California Senators Rod Wright and Darrell Steinberg have introduced the SB 1463 Bill on Internet gambling over the weekend, while the Gambling Control Act defines the regulation of gambling activities for individuals wanting a license from the state of California.

Under the bill, operators will be eligible to apply for a 10 year license to operate an intrastate internet gambling site to registered players within California. However, it will be a violation if operators provide any game play prohibited by Bill 1463, which at this time the bill only applies to the offering of poker and any violation is punishable as a misdemeanor.

Licensed applicants must pay an application fee to the department, for deposit into the Internet Gambling Licensing Fund, to be “continuously appropriated to the department for the reasonably anticipated costs of investigating the applicant.” This unspecified regulatory fee will create the Internet Gambling Fund, which is administered by the Controller subject to annual appropriation by the Legislature for the actual costs of license oversight, consumer protection, state regulation, problem gambling programs, and other purposes related to this bill, and which would not be subject to the formulas established by statute directing expenditures from the General Fund.

SB 1463 will require each licensee to pay a nonrefundable license fee in the amount of $30,000,000 for deposit in the General Fund. The license fee would be credited against monthly fees imposed on the licensee’s gross gaming revenue proceeds, as specified. Existing law provides that a statute that imposes a requirement that a state agency submit a periodic report to the Legislature is inoperative on a date 4 years after the date the first report is due. This bill would require the department, notwithstanding that requirement, in consultation with the commission, the Treasurer, and the Franchise Tax Board, to issue a report to the Legislature describing the state’s efforts to meet the policy goals articulated in this bill within one year of the operative date of this bill and, annually, thereafter.

The bill would also require the Bureau of State Audits, 2 years after the issue date of any license by the state, but no later than 3 years after that date, to issue a report to the Legislature detailing the implementation of this bill, as specified.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. This bill would declare that it is to take effect immediately as an urgency statute.

Reported by Maggie B.

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