga es have ".e--.. appr ve.
for playa�one or more binders within the cardroom-.; (2) on the cardroom's
official website (if any); and (3) in printed fliers. In addition to the foregeft, each
table shall identify - _;__ I—
Y F. -W., leeated thereen the game whieh4s-currently
being played using a prominently placed sign at said table.
A aeneric'D.D
'3 1 In General. ["a permitted I— _1_-_.4 tfRl
11
E3-1- 1 -F- -�' -
game 4as-beeri-
A + -1
suornitte E) + e chief of police ano appre, ed thereoy. Snaidd approval may o-e
amended.P ceneitioned or revokeo frem time to time In the sole Aiscretien of the
dhief of poliee. Eaeh. ana every-p-ennittled game must, at all times, be playeu
in aeeordanee with. the approvea and-poslea
Variations of a game, unless specifically ue s e r;.o e 04 In the Game Rules, shall net he
aflowed-.
15
name is permissible for
the appreved G- ules shewing-thereen the approval of 'the chief of police shall
be poste. .n the ca rd,e.eM I ;U 1-1 Ua eenSpieueuS pi aae�e I ea AU 1;1PY, Uav�ai 11 aa WE�e te +U U�e pVU LI UI I
or prespeetive patrons and v;.s;."-.Ie from any seat at any eard table on4he-
_; Hes7sian (i.e., California Blackjack, Pai Gow Poker, Ultimate Texas Hold'Em,
HE-....s
etc.L
3.4 Hours and Days of Operation.
Licensed cardrooms may operate seven days per week, twenty-
four hours per day subject to any and all land use conditions imposed by the City
with respect to a specific site of operation.
3.5 Maximum Number of Tables.
Subject to such limitations as may be imposed by local land use
conditions, to a specific site of operation, the maximum number of tables that
may be operated under a cardroom license are as follows
3.5.1 Gkass Cateaory I - Non-Consolidated. The maximum number
of tables that may be operated under a single, non-consolidated GtassiCategory
I license shall be ekj"sixteen 16).
3.5.2 Ghass Category I - Consolidated. The maximum number of
tables permitted under a consolidated Category I license shall be ninf
�gLwentyjixL26) during gaming operations.
_
3.5.3 Glass Cateaory 11 - -Non-Consolidated. The maximum
number of tables that may be operated under a non-consolidated
GlasisCateciory 11 license shall be eight _0®. O"AF that eight, only twe f,3 N
shall he
+
Le conduct f-'Iassr��.sixteen (16).
3.5.4 Glass Cateaory 11 ®- Consolidated. The maximum number of
tables that may be operated under a consolidated GkassCate gory 11 license shall
be twenty1,201). ni +he-4wen4,
L Ly
16
--4 a maxi-m
allowed to eenduet G-lass 11 or G-lass IIA game-- -at "any e-n-e time, um-ef-
.F;,Ff tic% 4
1.,Leen tables shall "-a allowed to conduct E.3lass 1 games at any ene time,six
L26L. In no event shall more than fifteen (15 of such twenty -six (26) tables be
playedoperated with "backline" betting games at one time.
3.6 Maximum Number of Players Per Table.
Subject to such limitations as may be imposed by local land use
conditions, to a specific site of operation, the maximum number of players
permitted at any one cardroom table are as follows
3.6.1 Glass CategoU I Tables. No more than ten (10) players shall
be permitted at any one card table conducting GhassCategory I games. Only
persons seated at the card table as players shall be permitted to bet._
3.6.2 Glass Cateqory 11 & 1. 11 1.able`. No more than eight (8)
seated players with one-414no more than two additional standingpfayerpLayers
per seat participating in "backline" betting behind the seated player,*et
emee,ed-(for a total number of ice en-+11-6LwentL24) players (standing and sitting)
y _
per tablet shall be permitted at any one card table conducting GhassCate_ory
11 or 11A Gamesgames.
3.7 Maximum BetsUrnits and Bets.
3.7.1 -in General. ThefeMaximum limits and waqers shall be
n-obased on the approvals from the State Agencies. Maximum limit on-bets-of-
and waqer approvals will be provided to the Chief of
Police iseretion. Maximum bets and betting rules may be Fnodif;ed
by *,.'-.a e.hief of poliee, in 1-is ,'"er sale diseretion and 6entrel pursuant ta-a-
17
pfeeedtweprior to
pollee's decision shall Ibe final.implementation.
3.7.17-4 Adequate FuftdsF!nancina on Hand/Payment Policy. At
all times, licensee must have sufficient proceeds to reimburse any and all
demands made upon said licensee for the payment of whnings-by-agil monies
that patrons have on deposit with that cardroom pa4faff. In the alternative, and
subject to appfeva4nofificafion to the Chief of the chief of police in his 'her sale
A;sere";
tionPolice, said licensee may have a written policy for full payment of
all monies that patrons have on it with that cardroom to a
cardroom patron clearly posted in a place visible to cardroom patrons.
3.8 Maximum House Charges Per Hand - - Posting Required.
3.8.1 . Approval. All house charges per-handcollection rates will be
approved by the State Agencies and any proposed charges subject 10herete shall-
1-e sul,qeetnotification will be given to the apprev-a4Chief of the chief of pelieePolice
prior to being imposed.
3.8.2 -Posting Required. A copy of all collection rate schedules e4-
house e.harges shall be provided to the chief of police andChief of Police. The
collection rate in use shall be clearly posted the
table.
3.9 Work Permits and Identification Badges Required For N'a na Eiers-Xey
Employees and Effq#eye�..
3.9.1- Work Permit Required. Unless other provided herein, prior to
commencing work at a cardroom, each proposed employee of
a cardroom, if such Person is other than the Person or Persons whose names
appear on the application for the cardroom license, must obtain a work permit
from the chief of policeChief of Police. Additionally, any employee of any
ancillary business (Third Party Providers of Proposition Player Services, massage
therapists, etc.) that is operating at the cardroom location must also obtain a
work permit.
18
3.9.2- Temporary Probationary Work Permit. Temporary
probationary work permits may be summarily issued upon payment of the
requisite application fee for food and beverage servers,janitorial staff, and
kitchen workers pending the issuance of a regular annual work permit. Such
temporary probationary work permits may be subject to immediate summary
revocation with or without cause by the chief of polices and shall not be valid for
more than thirty (30) days and shall automatically expire upon issuance of the
regular annual work permit or upon denial of the regular annual work permit
application by the chief of police. The fee for temporary probationary work
permit shall be non-refundable and in addition to the fee for the regular annual
work permit application.
3.9.3 -Application Process. Each proposed
key employee of-
employee shall submit an application for the required work permit to the
eh-iefChief of po4eeEorice. Such application shall be on a form issued by, or
otherwise approved in advance by, the ehiefChief of pe4eeRoFice. Such
application shall include, in addition to any other information required by the
chief of police, (a) the past criminal record, if any, of such Person; (cb) the
fingerprints of such Person; and (dc) a non-refundable fee, as presently
designated, or as may in the future be amended, in the Master Fee Schedule for
cardroom applications, to cover the cost of processing the application and of
any required investigation of the applicant including a criminal background
check to be performed by the police department at the applicant's expense.
The work permit, when issued, shall be valid for one (1) year. Any renewal must
also be approved by the chief of police and will be subject to a criminal
background check to be performed by the chief of police at the applicant's
expense. The chief of police may deny the initial approval or renewal of a work
permit if, in the chief of police's opinion, (1) in the case of a proposed key
employee the applicant therefore should not be permitted to act as key
employee or employee in lieu of management by the licensee of the cardroom;
and (2) in the case of a proposed employee the applicant therefore should not
be permitted to be employed in a cardroom.
3.9.4 _Identification badges to be worn. Every employee
employee of a cardroom shall, at all times when present in such cardrooms, wear
an identification badge containing such Person's photograph, age, address and
description e"Lteh.'.R.. first name and the police department issued
19
employee identification number. The identification badges shall be worn at
chest level.
3.9.5_ Limitation of Discretion to Issue Work Permit. In addition to
any other restrictions provided by law, no work permit shall be issued to any other
restrictions provided by law, no work permit shall be issued to anyone who is
disqualified from holding a state gambling license, for any of the reasons
specified in California Business and Professions Code Section 19850.
3.9.6_ Denial of an application for a Work Permit. Any application
for a work permit shall be subject to objection by the State of California
Bureau of Gambling Control (hereafter Bureau). If the
DivisimBureau objects to the issuance of a work permit it shall be denied. Such a
denial may be reviewed in accordance with the Gambling Control Act (Business
and Professions Code Section 19801 et seq.).
V i Play Prohibited-.
'3.0.7.11 R. shall I.-e unlawful fer any lie. 9 key ,
ependent or employee of a eandreem to engage or persua-de any-
1
whet.her financial or a
9 9sueh. rewaro or revenue is to be-dive.-tea to I.I.he f
licensee, a manager or employee
exeopt that the may use empfoyee proposition players- in striet leenferm-ily-
h the provisions of Section 3.9.7 10elwew,
not to veee Z9 at nointerest ®Le t +h
,e following:
ly chips
'De ar
Car ®lsnra , r
/h® Th patron®7® st QLTOT �.Pc�rrrvnr+ _�k
;U+— +—
eIg
fe 'hen a patron requests ehips on
the patron
9
applileatien to 9
20
creditor's driver's
maintain a copy of the
identification card for purposes of 9
e he original of the credit application and the eepy ---I the9
or photo -A
The Ownie-r
-F;I-- .."+;1 -11 Avances have been repaid.
eperater shall produce a copy of such. records te th.e C.hula Vista P4i-c�
7
P
credit,
granted,
at +L,',.e same time determines the credit Irmit and terms for
has fundscover the a va nce
fk% A+ +k- +;me credit is —anted the amount and �---yment terms are
9
and so are available te -the 9
7
computer and makes sure +L,k,.-+L the L.
positively ;A
9
first from any Money !-joing tLes the 9
\ Xj . — patron shall he pre—vii-dedd aa receipt er statement recording each
Iran h+9etb Yi.
LIZlr CCfVrry
A;+ cord elUA
ereU.LS issued pursuant to this policy. Such re - shall in Ue the full
name and address of each P he amount of credit a 9
the
.ate the eredi.twas issued 9 t he eellateral posted (if 9
21
operator shall produce a eopy of the record te the C.hula Vista Police—
Department upon request-,
..s a safeguard for responsib-le gambling, onee +,.',.e advanees to a patron-
I �R--
equal the eredit lirnit, the patron shall net inerease +L.'-.e Fffft.ufftll Fo-
-;A
amount -U.ving is 1-1 — --fu+
fn All eredit extended under this policy shall be reported apprepriately 'F—
state
f M A;* Will 1-
\01 ..e ere— ... be extended to eardreern employees er temporary lieense-
holders.
3.9.8 E+npk)yL-e Proposition Players.
3.9.8.1 A licensee shall use only employees orproperly
licensed independent contractors as proposition players.
3.9.8.2 _A licensee shall not allow, permit, or suffer more than
two-�ZLfour (4 L) proposition players to play at a card table at any given time,
subject to modification by the chief of police in his/her sole discretion.--The-,ehief-
of police's decision shall be final.
3.9.8.3_ The licensee shall not provide any compensation,
reward, credit, chips, or any other thing of value or representation of value to an
employee who acts as a proposition player other than drop reimbursement,
salary or wages earned for the time the employee works as a proposition player.
This prohibition does not prohibit a proposition player from receiving the same
employment benefits as apply to all other employees of the licensee; provided
however-that no employee or independent contractor shall be paid in chips.
3.9.8.4_ A proposition player shall prominently display an
identification badge pursuant to Section 3.9.3 at all times while present on the
cardroom premises.
3.10 Intoxicating Beverages.
22
3.10.1 -Intoxicating Beverages Permitted. Upon application to and
approval by the chief of police, in his/her sole discretion and control and
pursuant to a procedure to be implemented and administered by the chief,
alcoholic beverages may be served and consumed in a cardroom from the
hours of 6:00 PMA.M. to 2:00 AM. At all times that alcoholic beverages are
served, food must also be made available and the cardroom shall comply with
its ABC On-Site General Sale (Type 47) Eating Place license, where 50 percent or
more of all sales must be food. The chief of police's decision concerning the
consumption and service of intoxicating beverages shall be final. Additionally,
licensee shall comply with all applicable state and local laws, rules and
regulations, including the City's land use regulations, pertaining to the sale and
service of intoxicating beverages. All servers are required to have a valid
Responsible Beverage Service ("RBS") certification from an ABC accredited RBS
training provider.
3.10.2_ Key Employee/employee Consumption Prohibited. The
drinking of any intoxicating beverage by any key employee, independent
contractor or employee of a card room while on duty is prohibited. The licensee
of a cardroom shall take all necessary and appropriate steps to assure
compliance with this section.
3.10.3 Permitting Intoxicated Persons to Play in Games Prohibited.
No licensee, key employee, independent contractor or employee shall permit
any Person to play in any game or at any time which such Person is under the
influence of an intoxicating beverage, narcotic, or drug.
3.10.4 -Permitting Intoxicated Persons on Premises -Prohibited. No
licensee, key employee, independent contractor or employee shall permit any
Person to enter a gambling establishment at any time when such Person
appears to be under the influence of an intoxicating beverage, narcotic or drug.
3.11 Minors Prohibited from patronage or Employment.
No person under twenty-one years of age shall be employed at a
cardroom, allowed to play games at a cardroom, or permitted in a cardroom
area where games are being played. Minors may be allowed in non-gaming
areas of a cardroom (for example, in an associated restaurant► but only
with therp for approval of the chief of police, of a written plan containing
provisions that assure that no minor shall have no access to gaming areas or
alcohol. Given the high level of concern with public safety, the Police Chief's
approval of anyplan allowing minor access to non-Qamina areas shall be in
his/her sole discretion wheseand the Chief's decision shall be final.
23
3.12 Signs to be Posted.
Licensee shall comply at all times with the sign requirements set
forth in this Gaming Plan including, without limitation, c6km—,Sections3.3.
, and 3.8.32 hereof, and any and all other signage or posting requirements
contained in applicable federal, state or local laws, rules and regulations.
3.15 Licensee Responsible for Compliance and Supervision of
Operations.
The licensee of a cardroom shall be responsible for assuring that
any cardroom operated under such license is operated in strict compliance with
the terms of this Gaming Plan, the provisions of the Penal Code of the State of
California and any and all other applicable federal, state, and local laws, rules,
regulations, or permits. All cardrooms and/or card tables shall be supervised by
the operator or an employee of the operator of the cardroom, to assure such
compliance. Any violation of the cardroom operating limitations and conditions
in this Section 3, or elsewhere in the Gaming Plan, whether or not caused by the
licensee or any employee thereof, shall be considered a violation by the
licensee of the terms and conditions of its license, and therefore subject to the
City's enforcement rights and policies set forth in Section 4 hereof.
3.16 Patron Safety and Security.
3.16.1_ Each licensee shall submit a written patron safety and
security plan, designed to protect patrons and other persons who are lawfully on
the premises of the permitted cardroom, to the chief of police for his/her
approval prior to opening for operations.
3.16.2_ The chief of police, in his/her sole discretion and control,
shall have the right to require amendments to the patron safety and security
plan that are, in his or her judgment, reasonably necessary to protect the public
peace, health, safety, and general welfare.
3.16.3 Licensee shall be responsible for payment to the City of all
actual administrative costs incurred by the City, including the cost of staff time,
at the City's full cost recovery rate, associated with the oversight of the patron
safety and security plans required by this section, including the administrative
costs associated with the review and approval of a patron safety and security
plan or any amendments thereto which may be mandated by the chief of
police. The chief of police shall estimate the cost of City staff and other
administrative costs in connection with oversight of the patron safety and
24
security plans and the licensee shall deposit such amount at the time of
submitting the patron safety and security plan to the chief of police. If actual
costs incurred exceed the initial deposit the chief of police may require the
applicant to make additional deposits to offset costs incurred or to be incurred
by the City. If the amount estimated is in excess of the cost incurred, the
difference will be refunded to the applicant at the end of the City's review.
3.17 Crime Reporting Requirement.
3.17.1_ Every licensee, key employee, employee, or independent
contractor of a cardroom shall immediately report to the Chula Vista Police
Department any crime committed on the cardroom premises.
3.17.2_ Each licensee shall maintain a chronological criminal
activity log and such other reports as the chief of police may determine are
needed in order to effectively assist the Chula Vista Police Department to carry
out its law enforcement function and protect the public health, safety, and
welfare.
3.17.3_ It shall be unlawful for a licensee, manager, employee or
independent contractor of a cardroom to disable any 911 access on any public
telephone on the cardroom premises.
3.18 Licenses or Key Employee on Premises.
A cardroom shall have on the premises, at all times the cardroom is
open to the public, the licensee or a key employee. A "key employee" for
purposes of this section is defined as an employee who shall have access to all
cardroom premises for purposes of inspection or for purposes of compliance with
any provision of this Gaming Plan and who shall have the responsibility and
authority to ensure immediate compliance with the Gaming Plan and all state
laws and regulations pertaining to gaming. Further each cardroom licensee shall
identify in writing the name, address, and telephone number of each key
employee, and each key employee shall wear an identification badge
designating the employee as a key employee.
4. Enforcement.
4.1 In General.
It is unlawful and a violation of this Gaming Plan to obtain, transfer
or consolidate a cardroom license, or to operate a cardroom in violation of any
of the regulations and rules set forth in the Gaming Code, this Gaming Plan, and
25
any and all other applicable federal, state and local laws, rules, regulations or
permits.
4.2 Monetary Fines.
4.2.1 _Amounts of Fines. For any violation of the terms of this
Gaming Plan, theCjty shall have the right to impose a penalty of up to $1,000
per day for each day the licensee is in violation. In the event that a licensee is
cited for a violation (not necessarily the same violation) more than three (3) times
within a six--month period, upon the fourth such citation, and with respect to any
occurrence thereafter, theCity shall have the right to impose a penalty of up
to $5,000 per day the licensee is in violation.
4.2.2_ Imposition of Fine Not Election of Remedies. The pursuit of
monetary fines against a licensee or the receipt of payment therefore shall not
constitute an election of remedies on the part of the Cit and thus shall not
preclude any other course of action such as may be available including, without
limitation, the revocation of the cardroom license held or issued hereunder, the
revocation of any and all permits or approvals permitting the operating of the
cardroom, and any and all other remedies available to the d4yCity at law or in
equity.
4.3 Revocation and Suspension.
4.3.1_ City Right to Revoke or Suspend. Any cardroom license
issued or held hereunder may be revoked or suspended by theCit , after a
public hearing, upon the determination by theCity council and the chief of
police that with respect to the license and/or cardroom operated thereunder,
there has been a material violation, or repeated violations of this Gaming Plan or
any or all other applicable federal, state or local laws, rules, regulations or
permits.
4.3.2 _Material Violation. The dty0ty shall determine, in its sole
discretion, what shall constitute a material violation for purposes of revocation or
suspension under this Section 4.3. Material violations may include, without
limitation, the following:
(a) A misrepresentation or exclusion on any application for
approval, report or statement of revenues required to be submitted under this
Gaming Plan or under any other applicable federal, state or local law, rule,
regulation or permit.
26
(b) A non-complying purported transfer of a cardroom license
held or issued hereunder.
(c) Allowing persons other than those named in the application on
file with the . City, or otherwise previously approved by the City, to ownanhold
a financial interest in, or have direct management efauthority over, a cardroom.
(d) Maintaining a greater number of tables than the number
permitted by the license.
(e) Failure to strictly comply with any and all federal, state, and
local laws, rules, regulations, and permits applicable to the holding of a license
or the operation of a cardroom hereunder, including, without limitation local
land use and other code provisions.
(f) Failure to pay, when due, the amount of license taxfee owed
pursuant to Section 2.7 hereof.
(g) Citation of five (5) or more minor violations of this Gaming Plan
within any twelve (12) consecutive months.
(h) The conduct of criminal or dangerous activities at or
attributable to the licensed cardroom.
(i) Failure to pay, when due, the amount of any monetary fine
imposed pursuant to Section 4.2.1 hereof.
(j) Refusal to permitCity access to a cardroom for purposes of
auditing or inspecting some.
4.4 Inspection Rights.
The City shall have the right, at any time, without notice, to enter
into any cardroom operating within theCity and to conduct a reasonable
inspection of all areas of such cardroom, and/or any or all fixtures, equipment,
accounting materials or documents contained therein, in order to determine
whether or not such cardroom is being operated in accordance with this
Gaming Plan. This inspection right is in addition to the audit rights enumerated in
Section 2.7.4 herein.
5. General Provisions.
27
5.1 Definitions.
Except as otherwise expressly defined herein, capitalized terms,
and terms otherwise requiring definitions for proper interpretation, shall have the
meanings ascribed thereto by the Gaming Code.
5.2 Section Headings.
Section headings contained herein are for reference purposes only
and shall not be deemed to govern, limit, modify or in any manner affect the
scope, meaning or intent of the provisions of any section hereof.
5.3 Gaming Plan Amendments.
5.3.1_ City Council Approval Required. This Gaming Plan may be
revoked or amended, in whole or in part, at any time, after a public hearing, by
approval of the ' City Council, provided, however, different terms of
operation may be provided in the agreement required by Section 5.5 hereof,
below.
5.3.2_ Full Cost Recovery for Administrative Costs Associated with
modifications to gawdngQam1ng Plan.
Any Person requesting any modification to the Gaming Plan shall
be responsible for payment to the City of all actual administrative costs incurred
by the City including the cost of staff time, at the City's full cost recovery rate,
associated with the request for modification of the Gaming Plan. The chief of
police shall estimate the cost of City staff and other administrative costs in
connection with the requested modification and the Person shall deposit such
amount at the time of submitting his/her request for modification to the Gaming
Plan. If actual costs incurred exceed the initial deposit the chief of police may
require the applicant to make additional deposits to offset costs incurred or to
be incurred by the City. If the amount estimated is in excess of the cost incurred,
the difference will be refunded to the applicant at the end of the City's review.
5.4 Integrated Plan.
All provisions of this Gaming Plan are intended to be integral parts
of a comprehensive regulatory scheme. In the event that any material provision
hereof is finally determined to be invalid, then, as of the date of such
determination (a) the entire Gaming Plan shall, AB initio, become void and of no
28
effect, and (b) the Gaming Code provisions otherwise implemented or
superseded hereby shall become effective.
5.5 Agreement of Licensee to Accept Validity and Abide by all
Provisions.
Each licensee which holds or is issued a license hereunder, in
order to legally operate a cardroom within theCity must first enter into a
written agreement with theCity whereby, for the term specified therein, such
licensee agrees, on behalf of itself, any successors or assigns thereof, and any
and all parties with a financial interest in the license or the cardroom operated
thereunder, that such Persons (a) shall abide by any and all provisions of the
Gaming Plan; (b) acknowledge that all provisions of the Gaming Plan are valid
and enforceable by theCity against such Persons; and (c) waive and agree
not to pursue any and all claims or other action against theCity that any or
all provisions of the Gaming Plan were not legally adopted, valid or enforceable
with respect thereto. In consideration for licensee's commitments thereunder,
such agreement may also provide for a specified time period for card room
operations without being subject to City imposed changes to the Gaming Plan,
all as more specifically provided therein.
29
CARD ROOM OPERATING AGREEMENT
[Seven Mile Casino]
This CARD ROOM OPERATING AGREEMENT ("Agreement") is entered into
effective as of July 1, 2019 ("Effective Date")by and between Stones South Bay Corp., a
California corporation, dba Seven Mile Casino ("Operator"), and the CITY OF CHULA VISTA,
a chartered municipal corporation ("City") with reference to the following facts:
A. Operator holds a consolidated cardroom license ("License") issued by the City
that allows it to operate a cardroom within City limits subject to the terms and conditions of the
Chula Vista Gaming Plan ("Gaming Plan"); use of the License is also subject to any and all
requirements imposed by state law, the Chula Vista Municipal Code ("CVMC"), and local land
use permits issued pursuant thereto.
B. Pursuant to the terms of the License, the Gaming Plan, and the CVMC, Operator
currently owns and operates a cardroom known as "Seven Mile Casino" located at 285 Bay
Boulevard, Chula Vista California ("CV Cardroom")/
C. On July 23, 2019 pursuant to City Council Resolution 2019- (the "Gaming Plan
Resolution"), City approved certain modifications to the Gaming Plan, conditioned, among other
things, upon Operator, entering into an operating agreement with the City with respect to the
operations of the CV Cardroom consistent with the requirements of Gaming Plan Section 5.5.
D. In addition, in consideration of Operator's commitment to pay to the City any and
all amounts required by the Gaming Plan and to implement a"Percentage Payment Structure" as
provided for in Section 2.7.2.1.c of the Gaming Plan with respect to the CV Cardroom, City is
willing to provide Operator with the certainty of a five year operating term for the CV Cardroom,
with an extension option for an additional five years, on the terms set forth herein.
E. This Agreement implements the requirements imposed by Gaming Plan Section
5.5., and the Percentage Payment Structure, on terms mutually agreeable to the parties, all as
more particularly provided hereinbelow.
NOW, THEREFORE, in consideration of the above recitals, the mutual covenants and
conditions contained herein, and of other good and valuable consideration, the receipt and
sufficiency of which the parties hereby acknowledge, City and Operator hereby agree as follows:
1
1. Agreement to Abide by Gaming Plan. Operator agrees to abide by any and all
provisions of the Gaming Plan and acknowledges and agrees that each and every
provision of the Gaming Plan is valid and enforceable by the City with respect to the
Operator and the CV Cardroom. Operator makes this Agreement on its own behalf, on
behalf of any valid successors or assigns thereto, and on behalf of any and all parties
deemed by the City to have a financial interest in the License or the CV Cardroom
(collectively, the "Licensed Parties"). By signing this Agreement where indicated below,
the Licensed Parties agree to be bound by this provision.
2. Specific Agreement to Make Payments Required by Gaming Plan and this Agreement.
Operator agrees to pay to the City the "license fees"provided for in Section 2.7 of the
Gaming Plan, in the amounts and on the terms specified therein, or in the amounts and on
the terms specified under this Agreement if and when the Percentage Payment Structure
is triggered pursuant to Section 3 hereof.
Notwithstanding any legal challenge to this provision of the Gaming Plan, in consideration of
City's agreement to amend the Gaming Plan pursuant to the Gaming Plan Resolution, and City's
obligations under Section 4 of this Agreement, Operator further agrees: (a) to continue to make
such payments to the City in the same amounts and on the same terms specified in Section 2.7 of
the Gaming Plan or Section 3 hereof, as applicable; and (b) to meet and confer with the City to
develop and implement, if City deems necessary or appropriate, an alternative mechanism for the
continuation of such payments throughout the term of this Agreement, and thereafter.
3. Percentage Payment Structure.
3.1 In General. Upon the opening of the "Hotel" component of the Bayfront
Hotel and Conventional Center Project substantially as proposed pursuant to the terms of
that certain Disposition and Development Agreement dated May 7, 2018 between City,
the San Diego Unified Port District and RIDA Chula Vista, LLC, as it may be amended
from time to time (each a"Triggering Event"), in lieu of the "per table"license fees set
forth in Section 2.7.2.1 and 2.7.6 of the Gaming Plan (the "Base Rate License Fees"),
Operator agrees to pay to the City "Percentage Payment Structure" license fee, as
contemplated by Section 2.7.2.1.c of the Gaming Plan (the "Percentage Rate License
Fees").
3.2 Percentage Rate License Fees. Following the Triggering Event, the
amount of Percentage Rate License Fees due and payable for any time period of CV
Cardroom operations shall be equal to the product of the "CV Cardroom Gross
Revenues" (defined below) for such time period, multiplied by the "Applicable
Percentage" (defined below). For purposes of this Section, "CV Cardroom Gross
Revenues"means the total amount of any and all compensation received by Operator
from any games or gaming activities at the CV Cardroom over the applicable time period.
For purposes of this Section, the "Applicable Percentage"means a percentage figure
equal to a fraction, the denominator of which shall be the CV Cardroom Gross Revenues
for the twelve-month period immediately preceding the date of the Triggering Event, and
the numerator of which shall be the amount of Base Rate License Fees owed during that
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same twelve-month period under the Gaming Plan. For example, if(1) a Triggering
Event occurred on July 1, 2021, (2) the CV Cardroom Gross Revenues for the twelve
months preceding the Triggering Event equaled $ 20,000,000, and (3) the Base Rate
License Fees owed for such twelve-month period for 20 tables equaled $ 741,600, the
"Applicable Percentage"used for calculating the Percentage Rate License Fees under this
Agreement would be three point seven zero eight percent (3.708%) (741,600divided by
20,000,000 equals 3.708%).
3.3 Quarterly Installments; Reports. Operator shall pay the Percentage Rate
License Fees owed in quarterly installments based on CV Cardroom Gross Revenues for
each 3-month operating period during a July 1 through June 30 fiscal year. Quarterly
installments shall be due and payable as follows: October 15 (for the July 1 through
September 30 quarter); January 1 (for the October 1 through December 31 quarter); April
15 (for the January 1 through March 31 quarter); and July 15 (for the April 1 through
June 30 quarter). Each quarterly installment shall be accompanied by a written report
stating CV Cardroom Gross Revenues for the previous 3-month period, the calculation
used in determining the Percentage Rate License Fees owed for that quarter, and a
running total of CV Cardroom Revenues and Percentage Rate License Fees for that fiscal
year. The quarterly report shall be submitted in a form and with such back up
information as may be reasonably required the City's Finance Director. Late payments
shall accrue interest at a penalty rate of 10%per annum until paid.
3.4 Annual Statement; Reconciliation. Each August 1" Operator shall submit
to the City's Finance Director a certified financial statement of CV Cardroom Gross
Revenues for the previous fiscal year(July 1 through June 30) (the "Annual Financial
Statement"). The Annual Financial Statement shall be submitted in a form and with such
back up information as may be reasonably required by the City's Finance Director and
shall include, at a minimum (a) the Percentage Rate License Fees paid for that fiscal year,
(b) any proposed adjustments to such amount requiring additional payments or refunds,
as the case may be, based upon the now certified financials for the previous fiscal year,
and (c) any additional license fees payments required based upon the minimum payment
requirements set forth in Section 3.5 of this Agreement, below. The timing for reporting
and reconciliation process under this Section may be modified with the approval of the
City's Finance Director.
3.5 Alternative Minimum Payment Requirement. Notwithstanding the
occurrence of a Triggering Event, in the event that the Percentage Rate License Fees due
and payable for any fiscal year are determined by City after review of the Annual
Financial Statement to be less than the amount of Base Rate License Fees that Operator
would otherwise have been obligated to pay with respect to the CV Cardroom on a"per
table"basis pursuant to Sections 2.7.2.1 and 2.7.6 of the Gaming Plan (the "Alternative
Minimum Payment Requirement"), then the total amount of CV Cardroom license fees
due and payable for that fiscal year shall be the amount equal to the Alternative
Minimum Payment Requirement. Any additional amount of license fees owed but not
paid as a result of an Alternative Minimum Payment requirement determination shall be
due and payable within 30 days after such determination.
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3.6 Possible Adjustments Based Upon Law Changes. Notwithstanding the
foregoing, if a court of law or a state agency determines that games or gaming activities
that are currently licensed to be played at the CV Cardroom generating ten percent (10%)
or more of CV Cardroom Gross Revenues can no longer be played("Material Law
Changes"), the parties agree to meet and confer to evaluate possible alternative license
fee payment structures and/or amounts to take into account the possible negative impacts
such Material Law Changes are projected to have on CV Cardroom Gross Revenues.
The parties will use their best efforts to negotiate a new agreement prior to the effective
date of the Material Law Changes. Any such agreement shall be subject to City Council
approval in its sole discretion. In the event that the parties are unable to reach such an
agreement, if after the effective date of the Material Law Changes, CV Cardroom Gross
Revenues over any 365 day operating period decrease by 10% or more (the "Reduced
Gross Revenues Period") relative to the 365 day operating period immediately prior to
the effective date of the Material Law Changes (the "Pre-Law Change Gross Revenues"),
City agrees that until such time that CV Cardroom Gross Revenues are equal to or greater
than the Pre-Law Change Gross Revenues, the Alternative Minimum Payment
requirement in Section 3.5 of this Agreement throughout the duration of any Reduced
Gross Revenues operating period shall be replaced by a reduced Alternative Minimum
Payment requirement equal to the product of the per table Base Rate License Fees in
effect immediately prior to the date of the Triggering Event, multiplied by the number of
cardroom tables approved for operation during such Reduced Gross Revenues operating
period.
4. Five Year Operating Term.
4.1 In consideration for Operator's commitments under Section 2 hereof,
Operator shall have the right to operate a card room in the City for a period of five (5)
years (the "Vested Operating Term"). The Vested Operating Term shall commence on
the Effective Date hereof and shall expire on July 1, 2024. During the Vested Operating
Term, the City's right to unilaterally revoke or amend the Gaming Plan pursuant to
Section 5.3.1 thereof shall be suspended. Notwithstanding the foregoing, all other City
rights and remedies under the Gaming Plan, the CVMC, and any permits issued
thereunder, shall remain in full force and effect.
4.2 Operator rights under this Section 3 are expressly conditioned upon
(a) owning and maintaining its License in good standing; (b)remaining in full
compliance with any and all applicable federal, state, and local laws, regulations, and
permits; and(c)remaining in full compliance with the terms of the Gaming Plan, and the
terms and conditions of this Agreement.
4.3 If during the Vested Operating Term, the "Hotel" component of the
Bayfront Hotel and Conventional Center Project opens for business substantially as
proposed pursuant to the terms of that certain Disposition and Development Agreement
dated May 7, 2018 between City, the San Diego Unified Port District and RIDA Chula
Vista, LLC, as it may be amended from time to time, then the Vested Operating Term
shall be extended for an additional five (5) years ("Automatic Extension"). The parties
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agree to meet and confer in good faith regarding terms for an additional extension to the
Vested Operating Term. The City reserves the right to condition any additional extension
on modifications to the Gaming Plan including, without limitation, modifications or
increases to licensing requirements, license fees or taxes, operating standards, security
requirements and/or terms for enforcement. Any such additional extension beyond the
Automatic Extension may be granted or denied in City's sole discretion.
5. Indemnity, Waiver and Release.
5.1 Indemnity.
(a) To the maximum extent allowed by law, Operator agrees to
protect, defend, indemnify and hold harmless City and its officers, agents, employees,
attorneys, elected and appointed officials, including their respective successors and
assigns (collectively, "Indemnified Parties"), from and against any and all losses,
liabilities, costs, charges or fees (including reasonable attorneys' fees and court costs)
arising from any legal challenges to City's adoption of the Gaming Plan Resolution, or
the legal validity of any provision of the Gaming Plan or this Agreement; excluding,
however, any such legal challenge initiated or directed by one or more Indemnified
Parties. Any defense provided hereunder shall be with legal counsel of City's choice,
subject to Operator's reasonable approval. The provisions of this Section 4.1 shall
survive the termination of this Agreement, but shall be effective only as to those legal
challenges which are made during the term of this Agreement.
(b) This agreement to indemnify is conditioned on the representations
of the City Manager and the City Attorney of Chula Vista that, to their actual knowledge
to date, there have been no statements or threats indicating that there could be legal
challenges to City's adoption of the Gaming Plan Resolution, or the legal validity of any
provision of the Gaming Plan or this Agreement.
5.2 Release.
Operator hereby releases, acquits and forever discharges City and its officers, agents,
employees, attorneys, elected and appointed officials, including their respective successors and
assigns, from any and all claims, rights, demands, actions, obligations, and causes of action
(collectively, "Claims") arising out of or related to City's adoption of the Gaming Plan
Resolution, or the legal validity of each and every provision of the Gaming Plan as applied to
Operator, whether any such Claim is known or unknown, that Operator may now have or has
ever had, against the City, including, without limitation, any and all Claims for damages,
declaratory or injunctive relief or attorney's fees related thereto. It is understood and agreed that
this is a full and final release applying not only to all Claims defined above that are presently
known, anticipated or disclosed, but also as to all claims as defined above that are presently
unknown, unanticipated, and undisclosed in any way, and all rights or benefits that Operator may
now have, or may have in the future
With respect to all releases and waivers made by Operator under or pursuant to this
Agreement, Operator hereby waives the application and benefits of California Civil Code
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§ 1542 and hereby verifies that it has read and understand the following provision of
California Civil Code § 1542:
"A general release does not extend to claims that the creditor or releasing party
does not know or suspect to exist in his or her favor at the time of executing the release and
that, if known by him or her, would have materially affected his or her settlement with the
debtor or released party."
Operator's Initials:
This release shall not apply to claims which Operator may have that have arisen due to
the building permit/conditional use permit processes of the City by which Operator has applied
in Chula Vista.
6. Default and Remedies.
6.1 In General. Failure by either party to perform any of its obligations as
provided in this Agreement shall constitute an event of default under this Agreement. The
non-defaulting party shall give written notice of a default to the defaulting party,
specifying the nature of the default and the action required to cure the default. If the
default remains uncured for twenty (20) days after the date of such notice it shall be
deemed an"uncured default" and the non-defaulting party may pursue the remedies
ascribed thereto, as provided below. In the case of a default which cannot reasonably be
cured within 20 days, a party's failure to perform shall not constitute a default hereunder
provided the party undertakes to cure the failure promptly, and in any event within
twenty days, and diligently and continuously attempts to complete the cure as soon as
reasonably possible.
6.2 Exclusive Remedies.
(a) In the event of an uncured default by City, Operator's sole remedy
shall be for specific performance, injunction, or other equitable relief. Operator
acknowledges that City would not have entered into this Agreement if City could become
liable for monetary damages with respect to this Agreement. Consequently, City shall
have no liability for monetary damages for the breach of this Agreement to Operator or
any third party; provided, however, if Operator is the prevailing party in any action for
specific performance, injunction or other equitable relief, Operator may be entitled to
attorneys' fees as provided in Section 8.1, below. The above proscription against
Operator being awarded monetary damages shall not apply in the case where Operator
proves that City unlawfully exercised its police powers in the regulation of the operation
of the cardroom under the CVMC or the Gaming Plan.
(b) In the event of an uncured default by Operator, City shall have all
remedies available at law or in equity, including termination of this Agreement, specific
performance and monetary damages.
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7. Representation by Legal Counsel. Operator and its principals acknowledge and agree
that they have been represented by legal counsel in the preparation of this Agreement;
that they have read the agreement; that they are fully aware of its contents and of its legal
effect; that all agreements and understandings between the parties to the Agreement are
embodied and expressed herein; that they enter into this Agreement freely, without
coercion, and based on the parties' own judgment and not in reliance on any
representations or promises made by the City or any party; and that the parties exercising
this agreement on behalf of Operator and its principals are fully authorized to do so
without any further action by any other party or any governing board.
8. Assi ng ment. Operator shall not assign this Agreement or any of its rights or remedies,
in whole or in part, without the prior written consent of the City in each instance, which
may be withheld by the City in its sole discretion. For purposes of this Agreement, any
transfer by Operator of any interest in the License, or in itself, shall constitute an
assignment of this Agreement requiring City approval. Any assignment attempted by
Operator of its rights under this Agreement without City's prior written consent shall be
void ab initio.
9. General Provisions.
9.1 Attorneys' Fees. If any action at law or in equity is brought to enforce,
defend or interpret any provisions of this Agreement by any party hereto, the prevailing
party shall be entitled to recover all reasonable costs and expenses relating thereto,
including, without limitation, reasonable attorneys' fees, in addition to any other relief to
which that party may be entitled, subject to the limitations provided in Section 5.2 hereof.
9.2 Authority. Each party signing this agreement represents and warrants that
he/she/it has full and legal power and authority to do so, without any further action or
approval by any other party,
9.3 Entire Agreement; Amendment. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof, and any and all
other verbal or written agreements with respect to same are hereby superseded. Any
amendment hereto must be in writing and executed by all parties.
9.4 Further Assurances. The parties agree to perform such further acts and to
execute such further documents and instruments as may be reasonably required in order
to carry out the provisions of this Agreement and the intentions of the parties.
9.5 Inconsistency. The agreements, terms and conditions contained in this
Agreement are in addition to, not in lieu of, the terms and conditions contained in the
Gaming Plan, the requirements and regulations contained in the CVMC and any permit
issued thereunder(the "Additional Card Room Requirements"). To the extent of any
inconsistency between the terms of this Agreement and the Additional Card Room
Requirements, the terms of this Agreement shall govern.
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9.6 Headings. The headings of the Sections hereof are for convenience only
and shall not control or affect the meaning or construction of any provision of this
Agreement.
9.7 Notice. Any and all notices pertaining to this Agreement shall be in
writing and delivered to the parties hereto by personal delivery via courier service or
express mail, or by certified mail, postage pre-paid, at the addresses set forth above. All
notices shall be deemed given: (a) if sent by certified mail, three days after deposited in
the mail, certified and postage pre-paid; and(b) if delivered by hand, courier service, or
express mail, when delivered. Notices shall be addressed to the parties as follows:
If to Operator:
Masis A. Kevorkian
7727 Herschel Ave.
La Jolla, CA 92037
With a Copy To:
Heather U. Guerena
7727 Herschel Ave.
La Jolla, CA 92037
If to City of Chula Vista:
City of Chula Vista
Attn: City Manager
276 Fourth Avenue
Chula Vista, CA 91910
With a copy to:
City Attorney
276 Fourth Avenue
Chula Vista, CA 91910
9.8 No Waiver. A failure by the City to strictly enforce its rights hereunder
this Agreement in any instance shall not be deemed to be a waiver of any rights
hereunder. No delay in exercising any right, power or privilege hereunder or under any
applicable law or contract shall operate as a waiver thereof. No waiver shall affect any
default other than the default specified in the waiver, and said waiver, and said waiver
shall be operative as to the time and only to the extent therein stated.
9.9 No Partnership or Joint Venture. Nothing contained herein or inferred
herein shall be deemed or construed to create any partnership,joint venture, or other
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association by or between City and Operator. Neither City nor any agent of the City at
any time has agreed or consented to direct or participate in any of the investments,
business dealings,planning, or operation of Operator in any capacity.
9.10 Time of Essence. Time is of the essence of this Agreement and each of
the covenants or conditions that is to be performed at a particular time or within a
particular time.
9.11 Counterparts. This Agreement may be executed in multiple counterparts,
which together shall constitute one full and final agreement.
[NEXT PAGE IS SIGNATURE PAGE]
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SIGNATURE PAGE TO CARD ROOM OPERATING AGREEMENT]
IN WITNESS WHEREOF,the parties hereto have executed this Agreement as of the
Effective Date.
CITY: OPERATOR:
City of Chula Vista Stones South Bay Corp
By:
Gary Halbert Ryan E. Stone, President
City Manager
Approved as to Form:
Glen R. Googins,
City Attorney
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ACKNOWLEDGEMENT AND AGREEMENT BY HOLDERS OF FINANCIAL
INTERESTS IN THE LICENSE HELD BY OPERATOR
For purposes of this Agreement, as of the Effective Date, the undersigned each acknowledge and
agree as follows:
(a) Under the terms of the Gaming Plan, as amended by the Gaming Plan Resolution,
it/he/she is a holder of a financial interest in the License owned by Operator pursuant to which
Operator plans to operate a card room facility at 271 and 285 Bay Boulevard, Chula Vista,
California.
(b) Pursuant to the terms of Section 5.5 of the Gaming Plan, and as a necessary inducement
for City to enter into this Agreement, it/he/she, agrees to abide by any and all provisions of the
Gaming Plan, and acknowledges and agrees that each and every provision of the Gaming Plan is
valid and enforceable by the City with respect thereto.
(c) In the event Operator proposes to assign its rights under the Agreement to one or more of
the undersigned, and City approves such assignment in its sole discretion, it/he/she will be fully
bound,jointly and severally, by each and every provision of the Agreement.
UPDATED INFORMATION AND SIGNATURE LINES TO BE INSERTED
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