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HomeMy WebLinkAbout1992/08/25 Item 17 COUNCIL AGENDA STATEMENT Item 17 Meeting Date 08/25/92 Ordinance'A.5 f.t amending Sections 5.20 and 5.07 of the Chula Vista Municipal Code, the Cardroom Ordinance and Master Tax Schedule. Chief of Police D. . Ai'. . v...r ~t(, City Manager 5 (4/5ths Vote: Yes_No..x..) :,J (Referral Numbers 2599 and 2632) At the meeting of July 21, 1992, the City Council conducted a public hearing regarding a series of proposed amendments to Section 5.20 of the Chula Vista Municipal Code (CVMC) , the Cardroom Ordinance. Pursuant to said public hearing, staff was directed to prepare for further consideration six specific modifications to the Cardroom Ordinance. Additionally, Council directed staff to assess the Police Department's ability to enforce the amended Ordinance and identify related costs thereof. ITEM TITLE SUBMITTED BY REVIEWED BY Staff's position on the issue of gambling activity in Chula Vista remains unchanged from previous reports submitted to Council: that the proposed changes to the Cardroom Ordinance will significantly change the gaming environment that exists today in Chula Vista. The card room issue has generated a great deal of discussion throughout the County during the last month. This discussion has added to staff's apprehension with the proposal considered herein. This report will examine the changes Cardroom Ordinance amendments are likely to effect, their impact upon the Police Department and the community, and will detail staff's recommendations to reasonably mitigate such impacts. This report is accompanied by three potential Cardroom Ordinance revisions; staff is prepared to place any of the three alternatives on First Reading. The First Ordinance, referred to herein as Alternative 1, reflects staff's established position on the issue of expanded gambling activity by Chula Vista card rooms and corrects anachronisms (i.e. replacing Director of Public Safety with Chief of Police) of the Cardroom Ordinance. Two alternative Cardroom Ordinance amendments have also been prepared for Council's consideration. The Second Ordinance, referred to herein as Alternative 2, has all the provisions of Alternative 1 and also makes amendments to the CVMC that reflect Council direction given on July 21, 1992. The Third Alternative, referred to herein as Alternative 3, is identical to Alternative 2 except that it limits the games played in Chula Vista to those originally requested by the card room operators. Staff would prefer Alternative 3 over Alternative 2. RECOMMENDATIONS AND ALTERNATIVES: Alternative 1 Place a Cardroom Ordinance amendment on First reading that would: ~ Limit consolidation of card room licenses by any person, partnership, family or family members, or corporations and/or stockholders thereof to a maximum of two licenses. II-I Page 2 Item / 7 Meeting Date 08/25/92 Alternative 1 (continued) ~ Increase the maximum allowable number of card tables upon a premises licensed as a card room to twelve. ~ Extend permitted hours of operations to 9:00 A.M. until 1:00 A.M. ~ More clearly articulate the conditions under which a card room license may be revoked. ~ Correct miscellaneous anachronisms included in the existing Cardroom Ordinance. Alternative 2 Place Cardroom Ordinance and Master Tax Schedule amendments on First reading that, iu addition to the provisions of Alternative 1, would: ~ Allow all the games currently declared legal in California by the state Attorney General except pai-gow. ~ Require that card room operators shall provide the Chief of Police with the House Rules for any game played prior to that game being played in Chula Vista. ~ Provide that no charge in excess of $.50 per hand be charged to any player for the privilege of participating in any game. ~ Permit Jackpots as long as no additional charges are made to players therefor. ~ Modify associated card room interior signage requirements. ~ Increase the Quarterly Table Tax to $2,000. Alternative 3 Place Cardroom Ordinance and Master Tax Schedule amendments on First reading that are identical in effect to Alternative 2 except that it would limit the games permitted as follows: ~ Allow all the games currently declared legal in California by the state Attorney General except pai-gow, Super Pan-9, California 22 and pangiungue. BOARDS/COMMISSIONS RECOMMENDATION: None DISCUSSION: Pursuant to a Public Hearing held of July 21, 1992, staff was directed to return with proposed amendments to the Cardroom Ordinance with respect to six specific areas of card room operations. Staff was directed to prepare new language for the Cardroom Ordinance that would accomplish the following: prohibit consolidation of more than two Chula Vista card room licenses; include corporations, partnerships or any other entities with common financial interests in card room license purchase and consolidation restrictions; allow all games currently declared legal by the state Attorney General except pai-gow; extend permissible hours of operation; permit a per hand seat rental charge; and, allow jackpots. The staff position on this issue remains unchanged: any action taken to expand card room gambling operations will result in a local gaming environment which is significantly different than what exists today here in Chula Vista. The community has accepted the current gaming /7-2. Page 3 Item /7 Meeting Date 08/25/92 environment and this environment generally reflects the community's value system. Locally owned and operated card rooms provide a service to a small group of Chula Vistans -- a few well defined games are offered during limited hours. Introducing an array of gambling activities like those contained in Alternative 2, and to a lesser degree Alternative 3, will have sociological, criminal and code enforcement effects that will impact the Police Department. Excepting the increased revenue the City will receive from increased Table Taxes, the effects of Alternatives 2 and 3 will be significant to both the Police Department and community. Staff can identify several likely sociological impacts that may result from the adoption of Alternatives 2 or 3. A number of citizens who now play cards have indicated they will be intimidated by the new games. These persons have stated that the proposed games will, due to new players and higher stakes, be more stressful and therefore of less entertainment value to them. The allure of the new games will also make Chula Vista a destination for compulsive gamblers, at least to those who express their compulsion through playing cards. As is indicated in Attachment C, compulsive gamblers present significant risks to themselves, their families and the community. Additionally, a $.50 per hand charge will nearly double the fees paid by players for the privilege of playing cards in Chula Vista. This estimate is conservative because it is based upon fifteen (15) hands played per hour; staff research indicates some games can generate over thirty (30) hands per hour. These fees, some of which will find there way into the City's General Fund through increased Table Taxes, create an artificial redistribution of wealth that would not otherwise exist. Finally, by adopting either Alternative 2 or 3, the City will articulate a policy that directly conflicts with the San Diego District Attorney's position in opposition to any expansion of gambling activity. Given this, and the recent action by San Diego's City Council, the Police Department has concerns that such a conflicting policy will send a message to those interested in developing gaming facilities: that Chula Vista is willing to entertain such proposals. There are also some potential criminal impacts of adopting either of the two amendments which expand the games permitted. The Police Department is most concerned with an increase in "follow home" robberies. Given the increase in stakes associated with the new games, it is certain that criminal elements will have more incentive to prey on players. People who are having a winning run are easily spotted and targeted for robbery. This is a common phenomenon which has been observed in every community where high stakes poker is permitted (Excluding checks and raises, hold 'em has three rounds of betting, seven card stud hasfive rounds of betting. Since the current games have only two, excluding checks and raises, it can be deduced that, all other things being equal, pots will increase 50% to 150%. An eight player draw game with two rounds of maxi mum betting. $30.00, would generate a pot of $480. Therefore, the new games could generate pots of up to $1,200). The higher stakes will also create opportunities for small scale money laundering schemes whereby profits from illicit activities become gambling winnings. The expanded gambling permitted by Alternatives 2 and 3 will attract new gamblers to Chula Vista. Some of these persons will be compulsive or pathological gamblers, some will be people with a propensity to commit criminal acts and many will be law abiding persons. Staff can not estimate the impact this influx of persons will have on the volume of police calls for service beyond that described above. Such an unknown )7.3 Page 4 Item ) 7 Meeting Date 08/25/92 element is of concern to the Police Department. If Alternative 2 or 3 is adopted, the Police Department anticipates that it would assign a Police Investigator to: monitor compliance with the Cardroom Ordinance, follow-up on any complaints involving the card rooms, develop and implement pro-active victimization prevention programs, and, perform general investigative duties related to card rooms. The existing card rooms have excellent code compliance records, therefore, initial compliance activity would focus on proper signage and the development of a multi-phase consumer information program (including information on the new gambling activity and the rest of the Cardroom Ordinance, referrals to other sources of information on the games, transportation/escort resources and referrals for compulsive players). Being proactive in minimizing player victimization would be another priority if the additional gambling activities are approved. The Police Department is very concerned about residents who, for whatever reason must carry large amounts of cash. In a card room environment it is easy for criminals to spot a potential victim by identifying big winners. The Department will be committed to providing an appropriate level of resources to protect persons from preventable crimes. Finally, as experience is gained in enforcing the amended Cardroom Ordinance, the Department will seek to develop a comprehensive inventory of the impacts resulting from card rooms on the Chula Yista community. The Police Department will periodically review the Cardroom Ordinance enforcement program to ensure these goals are being met and/or the program is effectively serving the clientele it targets. PROYISIONS OF THE FIRST ORDINANCE Consolidation of Licenses Consolidation of card room licenses is currently permitted under Section 5.20.035 of the CYMC. The section reads as follows: "Notwithstatufing the provisions of Section 5.20.160 regarding the maximum number of tables on a premises.... a person having an interest or holding a license to any cardroom in the city may applyfor an additional available license or may acquire afinancial interest in an additional license. ..If such license is granted. the maximum number of tables permitted in the consolidation aftwo card rooms is twelve (12). The maximum number of tables permitted in the consolidation of three cardrooms is sixteen (16). The maximum number of tables permitted in the consolidation offour cardrooms is twenty (20). " "Consolidation occurs whenever a cardroom licensee or a person having afinancial interest in a cardroom obtains a license to operate an additional cardroom or acquires a financial interest in an additional cardroom. " Staff is recommending an amendment to Section 5.20.035 which will expressly prohibit the consolidation and/or ownership of more than two card room licenses. This amendment will specifically identify family, corporations, partnerships and/or any other entity with common financial interests, as being similarly precluded from consolidating and/or owning more than two cardroom licenses. Because of the "person having financial interest in a card room" clause of the Consolidation Permitted limitation (see second paragraph italics above), the Police Department currently ) 7.1./ Page 5 Item /7 Meeting Date 08/25/92 determines if an entity seeking to consolidate a license has any financial interests (owns or is part owner) in any other Chula Vista card room license. Under the proposed amendment, if there is any common financial or family interest or ownership, consolidation of more than two licenses will not be approved. This amendment will effectively prohibit the consolidation or ownership of more than two licenses by any person, family or business entity. Since, under the existing Ordinance, the Police Department makes a determination if applicants have any financial interest in another Chula Vista card room, the amendment as proposed would have no significant impact upon Police activities related to Cardroom Ordinance enforcement. Maximum Number of Tables Allowed on Premises Staff recommends that Section 5.20.160 be amended to effect consistency with 5.20.030. Section 5.20.160 limits the number of tables permitted at any premises licensed as a cardroom to eight. Since the CVMC currently allows up to twelve tables under two consolidated licenses, 5.20.160 would force an operator to permit two premises as cardrooms if slhe chose to operate all twelve tables. Each premises permitted as a card room has a minimum amount of requisite code enforcement activity associated with it. The Police Department proposes this change to reduce the number of potential card room premises, and therefore, the cost of enforcing the Cardroom Ordinance. The Police Department does not support the concept of allowing any more than twelve tables under two consolidated licenses. Hours of Operation Section 5.20.120 of the CVMC regulates the hours and days card rooms may operate. Staff recommends that card rooms be allowed to operate from 9:00 A.M. until 1:00 A.M. The staff recommendation represents a compromise that would allow for two additional hours of operation daily except Sunday (after 1:00 A.M.). This would increase operating hours by approximately 14% per day, Monday through Saturday. The staff proposal would provide residents with sixteen hours per day (Monday through Saturday) and ninety-six hours per week, or 57% of the hours in a week, to play cards. The limits proposed by staff give operators twelve additional operating hours each week which had the nearly the same effect as adding an additional day under the existing operating hours (10:00 A.M. to Midnight). These additional hours of operation will assist the card rooms in remaining viable within existing gambling regulations. The amendment as proposed would have a limited impact upon Police activities related to Cardroom Ordinance enforcement. Conditions for Revocation of Card Room Licenses Staff is proposing amendments that clarify the grounds upon which licenses will be revoked. These grounds include: allowing persons other than those listed on the application to own, have an interest in or manage a card room; having more tables operating than are licensed and/or are authorized by the license application; and, having a card room upon a premises that is unsuitable therefor. Additionally, staffis proposing an amendment that will allow the City to impose a fine in lieu of revoking a license. These amendments will assist both the City and the licensees by articulating more clearly how, when and why licenses may be revoked and/or licensees may be fined by the City. /7-5 Page 6 Item /7 Meeting Date 08/25/92 The remainder of this report will focus on Alternatives 2 and 3. Staff does not recommend either, but, was specifically directed to prepare such amendments in order to facilitate further Council discussion. Staff recommends that Council adopt Alternative I in order to avoid effecting significant changes in the local gambling environment. Such changes have mostly negative impacts as are described in detail in the first five paragraphs of this Report's Discussion. Staff prefers Alternative 3 to Alternative 2. Alternative 3 would prohibit the games of Super-Pan, California 22 and Panguigue in addition to Pai-gow. None of the games proscribed by Alternative 3 were included in the original Card Room Operator's proposal and each has impacts upon local law enforcement that, like Pai-Gow, exceed those of the poker games allowed under Alternative 2. PROVISIONS OF THE SECOND ORDINANCE Games Permitted Section 5.20.110 of the CVMC permits "No card games except draw poker, lo-ball poker, or contract or auction bridge may be played... the game of panguingue is specifically prohibited." Alternative 2 includes an amendment to Section 5.20.110 that would allow any game, or family of games, currently declared legal by the state Attorney General with the exception of pai-gow. Under Alternative 2, all forms (high, low, high-low split etc...) of the following games would be permitted in Chura Vista: draw poker, seven-card stud poker, hold-em poker and double- handed poker. Additionally, the games of Super Pan-9, California 22 and pangiungue would be available to the operators. The choice of games to be offered within this array would be left to the operator. While the objective of these games is similar from club to club, most can be slightly altered to fit the club's clientele and their game specific preferences. Pai-Gow is a high stakes, asian poker game that has been linked to a variety of criminal activities in other jurisdictions (please reference the Wall Street Journal Article dated June I, 1992 and other staff correspondence with Council on this subject). Super Pan is another high stakes game with the objective being to obtain a hand with cards totaling nine (9). panguigue is not currently permitted by the Cardroom Ordinance and most clubs do not offer it simply because there is no demand for it. California 22 is a blackjack type game that pits player against player rather than player against the house. The objective of California 22 is to acquire a hand which totals as close to twenty-two (22) as possible. Providinl! House Rules to City and Interior Sil!nage Requirements Alternatives 2 and 3 both include staff proposed amendments to Section 5.20.200 of the CVMC that provide for: I) rules for any game offered or played in a Chula Vista card room be set in advance of the game being played or offered; 2) a written copy of such "house rules" be provided annually to the Chula Vista Police Department; and, 3) such rules be clearly and thoroughly displayed in a place of prominence that is visible from any seat at any card table on the premises. The exact wording in Alternative 2 and 3 will vary based solely upon the games permitted by that Alternative. The intent and effect of the proposed amendments is to ensure that both the City and patrons of the card rooms are apprised in advance of the games being 17-1., Page 7 Item 17 Meeting Date 08/25/92 offered, the house rules for the games and whether or not a jackpot is being offered in association with a particular table or game. Per Player/Per Hand Charges Section 5.20.190 of the CVMC defines the rate at which players may be charged for participating in games at a Chula Vista cardroom. Since this component of the operator's proposal is tied specifically to the new games, Alternatives 2 and 3 include an amendment to change the method of collecting charges from card players. The card room operators have requested they be permitted to collect a per hand charge, not to exceed $.50 per player per hand. This method of collecting playing charges is more prevalent throughout the county and gaming industry. This per hand charge would be the only revenue source available to card room operators from a gaming enterprise. The per hand charge appears more equitable in that every player pays the same amount to play in a game. Under the per hour method, a player can participate in a few hands, get up and miss the hourly charge call, then sit back down and continue playing without paying. It should be noted that the amount of revenue generated under this method varies based on the game being played and the skill of the dealer. Dealer skills are generally measured by the speed, precision and efficiency with which the cards are delivered to the players -- faulty deals cost operators money and customers. Attachment A, which is predicated upon conservative estimates of card room operational efficiency indicates that the cost per player, per hour will increase from $4.00 to an average of $7.50 (+87.50%). In other words, a table operating for one hour with six players will generate $45.00 in revenue for the card room operator an increase of $21.00 compared with the existing Ordinance. Attachment A also indicates that using a constant set of assumptions regarding card room operating efficiency, a table operating under the proposed Ordinance amendment would generate over $100,000 in additional gross revenue for the card room operator. Finally, based on that same set of assumptions, and assuming that a card room establishment will operate at about 25 % of total capacity, the proposed amendment will enable the card room owners to generate nearly $450,000 in annual gross revenue. Jaclq>ots Section 5.20.180 of the CVMC currently prohibits operators from offering jackpots. Alternatives 2 and 3 include an amendment allowing jackpots. The operator's see jackpots as an incentive to attract marginal customers and keep regular customers longer. Customers will not be charged specifically for the purpose of funding jackpots. The jackpot is awarded to two players achieving unusually high hands (typically when two hands exceed the three king full- house) during one deal of the cards. In order to create an image of more winners, seventy five per cent of the jackpot award goes to the player with the second best hand and the remaining twenty five per cent goes to the player with the winning hand. Some of staff's original concerns have been mitigated by the fact that under the operator's proposal, jackpots will not be a revenue center. However, the card room industry argued strenuously, and effectively in the state Attorney General's opinion, that jackpot poker requires more skill to be successful at than poker without 17-7 Page 8 Item ) 7 Meeting Date 08/25/92 jackpots. If this is the case, the Police Department expects a different type of gambler will be attracted to, and will make appearances in, Chula Vista's card rooms. These "new" players introduce an element of the unknown in terms of assessing sociological, criminal and code enforcement impacts upon the City. Table Tax Increase Associated with Additional Games Section 5.07.030 of the CVMC, The Master Tax Schedule, requires card room operators to pay a $90.00 per table Card Room Table Tax quarterly to the City. In the event that the additional games are added, Alternatives 2 and 3 include an amendment to the Master Tax Schedule raising the Card Room Table Tax to $2,000 quarterly per table. Chula Vista does not take a proportion of the card room's gross receipts, therefore, Chula Vista card room's pay a tax rate that is significantly below that of other San Diego county cities where card rooms are permitted. San Diego's card rooms permit only the games currently approved in Chula Vista: high and low draw poker and auction/contract bridge. Currently, licenses can not be transferred which, in effect, will sunset card rooms in the city of San Diego barring an ordinance revision there. Oceanside permits all games legal in California and card room's can operate twenty-four-hours- a-day, seven-days-a-week. Carlsbad currently has only one licensed card room. Licenses can not be transferred in Carlsbad either. Keeping in mind these differences, the following table is presented for comparable card room operations in each of the other cities in San Diego county with operating card rooms: San Diego, Oceanside, Carlsbad and Chula Vista. San Diego $9,409 Oceanside $2,000 & 4% of gross revenue Carlsbad $2,160 & 8% of gross revenue Chula Vista Current: $2,160 As demonstrated by Attachment A, allowing the games specified in the second Ordinance has the potential to significantly increase card room revenues. Staff recommends that the Table Tax be increased to $2,000 per quarter based upon the increased revenue and potential increases in required Police enforcement activity described below. This assessment will be made on any card table kept on the premises licensed as a card room. Although the original staff recommendation called for a $15,000 per license annual tax, this recommendation has been revised for three reasons. One, the per table method is more equitable for the operators in that it they are not charged for non-operating tables. Second, the original $15,000 per license was recommended as a means, along with reducing the number of permitted tables, of discouraging license consolidations. Third, the per table method will generate more Table Tax Revenue under a wider array of card room operating conditions. Staff evaluated several alternative methods employed by other cities to tax card rooms: a flat or escalating table tax; a flat card room tax; a flat card room tax plus a flat or escalating percentage of gross revenues; or some variation on these methodologies. Each method has its proponents and detractors, as well as, positive and negative aspects for both the city and the card room operator. A flat table tax increase appeals to staff for four reasons: I) it is predictable; 2) there /'7~3 Page 9 Item /7 Meeting Date 08/18/92 is no accounting component; 3) it is easily enforced; and 4) it is equitable for the operators. The predictability makes revenue forecasting less complicated and more accurate and, therefore, assists in the budget development process. Calculating proportions of gross revenue requires significant staff time to critically review accounting documents from each of the card room operations on a quarterly basis. Since all tables must be visible from the street, the proposed methodology could be enforced through random visual inspections of the two card room establishments (officers should observe only the number of tables currently licensed in the premises). Under the revised Table Tax recommendation, each table licensed would generate $8,000 in Cardroom Table Tax revenue annually. Given the current licensing scenario, the table tax increase proposed by staff would generate $112,000 in table tax revenue -- an increase of $109,840. Of this amount, $48,000 would be from the six tables licensed by the Vegas Club and $64,000 would be from the eight table licensed by the Village Club. If both establishments were to license the maximum of eight tables, City Table Tax revenues would total $128,000. If clubs chose to operate fewer tables, the club's tax liability would be reduced as would its potential to generate revenue for the operator. Attachment B, which compares the current Card Room Table Tax with the Operator's and Staffs proposals, demonstrates that if all four licenses were operated independently and each licensed the maximum of eight tables, City revenue under this proposal would be $256,000. It is anticipated that the revenue generated via this methodology, under the existing card room licensing and gaming level scenario, will offset the cost of enforcement activities known at this time to be associated with Alternative 2 or 3. Provisions of Alternative I included in Alternative 2 Alternative 2 also includes each of the provisions contained in Alternative I that strictly limit license consolidation, increase the maximum number of tables on a premises licensed as a card room, extending the permitted hours of operation, clarify the conditions under which card room licenses may be revoked or licensees fined and correct anachronisms in the current Ordinance. Such provisions are included in each of the alternatives presented herein because they are not tied to specific increases in the types of gambling activities permitted. PROVISION OF THE THIRD ORDINANCE Games Permitted Alternative 3 includes an amendment to Section 5.20.110 that would allow any game, or family of games, declared legal by the state Attorney General with the exception of pai-gow, Super Pan, California 22 and pangiungue. Alternative 3 is consistent with the Card Room Operator's original proposal to staff and Council. Under the proposed language, all forms (high, low, high- low split etc...) of the following games would be permitted in Chula Vista: draw poker, seven- card stud poker, hold-em poker and double-handed poker. The choice of games to be offered within this array would be left to the operator. Staff offers Alternative 3 in preference to Alternative 2 for several reasons. One, limiting the J1-c:, Page 10 Item 17 Meeting Date 08/18/92 games as proposed in Alternative 3 retains the traditional poker-only philosophy. Also, incorporating the additional games included by Alternative 2 exacerbates the sociological, criminal and code enforcement issues described above and would create card rooms with more of a Las Vegas look and feel. Furthermore, these were not originally proposed by the card room operators nor, to the best of staff s knowledge, are they desired by the operators at this time. Alternative 3 Identical in Effect to Alternative 2 Except for Games Permitted Alternative 3, with the exception of the games permitted, is identical in effect as Alternative 2. It provides for: strictly limited license consolidation; increasing the maximum number of tables on a premises licensed as a card room; extending the permitted hours of operation; clarifying the conditions under which card room licenses may be revoked or licensees fined; correcting anachronisms in the current Ordinance; the filing of house rules with the Police Department prior to games being offered; the collection of a maximum $.50 per hand charge for playing; permits jackpots to be offered; modification of interior signage requirements; and, an increase in card room Table Taxes. FISCAL IMPACT: None associated with Alternative 1. The adoption of either Alternative 2 and 3 as proposed will increase Table Tax revenues by $109,840 under the current licensing scenario. Each additional table licensed will generate and additional $8,000 in annual Card Table Tax revenue. Table Tax revenue is deposited into the City's General Fund. / '7 -II) ATTACHMENT A Operator's Proposal $0.50 Revenue to Operator per hand per player 6 Players (8 player maximum) $3.00 Revenue to Operator per hand 15 Average number of hands per hour -- all various games $45.00 Revenue to Operator hourly, per table 16 Hours per day $720.00 Revenue to Operator per day 6 Days per week 52 Weeks in a year $224,640 Revenue per table per year 8 Tables per license $1,797,120 Revenue to Operator at 100% capacity $449,280 Revenue to Operator at 25% capacity $7.50 Revenue per player per hour Current Ordinance Provision $4.00 Revenue per player per hour 6 Players per game 16 Hours proposed per day (9:00 am to 1:00 am) $384.00 Revenue to Operator daily 6 Days open per week $2,304.00 Revenue to Operator per week 52 Weeks in a year $119,808.00 Current revenue per table per year $104,832.00 Gross Revenue Increase Per Table Under Proposal 17"'11 ATTACHMENTB COMPARISON OF PROPOSED QUARTERLY TABLE TAXES AUGUST 18, 1992 Tables Current Ordinance Operator's Proposal Staff Proposal 1 $90 $450 $2,000 2 $90 $450 $2,000 3 $90 $600 $2,000 4 $90 $600 $2,000 5 $90 $825 $2,000 6 $90 $825 $2,000 7 $90 $1,125 $2,000 8 $90 $1,200 $2,000 Quarterly $720 $6,075 $16,000 Annually * $11,520 $97,200 $256,000 * Assumes that all four licenses operate at maximum capacity, 8 tables each, 32 tables total. 17~/2. ATTACHMENT C Interviews of recognized experts; Richard J. ROSENTHALL, M.D.. Rachael A. VOLBERG, Ph.D., and Durand F. JACOBS, Ph.D., regarding compulsive gambling and the impact on society. The first individual interviewed was Richard J. ROSENTHALL, M.D. Dr. ROSENTHALL is a member of the California Council on Compulsive Gambling and has written several articles, including "The Cost of Compulsive Gambling," "pathological Gambling" and "The Pathological Gambler as a Criminal Offender." Dr. ROSENTHALL stated that gambling is a tremendous problem within the Asian community but most Asians are reluctant to seek help. According to Dr. ROSENTHALL in 1990, the Maryland State Task Force on Gambling Addiction determined their state lost $1. 5 billion through lost work productivity, money stolen, embezzlement, bad checks, and unpaid taxes from an estimated 50,000 compulsive gamblers. California has an estimated 300,000 compulsive gamblers. T'le American Insurance Institute estimates that 40% of all white collar crime is gambling related. One in five compulsive gamblers has attempted suicide. One out of four was involved in an auto accident during the worst of their gambling. There are multiple effects on the family according to Dr. ROSENTHALL; the most obvious of which is lack of financial support, neglect and divorce. Thirty-seven percent (37%) of compulsive gamblers physically abuse their children. The spouse of a compulsive gambler is three times more likely to commit suicide. The children of compulsive gamblers do worse in school than their peers and are more apt to have alcohol, drug and gambling problems and eating disorders. They attempt suicide twice as often as their classmates. pathological gambling and substance dependence are frequently associated. Compulsive gamblers are prone to develop stress related physical disorders. Studies of criminal behavior by pathological gamblers show bad check writing was most common, followed by loan fraud, embezzlement and employee theft. Pathological gamblers do not consider the consequences of their behavior according to Dr. ROSENTHALL. States are starting to accept responsibility and currently twelve states have funded programs in public education, research, training and treatment. There are very few qualified counselors and therapists. Clinics, residential programs, half way houses and alternative sentencing programs need to be developed. Workshops are needed for attorneys and judges, probation and parole officers, prison administrators and counselors. Rachael A. VOLBERG, Ph.D., was also interviewed regarding social issues related to gambling. Dr. VOLBERG is a principal in Gemini 11--/3 ATTACHMENT C Page 2 Research, Albany, New York. Association for the study of Council on Problem Gambling. She is a member of the International Gambling and a member of the National Dr. VOLBERG indicated there is a widespread belief among clinicians working with pathological gamblers that increased opportunities to wager lead to increased numbers of problem and pathological gamblers. The starting age of those who become problem gamblers, according to a 1989 research, 23% are fourteen (14) years of age, 23% are between fifteen (15) and seventeen (17) years of age, 38% are between eighteen (18) and twenty-four (24) years and 15% are over twenty-five (25) years. Types of wagering when these individuals started gambling are: sports, 42%; cards, 33%; and slot machines, 17%. It is important to address the social and economic costs associated with the legalization of gambling according to Dr. VOLBERG. The prevalence rate of problem and pathological gambling should be assessed. Residents must be educated about the potential problems associated wi th gambling. Treatment services must be provided for those individuals who experience problems with their gambling and insure that adequate and enduring funds for such efforts are made available. Another expert interviewed was Durand F. JACOBS, ph.D. Dr. JACOBS is a diplomat in Clinical Psychology and is a member of the American Board of Professional Psychology. He is also Vice President, '91 and '92, of the National Council on Problem Gambling, New York, New York. According to Dr. JACOBS, "Public understanding of gambling problems is where our understanding of alcoholism was forty or fifty years ago." Studies indicate that in families in which parents gamble, youths are likely to follow suit. The Atlantic City High School newspaper conducted a survey of ninth to twelfth grade students. The survey revealed that 64% of legally underage students had snuck in and gambled in casinos, mostly at slot machines, but 25% played Blackjack and 25% were served alcoholic beverages. The proliferation of legalized gambling and its impact on society is alarming and startling. Pathological gambling is a psychological, social, and economic problem of great magnitude. Public and private interests have a moral responsibility to address the problems of gambling. Dr. JACOBS states, "It is a special responsibility for the state to address the dark side of gambling so as not to harm its citizens. If the state doesn't do it on a preventive or early intervention basis, it's going to pay the price in terms of criminal activities, health costs, destruction of families, and in lower productivity." The costs to address social problems attributed to gambling greatly outweigh new revenues derived from gambling operations. 17 #/ If ALTERNATIVE NO.1 ORDINANCE NO. 2. 5 'J...$' A AN ORDINANCE OF THE CITY OF CHULA VISTA AMENDING CHAPTER 5.20 OF THE CHULA VISTA MUNICIPAL CODE RELATING TO CARDROOMS SECTION I: That sections 5.20.030, 5.20.035, 5.20.040, 5.20.060, 5.20.120, 5.20.160 and 5.20.210 of Chapter 5.20 of the Chula vista Municipal Code are hereby amended to read as follows: 5.20.030 License-Number permitted and transferability. The number of licenses authorized for issuance under the provisions of this chapter shall be limited, based upon the population of the city as shown upon the population certified by the state Department of Finance. The number so authorized shall be one per forty thousand residents or any fraction thereof. All such licenses shall be issued in accordance with the provisions of this chapter; provided, however, those persons holding a license to conduct cardroom operation upon the effective date of this section may continue to hold such licenses subject to the revocation provisions set forth in this chapter. Any license issued pursuant to this chapter may be transferred upon the approval of the chief of police to a person meeting all of the requirements for the initial issuance of such a cardroom license, subject to the ratification of the city council which approval mav be withheld in the sole discretion of the Chief of Police and which ratification mav be withheld in the sole discretion of the citv Council. and such approval and ratif ication mav. but is not required to. be based entirelv or in part on the assessment bv the Chief of Police or. as applicable. the citv Council. of the character of the proposed licensee. or when. in the opinion of the approvinq or ratifvinq entitv. there appears to be qood cause whv such person should not operate a cardroom; provided, however, that with the exception of those licenses which have been issued prior to the effective date of the ordinance set forth in this section and section 5.20.040, no license may be so transferred unless the holder thereof has been operating a cardroom for three years at a fixed location in the city. For the purposes of this section. it shall be deemed to be a transfer of a license requirinq approval of the Chief of Police and ratification bv the citv Council if a shareholder of a corporate licensee transfers anv shares in the corporate licensee. It shall also be deemed to be a transfer of a license requirinq approval of the Chief of Police and ratification bv the citv Council if a partner of a partnership licensee transfers all or anv portion of his or her partnership interest. 1 /7A ~/ \'a< 5.20.035 Consolidation-Permitted. Notwithstanding the provisions of section 5.20.160 regarding the maximum number of tables on premises, the citv Council mav. in their sole discretion. qrant one additional license. but no more than one. to a person having an interest in or holding a license to any cardroom in the city may apply fa]!" aR aaai~iaRal availa191e lieeRae a]!" may acC}uire a fiRaRcial iRtcrcat iR aR additioRal lieeRse but then onlY in accordance with the procedures set forth in this chapter and onlY if the total number of licenses issued. includinq consolidated licenses as two separate licenses. does not exceed the maximum permi tted bY Section 5.20.030. If such application for an additional sinqle license is granted, the maximum number of tables permitted in the consolidation of two cardrooms is twelve (12). The mauimbllB. RliIR19cr sf t.aeleD 19crmit.t.cel iR UiC eORaaliaa~ioR of ~h]!"ee ea:E'a:E'ooma ia aixtccR (16). Thc mauimllm Rumlge]!" af taelca permi~~ea iR thc cORaolidatioR of four ca]!"araama ia ~\leR~Y (20). No licensee may obtain or have issued more than two licenses. A person shall be deemed to have an interest in. or hold. an existinq license if said person is a desiqnated licensee. if they are presently married to an existinq licensee. if they are the parent or child of an existinq licensee. if thev own shares in a corporation that owns a license or has a partnership interest in a license. if they own a partnership interest in a partnership that has a license or owns shares in a corporation that owns a license. consolidation occurs whenever a cardroom licensee or a person having a financial interest in a cardroom obtains a license to operate an additional cardroom or acquires a financial interest in an additional cardroom. 5.20.040 License-Initial issuance procedure. E}!ccP~ far Clda~iREj" liecRaccG aa Gct forth iR Gee~iaR 5.2e.939, aAll applieaRta for availa191e licensegs shall comply with the provisions of this chapter. Any applicants requesting a license as permitted in section 5.20.030 shall pay a nonrefundable fee as presently designated, or as may in the future be amended, in the Master Fee Schedule, Section 5.20.040, to cover the cost of investigation. No applicant requesting a license pursuant to this section may have any financial or other interest as set forth in Section 5.20.035 in any other applicatioR eciREj" sul9mi~~ea ~a al9~aiR a--cardroom license. or application pendinq therefore. Each application shall be totally independent and unassociated with any other application being submitted for the purpose of obtaining such a license. The initial period for issuance of new cardroom licenses shall be the month of May, 1977, and in the month of May in subsequent years should there be additional licenses available. After the termination of the open period in May, no further li- 2 1714 -2- censes shall be issued until the succeeding open 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 5.20.030, based upon population, the airee~er ef paelie safety Chief of Police shall conduct a public lottery to select those applicants who shall be investigated to determine if they are qualified to be issued any available cardroom licenses as approved by the aireeter ef publio aafety Chief of POlice, subject to ratification of the city council. Upon the issuance of available cardroom licenses, the aireeter ef puelie safety Chief of Police shall authorize the refund of any application fee to any persons who were not subject to investiga- tions. 5.20.060 License-Application prerequisites. required-Con tents-Issuance An applicant for a cardroom license shall submit his appli- cation to the chief of police, which application shall be under oath, and shall include, among other things, the true names and addresses of all persons financially interested in the business. The past criminal record, if any, of all persons financially or otherwise interested in the business shall be shown on such appli- cation. The term "persons financially interested" shall include all persons who share in the profits of the business, on the basis of gross or net revenue, including landlords, lessors, lessees, the owner or owners of the bui lding , fixtures or equipment. The application shall also be accompanied by fingerprints of persons financially interested. 'Fhe eRief of polioe may aeflY aflY applieafl~ for a carareem lieeflae a liocflDc to operate SUCR cararoom whefl, ifl tRD opifliefl ef ~Re oRief of poliee, tRere appears te be ~ooa cauas ':RY saoR parDefl sReala flot operate a cararoom. 5.20.120 Hours and days of operation. No card table licensed under the provisions of this code which is maintained or operated in connection with any other business shall be used for any card game from miafli~Rt one o'clock a.m. to ~ nine o'clock a.m. of any day. All places which are devoted exclusively to the operation or maintenance of a card table bus- iness shall be kept closed each day from miafli~flt one o'clock a.m. to ~ nine o'clock. No card table shall be used for any card game on sunday. 5.20.160 Maximum number of tables on premises-Arrangement. No more than eight tables shall be permitted at any premises licensed as a cardroom pursuant to this chapter. except that at cardrooms operatinq under two consolidated licenses. twelve tables shall be permitted, and said playing area shall be located on the 3 1714 '..3 ground floor and the tables shall be arranged so that the playing surface of each table shall be visible from the sidewalk or pUblic walk immediately adjacent to the cardroom. The holder of a cardroom license may appeal the visibility requirement to the zoning administrator. 5.20.210 License-Revocation criteria. Licenses for cardrooms may be revoked in the manner and for the reasons set forth in section 5.02.180 et seq. of this code and for the farther reaaOR eeRsistiR~ of a BnY-violation of any of the provisions of this chapter. The citv may. but is not reauired. to imcose a fine in lieu of revocation. SECTION II: This ordinance shall take effect and be in full force on the thirtieth day from and after its adoption. F: \hom.e\attomey\cardrm3 rm by JJ Presented by Richard P. Emerson, Chief of Police , City 4 /7A ,'/ ALTERNATIVE NO.2 ORDINANCE NO. '-6 ')..t' .PJ AN ORDINANCE OF THE CITY OF CHULA VISTA AMENDING CHAPTER 5.20 AND SECTION 5.07.030 OF THE CHULA VISTA MUNICIPAL CODE RELATING TO CARDROOMS 5.20.060, 5.20.200 Code are SECTION I: That sections 5.20.030, 5.20.035, 5.20.110, 5.20.120, 5.20.160, 5.20.180, and 5.20.210 of Chapter 5.20 of the Chula vista hereby amended to read as follows: 5.20.040, 5.20.190, Municipal 5.20.030 License-Number permitted and transferability. The number of licenses authorized for issuance under the provisions of this chapter shall be limited, based upon the population of the city as shown upon the population certified by the state Department of Finance. The number so authorized shall be one per forty thousand residents or any fraction thereof. All such licenses shall be issued in accordance with the provisions of this chapter; provided, however, those persons holding a license to conduct cardroom operation upon the effective date of this section may continue to hold such licenses subject to the revocation provisions set forth in this chapter. Any license issued pursuant to this chapter may be transferred upon the approval of the chief of police to a person meeting all of the requirements for the initial issuance of such a cardroom license, subject to the ratification of the city council which approval mav be withheld in the sole discretion of the Chief of Police and which ratification mav be withheld in the sole discretion of the citv Council. and such approval and ratification mav. but is not reauired to. be based entirelv or in part on the assessment bv the Chief of Police or. as applicable. the citv Council. of the character of the proposed licensee. or when. in the opinion of the approvina or ratifvina entitv. there appears to be aood cause whv such person should not operate a cardroom; provided, however, that with the exception of those licenses which have been issued prior to the effective date of the ordinance set forth in this section and section 5.20.040, no license may be so transferred unless the holder thereof has been operating a cardroom for three years at a fixed location in the city. For the purposes of this section. it shall be deemed to be a transfer of a license reauirina approval of the Chief of Police and ratification bv the citv Council if a shareholder of a corporate licensee transfers anv shares in the corporate licensee. It shall also be deemed to be a transfer of a license reauirina approval of the Chief of Police and ratification bY the city Council if a partner of a partnership licensee transfers all or any portion of his or her partnership interest. 1 ) 7.8 -I "~ 5.20.035 Consolidation-Permitted. Notwithstanding the provisions of section 5.20.160 regarding the maximum number of tables on premises, the citv Council mav. in their sole discretion. qrant one additional license. but no more than one. to a person having an interest in or holding a license to any cardroom in the city Illay aIlIlly fer aa aaaitioaal available lieerllJe or ma~i acquire a f iFlaCleial iaterest. in all aeleli'tiaRal lisease but then on Iv in accordance with the procedures set forth in this chapter and onlv if the total number of licenses issued. includinq consolidated licenses as two seoarate licenses. does not exceed the maximum oermitted bv section 5.20.030. If such application for an additional sinqle license is granted, the maximum number of tables permitted in the consolidation of two cardrooms is twelve (12). Tae Illauimalll aamber ef tables Ilerlllitt.ea ia tae seaseliaatioa ef taree eararoolllo is siuteea (IE;). 'Pac Illauilllulll aUlllber ef tableo Ilerlllittea ia tae eoaooliaatioa of four carareellls io to./enty (28). No licensee mav obtain or have issued more than two licenses. A oerson shall be deemed to have an interest in. or hold. an existinq license if said oerson is a desiqnated licensee. if thev are oresentlv married to an existinq licensee. if thev are the oarent or child of an existinq licensee. if thev own shares in a corooration that owns a license or has a oartnershio interest in a license. if thev own a oartnershio interest in a oartnershio that has a license or owns shares in a corooration that owns a license. Consolidation occurs whenever a cardroom licensee or a person having a financial interest in a cardroom obtains a license to operate an additional cardroom or acquires a financial interest in an additional cardroom. 5.20.040 License-Initial issuance procedure. Except fer euiotin~ lieeasees as set forta ia cectioa 5.20.038, aAll applicaats fer available license~s shall comply with the provisions of this chapter. Any applicants requesting a license as permitted in section 5.20.030 shall pay a nonrefundable fee as presently designated, or as may in the future be amended, in the Master Fee Schedule, section 5.20.040, to cover the cost of investigation. No applicant requesting a license pursuant to this section may have any financial or other interest as set forth in section 5.20.035 in any other applisatiea beia~ submittea to obtaia a--cardroom license. or aoolication oendinq therefore. Each application shall be totally independent and unassociated with any other application being submitted for the purpose of obtaining such a license. The initial period for issuance of new cardroom licenses shall be the month of May, 1977, and in the month of May 2 /713J 2. in subsequent years should there be additional licenses available. After the termination of the open period in May, no further li- censes shall be issued until the succeeding open 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 5.20.030, based upon population, the direeter ef ~~elic safety Chief of Police shall conduct a public lottery to select those applicants who shall be investigated to determine if they are qualified to be issued any available cardroom licenses as approved by the airector ef ~~elie safety Chief of Police, subject to ratification of the city council. Upon the issuance of available cardroom licenses, the direeter ef ~uelie safety Chief of Police shall authorize the refund of any application fee to any persons who were not subject to investiga- tions. 5.20.060 License-Application prerequisites. required-Contents-rssuance An applicant for a cardroom license shall submit his appli- cation to the chief of police, which application shall be under oath, and shall include, among other things, the true names and addresses of all persons financially interested in the business. The past criminal record, if any, of all persons financially or otherwise interested in the business shall be shown on such appli- cation. The term "persons financially interested" shall include all persons who share in the profits of the business, on the basis of gross or net revenue, including landlords, lessors, lessees, the owner or owners of the building, fixtures or equipment. The application shall also be accompanied by fingerprints of persons financially interested. Tae eaief ef ~elice may deny any a~~lieant for a earareem lioenoe a licenoe ~e sperate ouch saLeroom ;.~cn, iR the o~inien ef tae chief ef ~elice, taere a~~ears te ee ~oea ea~sc '-Thy such I3ersen saould not e~erate a eardroom. 5.20.110 Games permitted, conditions. tie eara ~ames Clme~t ara.. ~elter, 10 eall I30lrer er contract or auetion erid~e may ee I31aycd in any lieensea eardroem; ~ro~iaea further, that the galRe af p:J.nguiRIJUC is of)ceifically and cl!19rcosly preail3itea All card qames which have been determined bv the Attornev General to be within the permissible sub;ect of local licensinq bv California cities mav be plaved in anv licensed cardroom on the followinq conditions. except that pai-qow. mav not. under anv circumstances. be plaved: 1. A written set of rules ("Games Rules") for a proposed card qame are on file with the Citv and have been 3 17i3~ approved. in writinq. bv the Chief of Police at the time of plavinq the qame. Said approval mav be amended. condi tioned or revoked from time to time in the sole discretion of the Chief of Police. 2 . A copv of the approved Game Rules showinq thereon the approval of the Chief of Police are posted in the Card- room in a conspicuous place readilv available to the pa- trons or prospective patrons and visiblefrom any seat at any card table on the premises. 3. The qame is played strictlY accordinq to said Game Rules. variations of the qame. unless specificallv described in the Game Rules. shall not be allowed. 5.20.120 Hours and days of operation. No card table licensed under the provisions of this code which is maintained or operated in connection with any other business shall be used for any card game from midniqht one o'clock a.m. to ~ nine o'clock a.m. of any day. All places which are devoted exclusively to the operation or maintenance of a card table bus- iness shall be kept closed each day from mianiqht one o'clock a.m. to ~ nine o'clock. No card table shall be used for any card game on Sunday. 5.20.160 Maximum number of tables on premiseS-Arrangement. No more than eight tables shall be permitted at any premises licensed as a cardroom pursuant to this chapter. except that at cardrooms operatinq under two consolidated licenses. twelve tables shall be permitted, and said playing area shall be located on the ground floor and the tables shall be arranged so that the playing surface of each table shall be visible from the sidewalk or public walk immediately adjacent to the cardroom. The holder of a cardroom license may appeal the visibility requirement to the zoning administrator. 5.20.180 Bets and wagers permitted when. No bet or wager in any game shall exceed the sum of thirty dollars, and only table stakes shall be permitted. Ne-t~ackpotsL to the extent they are accumulated from all or a portion of the per hand charqe permitted bY section 5.20.190--i.e.. the Owner's reve- nues--and not the player's winninqs, shall be allowed. 5.20.190 Charges for game playing-Maximum designated. No charge in excess of four dollars per hour fifty cents ($.50\ per hand per player shall be collected from any player for the privilege of participating in any game. 4 / 1~--1/ 5.20.200 signs to be posted in cardroom-Contents. There shall be posted in every cardroom in letters plainly visible from all parts thereof, signs stating that which qameS have been approved for play at said cardroom bv the Chief of Police. eRly aFa.: pel,eF, Is saIl pel,oF, aRa/sF eSRtrae~ sr auetieR sriaEjo is pormit~ea te so playea, aft9-stating the charge per hour exacted from each player for the privilege of playing. and statinq which tables are offerinq iackpots. In addition to the foreqoinq. each table shall identifY bv prominent siqn located thereon the qame which is current Iv beinq played at said table. 5.20.210 License-Revocation criteria. Licenses for cardrooms may be revoked in the manner and for the reasons set forth in section 5.02.180 et seq. of this code and for the further raaGeR eeRGiGtiREj sf a ~violation of any of the provisions of this chapter. The city may. but is not required. to impose a fine in lieu of revocation. SECTION II: That Master Tax Schedule at section 5.07.030, at the line items indicated thereon as 5.20.050, Card Table, is hereby amended to read as follows: 5.20.050, Card Table, Tax Rate from January 1, 1993 to January 31, 1993, $2,000 per month per table; payable quarterly. SECTION III: This ordinance shall take effect and be in full force on the thirtieth day from and after its adoption. Richard P. Emerson, Chief of Police Bruce M. Attorney Presented by F: \home\attomey\cardrm4 5 17;3...-5 ALTERNATIVE NO.3 ORDINANCE NO. ';I..5:2.~ <2..J AN ORDINANCE OF THE CITY OF CHULA VISTA AMENDING CHAPTER 5.20 AND SECTION 5.07.030 OF THE CHULA VISTA MUNICIPAL CODE RELATING TO CARDROOMS 5.20.060, 5.20.200 Code are SECTION I: That sections 5.20.030, 5.20.035, 5.20.110, 5.20.120, 5.20.160, 5.20.180, and 5.20.210 of Chapter 5.20 of the Chula vista hereby amended to read as follows: 5.20.040, 5.20.190, Municipal 5.20.030 License-Number permitted and transferability. The number of licenses authorized for issuance under the provisions of this chapter shall be limited, based upon the population of the city as shown upon the population certified by the state Department of Finance. The number so authorized shall be one per forty thousand residents or any fraction thereof. All such licenses shall be issued in accordance with the provisions of this chapter; provided, however, those persons holding a license to conduct cardroom operation upon the effective date of this section may continue to hold such licenses subject to the revocation provisions set forth in this chapter. Any license issued pursuant to this chapter may be transferred upon the approval of the chief of police to a person meeting all of the requirements for the initial issuance of such a cardroom license, subject to the ratification of the city council which approval mav be withheld in the sole discretion of the Chief of Police and which ratification mav be withheld in the sole discretion of the citv Council. and such approval and ratification may. but is not reauired to. be based entirelY or in part on the assessment bv the Chief of Police or. as applicable. the city Council. of the character of the proposed licensee. or when. in the opinion of the approvina or ratifvina entity. there appears to be aood cause whY such person should not operate a cardroom; provided, however, that with the exception of those licenses which have been issued prior to the effective date of the ordinance set forth in this section and section 5.20.040, no license may be so transferred unless the holder thereof has been operating a cardroom for three years at a fixed location in the city. For the purposes of this section. it shall be deemed to be a transfer of a license reauirina approval of the Chief of Police and ratification bv the city Council if a shareholder of a corporate licensee transfers any shares in the corporate licensee. It shall also be deemed to be a transfer of a license reauirina approval of the Chief of Police and ratification bv the city Council if a partner of a partnership licensee transfers all or any portion of his or her partnership interest. 1 11C -) ~< 5.20.035 consolidation-Permitted. Notwithstanding the provisions of section 5.20.160 regarding the maximum number of tables on premises, the citv council mav. in their sole discretion. qrant one additional license. but no more than one. to a person having an interest in or holding a license to any cardroom in the city may aIlply fer aR aElElitieRal available licenoe. er may aeE;{1:1ire a finuRcial iflt.e.re:st. iR aR aEiEiit.ieflo.l lieeRse but then onlv in accordance with the procedures set forth in this chapter and onlv if the total number of licenses issued. includinq consolidated licenses as two seoarate licenses. does not exceed the maximum oermitted bv section 5.20.030. If such application for an additional sinqle license is granted, the maximum number of tables permitted in the consolidation of two cardrooms is twelve (12). The mal!imum RlHllber ef tables permitteel iR 'Ehe eORoaliEiat:isn of three eararesmo is siu:t.eefl (16). 'Phe maximum Rumber of tables permitted iR the eSRDelielatioR ef four eardreems is t..eRty (20). No licensee mav obtain or have issued more than two licenses. A oerson shall be deemed to have an interest in. or hold. an existinq license if said oerson is a desiqnated licensee. if thev are oresentlv married to an existinq licensee. if thev are the oarent or child of an existinq licensee. if thev own shares in a corooration that owns a license or has a oartnershio interest in a license. if thev own a oartnershio interest in a oartnershio that has a license or owns shares in a corooration that owns a license. consolidation occurs whenever a cardroom licensee or a person having a financial interest in a cardroom obtains a license to operate an additional cardroom or acquires a financial interest in an additional cardroom. 5.20.040 License-Initial issuance procedure. El!cept fer cJrioting liccfHJCCEl at:] oet ferth ill Eest-isH (5.28.830, aAll applioaRtD fer available license~s shall comply with the provisions of this chapter. Any applicants requesting a license as permitted in section 5.20.030 shall pay a nonrefundable fee as presently designated, or as may in the future be amended, in the Master Fee Schedule, section 5.20.040, to cover the cost of investigation. No applicant requesting a license pursuant to this section may have any financial or other interest as set forth in section 5.20.035 in any other applioatioR beiR~ submitteel te eetaiR a-cardroom license. or aoolication oendinq therefore. Each application shall be totally independent and unassociated with any other application being submitted for the purpose of obtaining such a license. The initial period for issuance of new cardroom licenses shall be the month of May, 1977, and in the month of May 2 I/~ -;2. in subsequent years should there be additional licenses available. After the termination of the open period in May, no further li- censes shall be issued until the succeeding open 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 5.20.030, based upon population, the dircctor af ~aalie safety Chief of Police shall conduct a public lottery to select those applicants who shall be investigated to determine if they are qualified to be issued any available cardroom licenses as approved by the direetar of ~ualie safety Chief of Police, subject to ratification of the city council. upon the issuance of available cardroom licenses, the direetar af paalie safcty Chief of Police shall authorize the refund of any application fee to any persons who were not subject to investiga- tions. 5.20.060 License-Application prerequisites. required-contents-rssuance An applicant for a cardroom license shall submit his appli- cation to the chief of police, which application shall be under oath, and shall include, among other things, the true names and addresses of all persons financially interested in the business. The past criminal record, if any, of all persons financially or otherwise interested in the business shall be shown on such appli- cation. The term "persons financially interested" shall include all persons who share in the profits of the business, on the basis of gross or net revenue, including landlords, lessors, lessees, the owner or owners of the building, fixtures or equipment. The application shall also be accompanied by fingerprints of persons financially interested. The ehief af Ilaliee may deRY aRY aIlIllieaRt far a careireelll lieenoc a licenoe te G]?crate: such earEirosm ,;heR, in the spinieR of the chief af pelicc, there appeare te se ~eea eauoc tolay SHea pCYElon ohauld Rat spcrate a car€lreem. 5.20.110 Games permitted, conditions. no card '!James elrccElt dra.. Elokcr, 10 ball poleor or cORtract ar aaetioR brid'!Je may ae playcd iR aRY liccRocd eardrooml Ilro~idcd farther, that the '!Jame af IlaR'!JuiHg"lie iC3 C3Elccifically aRd elfIlressly prehieitcd All card qames which have been determined bY the Attorney General to be within the permissible subiect of local licensinq bv California cities may be played in any licensed cardroom on the followinq conditions. except that pai-qow. Super Pan. California 22 and panquinque may not. under any circumstances. be played: 1. A written set of rules ("Games Rules") for a proposed card qame are on file with the city and have been 3 J7C--3 approved. in writinq. bv the Chief of Police at the time of olavinq the qame. said aooroval mav be amended. conditioned or revoked from time to time in the sole discretion of the Chief of Police. 2 . A copv of the approved Game Rules showinq thereon the approval of the Chief of Police are posted in the Card- room in a conspicuous place readilY available to the pa- trons or prospective patrons and visiblefrom anv seat at anv card table on the premises. 3. The qame is played strictlY accordina to said Game Rules. variations of the qame. unless specificallv described in the Game Rules. shall not be allowed. 5.20.120 Hours and days of operation. No card table licensed under the provisions of this code which is maintained or operated in connection with any other business shall be used for any card game from miaRi~R~ one o'clock a.m. to ~ nine o'clock a.m. of any day. All places which are devoted exclusively to the operation or maintenance of a card table bus- iness shall be kept closed each day from miaRi~ht one o'clock a.m. to ~ nine o'clock. No card table shall be used for any card game on sunday. 5.20.160 Maximum number of tables on premiseS-Arranqement. No more than eight tables shall be permitted at any premises licensed as a cardroom pursuant to this chapter. except that at cardrooms operatina under two consolidated licenses. twelve tables shall be permitted, and said playing area shall be located on the ground floor and the tables shall be arranged so that the playing surface of each table shall be visible from the sidewalk or public walk immediately adjacent to the cardroom. The holder of a cardroom license may appeal the visibility requirement to the zoning administrator. 5.20.180 Bets and waqers permitted when. No bet or wager in any game shall exceed the sum of thirty dollars, and only table stakes shall be permitted. ~ackpots. to the extent they are accumulated from all or a portion of the per hand charae permitted bY section 5.20.l90--i.e.. the Owner's reve- nues--and not the player's winninqs, shall be allowed. 5.20.190 charqes for qame playinq-Maximum desiqnated. No charge in excess of four aollar3 per hour fifty cents ($.50) per hand per player shall be collected from any player for the privilege of participating in any game. 4 17 ~-I) 5.20.200 signs to be posted in cardroom-Contents. There shall be posted in every cardroom in letters plainly visible from all parts thereof, signs stating taat which qames have been approved for plav at said cardroom bv the Chief of Police. only 9.ra\: polter, Ie ball ~e]ter, and/or contraet eY auet.isn eriEig-c is ~ermittea te Be playea, ~stating the charge per hour exacted from each player for the privilege of playing. and statinq which tables are offerinq iackpots. In addition to the foreqoinq. each table shall identifv bv prominent siqn located thereon the qame which is currentlv beinq plaved at said table. 5.20.210 License-Revocation criteria. Licenses for cardrooms may be revoked in the manner and for the reasons set forth in section 5.02.180 et seq. of this code and for tfie furtaer FeaGOn eensistinq of a ~violation of any of the provisions of this chapter. The citv mav. but is not required. to impose a fine in lieu of revocation. SECTION II: That Master Tax Schedule at section 5.07.030, at the line items indicated thereon as 5.20.050, Card Table, is hereby amended to read as follows: 5.20.050, Card Table, Tax Rate from January 1, 1993 to January 31, 1993, $2,000 per month per table; payable quarterly. SECTION III: This ordinance shall take effect and be in full force on the thirtieth day from and after its adoption. Presented by as t ~:Q ~ Richard P. Emerson, Chief of Police Bruce M. Boogaar , C1ty Attorney F:\home\attorney\cardrmS 5 17C -5