HomeMy WebLinkAbout2022-61 CC ResolutionRESOLUTION NO. 2022-61
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF TEMECULA OPPOSING PROPOSITION 27
THE CITY COUNCIL OF THE CITY OF TEMECULA DOES HEREBY RESOLVE AS
FOLLOWS:
Section 1. The City of Temecula was recently contacted by Pechanga, an opponent of
Proposition 27, requesting an oppose position by the City. A copy of the proposition text, as
approved by the Secretary of State, is attached as Exhibit A. The Board of Directors of the League
of California Cities recently considered Proposition 27 and voted to oppose.
Section 2. The Local Control Subcommittee of Mayor Matt Rahn and Council
Member Maryann Edwards, who is also the Pechanga liaison, are recommending that the City
Council oppose Proposition 27.
Section 3. The City Council of the City of Temecula hereby opposes Proposition 27.
Section 4. The City Clerk shall certify to the adoption of this resolution.
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Temecula
this 9ch day of August, 2022.
Matt Rahn, Mayor
ATTEST:
07
Randi Johl, City Clerk
[SEAL]
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STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss
CITY OF TEMECULA )
I, Randi Johl, City Clerk of the City of Temecula, do hereby certify that the foregoing
Resolution No. 2022-61 was duly and regularly adopted by the City Council of the City of
Temecula at a meeting thereof held on the 91h day of August, 2022, by the following vote:
AYES: 4 COUNCIL MEMBERS: Edwards, Rahn, Schwank, Stewart
NOES: 1 COUNCIL MEMBERS: Alexander
ABSTAIN: 0 COUNCIL MEMBERS: None
ABSENT: 0 COUNCIL MEMBERS: None
Randi Johl, City Clerk
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21
NIELSEN MERKSAMER PARRINELLO GROSS & LEONI LLP
October 5, 2021
VIA PERSONAL DELIVERY
Hon. Rob Bonta
Attorney General of California
1300 I Street, 17th Floor
Sacramento, CA 95814
- 0 0 1 7
Attention: Ms. Anabel Renteria, Initiative Coordinator
AM& #-I LAW
POLITICAL & ADVOCACY
GOVERNMENT LITIGATION
RECEIVED
OCT 5 2021
INITIATIVE COORDINATOR
ATTORNEY GENERAL'S OFFICE
Re: Request for Title and Summary for Proposed Initiative Constitutional
, Amendment (A.G. No. 21-0017) —Amended Languaa—e
Dear Mr. Bonta:
Pursuant to Section 9002(b) of the California Elections Code, please find
attached hereto amendments to the above -captioned initiative measure. We hereby
request that a title and summary be prepared for the initiative measure using the
amended language. Our addresses as registered voters, the required proponent
affidavits pursuant to Sections 9001 and 9608 of the California Elections Code, and a
check for $2,000.00 were included with the original submission.
All inquires or correspondence relative to this initiative should be directed to:
Kurt R. Oneto
Nielsen Merksamer LLP
1415 L Street, Suite 1200
Sacramento, CA 95814
(916) 446-6752
Sincerely,
Kurt R. Oneto, Proponent
Enclosure: Proposed Initiative Constitutional Amendment —Amended Language
2021
VIA PERSONAL DELIVERY
Hon. Rob Bonta
Attorney General of California
1300 I Street, 17th Floor
Sacramento, CA 95814
Attention: Ms. Anabel Renteria, Initiative Coordinator
Re: Request for Title and Summary for Proposed Initiative Constitutional
Amendment (A.G. No. 21-0017) -Amended Language
Dear Mr. Bonta:
Pursuant to Section 9002(b) of the California Elections Code, please find
attached hereto amendments to the above -captioned initiative measure. We hereby
request that a title and summary be prepared for the initiative measure using the
amended language. Our addresses as registered voters, the required proponent
affidavits pursuant to Sections 9001 and 9608 of the California Elections Code, and a
check for $2,000.00 were included with the original submission.
All inquires or correspondence relative to this initiative should be directed to:
Kurt R. Oneto
Nielsen Merksamer LLP
1415 L Street, Suite 1200
Sacramento, CA 95814
(916) 446-6752
Thank you for your assistance.
Sincerely
John J. Moffatt, Proponent
Enclosure: Proposed Initiative Constitutional Amendment - Amended Language
21 — 00 7 Arndt#.1.
Section 1. Tide.
This measure shall be known and may be cited as the California Solutions to
Homelessness and Mental Health Support Act.
Section 2. Statement of Intent and Purposes.
The People of the State of California find and declare the following:
(a) California's homelessness and mental health crises demand action. Nearly half of all
unsheltered people in the country live in California,and public school data shows that more than
250,000 public school students are experiencing homelessness.
(b)Mental health disorders are among the most common health conditions faced by
Californians:Nearly 1 in 6 California adults experience a mental illness of some kind; 1 in 24
has a serious mental illness that makes it difficult to carry out major life activities; and 1 in 13
children has an emotional disturbance that limits participation in daily activities. With no
adequate permanent funding stream, every level of government has disinvested in mental health
services—leaving those in most dire need of support without help.
(c) In May 2018,the United States Supreme Court eliminated the federal prohibition on
sports betting. As a result, states now have the freedom to authorize online sports betting at
locations within their borders and establish regulations,consumer protections,responsible
gaming measures,and taxes on online sports betting.
(d)Unregulated and untaxed online sports betting is currently happening throughout
California in the illegal market without any consumer or responsible gaming protections.
Leading economists and industry experts estimate the illegal market has flourished with billions
of dollars bet online annually across the United States.
(e)Allowing state-regulated entities to offer responsible online sports betting that
includes a comprehensive licensing process, limits online sports betting to individuals 21 years
of age or older,and imposes enforcement and accountability measures will generate billions of
dollars in revenue to help fight homelessness and expand mental health support in California.
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(f) Safe, legal online sports betting that allows people who are 21 years or older to enjoy
sports betting over the Internet and on mobile devices should require online sports betting
operators to put in place age verification and information-sharing technologies that have been
proven effective in other states at preventing minors from participating and impose penalties and
fines for violations.
(g) Safe and legal online sports betting should be regulated by the California Department
of Justice to ensure minors and children are protected, the integrity of sporting events is
maintained, and operators are properly licensed. Smart technologies and information-sharing
amongst sports leagues, online sports betting operators, and the Department should be employed
to protect minors and maintain sports integrity.
(h) Online sports betting requires the expertise of entities with significant experience
operating online sports betting platforms in other U.S. states and territories. Therefore, gaming
tribes should be given the option of offering state-regulated online sports betting to individuals
who make bets while physically present in this State but outside of Indian lands; qualified online
sports betting platform providers should be able to offer their products and services to gaming
tribes; and qualified gaming entities that have a market access agreement with a gaming tribe
should be permitted to offer online sports betting in this state.
(i) The legal market for online and in-person sports betting must be operated by persons
and entities with the ability to protect consumers, prevent minors from accessing sports betting,
promote and preserve responsible play, and facilitate a marketplace that responsibly maximizes
revenue to accomplish the public policy purposes of this Act. This Act imposes minimum
qualifications that such persons and entities must satisfy before they may offer online sports
betting in the State of California.
(j) Online and in-person sports betting are complementary and supplementary to each
other. They can be offered concurrently in California in order to maximize the amount of tax
revenue generated.
Section 3. Section 19.5 is added to Article IV of the California Constitution, to read:
SEC. 19.5. Notwithstanding any contrary provision of this Constitution or any other law:
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(a)A gaming tribe, an online sports betting platform provider with an operating
agreement with a gaming tribe, or a qualified gaming entity with a market access agreement with
a gaming tribe may offer, conduct, and/or operate online sports betting over the Internet and on
mobile devices to persons aged 21 years or older physically present anywhere in this State but
outside of Indian lands of a federally recognized Indian tribe.
(b)(1)Online sports betting shall only be offered, conducted, and/or operated in this State
but outside of Indian lands as specifically set forth in Chapter 4.7 (commencing with Section
19750)of Division 8 of the Business and Professions Code.
(2)The implementation and administration of this section shall be governed by Chapter
4.7(commencing with Section 19750)of Division 8 of the Business and Professions Code,the
provisions of which are hereby expressly authorized and required by this section of the
Constitution.
(c)Online sports betting shall not be permitted on youth sports events.
(d)(1)The taxes imposed by Article 8 (commencing with Section 19775) of Chapter 4.7
of Division 8 of the Business and Professions Code shall be in lieu of and preempt all other
existing or future state and local taxes imposed on any of the following:
(A)An online sports betting operator in its capacity as an online sports betting operator.
(B)The offering,conduct, and/or operation of online sports betting.
(C)The revenues or income generated from online sports betting.
(2)Notwithstanding paragraph(1),this subdivision does not prohibit the imposition of a
tax where all of the following apply:
(A)The tax is generally applicable to a broad range of businesses, business activity,
conduct,property, or products.
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(B)The tax does not establish or rely on a classification related to or involving any of the
following: (i)online sports betting operators; (ii)the offering, conduct, and/or operation of
online sports betting; or(iii)the revenues or income from online sports betting.
(C)The tax is applied in a manner that avoids additional taxation of the operation of, or
revenues or income generated by,online sports betting.
(e)Any word or phrase appearing in this section that also appears in Article 13
(commencing with Section 19794)of Chapter 4.7 of Division 8 of the Business and Professions
Code shall be defined by those statutory definitions.
(f)This section shall take effect on the next January 1 following its approval by the
People of the State of California.
Section 4. Chapter 4.7(commencing with Section 19750) is added Division 8 of the
Business and Professions Code,to read:
CHAPTER 4.7. ONLINE SPORTS BETTING
ARTICLE 1. California Online Sports Betting Trust Fund.
19750. California Online Sports Betting Trust Fund.
(a)The California Online Sports Betting Trust Fund("Fund") is hereby established in the
State Treasury.
(b)Notwithstanding any other provision of law,the Fund,and every account within the
Fund,is hereby declared to be a trust fund.
(c)Except as provided in Sections 16310 and 16381 of the Government Code,as those
sections read on January 1, 2018,moneys in the Fund shall not be borrowed,loaned, or
otherwise transferred to the General Fund or other fund in the State Treasury. Moneys deposited
into the Fund, and any account within the Fund, including any interest earned thereon, shall only
be used for the specific purposes set forth in this chapter. No action shall be taken that
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permanently or temporarily changes the status of the Fund as a trust fund, or borrows, diverts, or
appropriates the moneys in the Fund in a manner inconsistent with this chapter.
(d) After deducting and transferring the necessary moneys pursuant to paragraph(2) of
subdivision(c) of Section 19751 and repaying the loan authorized by Section 19784, the
Controller shall annually allocate and transfer the remaining moneys in the Fund to the following
accounts, in the following amounts:
(1)(A) Eighty-five percent(85%)to the California Solutions to Homelessness and Mental
Health Support Account, which is hereby created in the Fund. As set forth in this paragraph,
moneys in the account shall be appropriated pursuant to Section 12 of Article IV of the
Constitution for the purpose of delivering permanent and interim housing, including rental
assistance, supportive services, and operating subsidies or reserves for these purposes.
(i) Moneys in the account shall be made available to cities, counties, and continuums of
care according to the same allocation formula for the most recent fiscal year used to distribute
moneys to those entities under the Homelessness Housing, Assistance, and Prevention program
established in Chapter 6 (commencing with Section 50216) of Part 1 of Division 31 of the Health
and Safety Code (the "HHAP law"), or any successor statute.
(ii)Moneys appropriated from the account shall be provided to cities, counties, and
continuums of care with the same accountability and reporting requirements as established in the
HHAP law, or any successor statute.
(iii) Moneys appropriated from the account may be further restricted to advancing the
state's goals of improving outcomes for people experiencing homelessness who need access to
mental health, substance use disorder treatment, and service enhanced housing.
(B) Moneys in the account, or a portion thereof, may be committed to the repayment of
revenue bond indebtedness. The proceeds of any such revenue bonds shall be used solely and
exclusively in furtherance of the purposes described in subparagraph (A). No moneys in the
account shall ever be committed to the repayment of general obligation bonds.
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(C)Notwithstanding subparagraph(A),a portion of the moneys in the account may also
be appropriated for mental health treatment programs under Chapter 8 (commencing with
Section 4369)of Part 3 of Division 4 of the Welfare and Institutions Code.
(D)Moneys allocated pursuant to this paragraph shall be used to increase and enhance
the purposes described in subparagraphs (A) and(C), and not to replace any other existing
revenues for those purposes including,but not limited to,existing revenue sources-that support
the HHAP law. The State and recipient cities,counties,and continuums of care bear the burden
of proving by clear and convincing evidence that the moneys allocated pursuant to this paragraph
are not being used to supplant preexisting revenues.
(E)(i)Except as provided in clause(ii),not more than forty percent(40%) of the moneys
in the account shall be appropriated or used for interim housing.
(ii)In any fiscal year in which moneys appropriated for the HHAP law are equal to, or
greater than,the amount appropriated for that purpose during the 2021-2022 fiscal year,the
restriction in clause(i)shall not apply.
(2)(A)Fifteen percent(15%)to the Tribal Economic Development Account, subject to
subparagraph(B).
(B)In the event that Section 19769 is found by a court of competent jurisdiction to be
unenforceable in whole or in part under state or federal law,then the moneys described in
subparagraph(A)shall instead be allocated and transferred by the Controller to the California
Solutions to Homelessness and Mental Health Support Account.
(e)(l)Moneys shall be appropriated from the Fund pursuant to Section 12 of Article IV
of the Constitution in order to cover the operational expenses incurred by the Division and the
Department in carrying out this chapter. The annual appropriation for the Division and the
Department shall be clearly sufficient to ensure that the Division is adequately staffed,that
online sports betting is adequately regulated, and that the purposes of this chapter are being
faithfully carried into effect.
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(2)Of the moneys appropriated pursuant to this subdivision, eighty-five percent(85%)
shall be drawn from the California Solutions to Homelessness and Mental Health Support
Account and fifteen percent(15%)shall be drawn from the Tribal Economic Development
Account.
19751. California Online Sports Betting Trust Fund Oversight and Accountability.
(a)The People of the State of California hereby declare their unqualified intent for the
revenues generated by this chapter to be used to support the purposes set forth in Section 19750
without delay or interruption. The purpose of this section is to provide oversight and
accountability mechanisms to guarantee that the People's intent is carried out.
(b)The Attorney General or local district attorney shall expeditiously investigate, and
may seek civil or criminal penalties for, any misuse or unauthorized use, of moneys deposited
into, or appropriated from,the California Online Sports Betting Trust Fund or any account within
the Fund.
(c)(1)The nonpartisan California State Auditor shall conduct a biennial independent
financial audit of the programs receiving moneys from the Fund. The California State Auditor
shall report its findings to the Governor and both houses of the Legislature, and shall make the
findings available to the public on its Internet website.
(2)(A) The California State Auditor shall be reimbursed from moneys in the Fund for
actual costs incurred in conducting the biennial audits required by this subdivision, in an amount
not to exceed six hundred thousand dollars($600,000)per audit.
(B)The six hundred thousand dollar($600,000)per audit maximum limit shall be
adjusted decennially to reflect any increase in inflation as measured by the Consumer Price Index
for All Urban Consumers (CPI-U). The Treasurer's office shall calculate and publish the
adjustments required by this subparagraph.
(d)(1) If any challenge to invalidate an action that violates the use of moneys allocated or
appropriated pursuant to this chapter, as specified in this chapter, is successful either by way of a
final judgment, settlement, or resolution by judicial, administrative,or legislative action,there is
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hereby continuously appropriated from the General Fund to the Controller,without regard to
fiscal years,that amount of money necessary to restore the California Online Sports Betting
Trust Fund, or account within the Fund,to its financial status had the unlawful action not been
taken.
(2)Interest calculated at the Pooled Money Investment Account rate from the date or
dates the moneys were unlawfully used shall accrue to the amounts required to be restored
pursuant to this section. Within 30 days from the date a challenge is successful,the Controller
shall make the transfer required by the continuous appropriation set forth in paragraph(1) and
issue a notice to the parties that the transfer has been completed.
(3)If in any challenge brought pursuant to this section a restraining order or preliminary
injunction is issued,the plaintiffs or petitioners shall not be required to post a bond obligating the
plaintiffs or petitioners to indemnify the government defendants or the State of California for any
damage the restraining order or preliminary injunction may cause.
(e)(1)Every four years,the Controller shall conduct a performance audit of efforts and
programs funded with moneys from the California Solutions to Homelessness and Mental Health
Support Account to ensure the moneys are disbursed and expended solely according to this
chapter and shall report his or her findings to the Governor,the Legislature,and the public.
(2)Money in the California Solutions to Homelessness and Mental Health Support
Account may be appropriated pursuant to Section 12 of Article IV of the Constitution in order to
reimburse the Controller for the cost of conducting the audit(s)required by this subdivision. If
moneys are appropriated from that account for this purpose,the amount shall not exceed the
dollar limit described in paragraph(2)of subdivision(c).
19751.5. Tribal Economic Development Account.
(a)The Tribal Economic Development Account is hereby created in the California Online
Sports Betting Trust Fund.
(b)(1)Notwithstanding Section 13340 of the Government Code or any other law, all
moneys deposited in the Tribal Economic Development Account,together with any interest
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earned thereon, are hereby continuously appropriated,without regard to fiscal years,to federally
recognized Indian tribes in California that do not have any of the following: (A) a tribal operator
license; (B)an operating agreement with an online sports betting platform provider; or(C) a
market access agreement with a qualified gaming entity.
(2)Commencing not sooner than one year after the effective date of this chapter,the
Controller shall transfer revenues in the Tribal Economic Development Account to Indian tribes
described in paragraph(1). The transfers shall be made pursuant to the procedures adopted
pursuant to subdivision(c).
(c)The Division shall, in consultation with the California Gambling Control Commission
and the Governor's Tribal Advisor, adopt a regulation establishing a formula for allocating
moneys in the Tribal Economic Development Account amongst Indian tribes described in
paragraph(1)of subdivision(b). The formula shall, at a minimum,provide the method of
allocation and a schedule for payments to be made.
(d)Moneys received by Indian tribes pursuant to this section may be used to support,
improve,and expand tribal government,public health,education, infrastructure, economic
development,and employment opportunities.
ARTICLE 2. Protection of Minors and Consumers.
19752. Minors Prohibited from Engaging in Online Sports Betting.
(a)A person under 21 years of age shall not do any of the following:
(1)Either personally or through an agent place, or collect winnings from, bets on any
sporting event.
(2)Present or offer to any online sports betting operator,or any agent of such operator,
any written,printed, or photostatic evidence of age and identity that is false, fraudulent, or not
actually their own for the purpose of placing a bet on a sporting event.
(3) Open, maintain,or use in any way an online sports betting account or make or attempt
to make an online sports bet.
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(b)A person shall not knowingly do either of the following:
(1)Accept or redeem a bet placed by, or offer to accept or redeem a bet on behalf of, a
person known to be under 21 years of age.
(2)Allow a person known to be under 21 years of age to open,maintain, or use in any
way an online sports betting account or make an online sports bet.
(c)A person who violates this section shall be subject to penalties imposed by the
Division as set forth in Section 19781. A person holding a license under this chapter who
violates this section shall be subject to further administrative discipline imposed by the Division.
19753. Consumer Protections and Requirements.
(a) An online sports betting operator shall use commercially reasonable efforts to verify
that a person placing,making, or initiating a bet on a sporting event is of the legal minimum age
for placing such a bet.
(b)An online sports betting operator shall display on its website and mobile application a
statement that it is illegal for a person under 21 years of age to engage in online sports betting in
this State.
(c)An online sports betting operator shall display a link on its online sports betting
platform to an Internet webpage or mobile application screen dedicated to responsible gaming,
which shall include all of the following:
(1)Tools for imposing voluntary self-restrictions on betting activity.
(2)A prominent message stating"If you or someone you know has a gambling problem
and wants help, call 1-800 GAMBLER,"or similar message.
(3)A link to an appropriate organization that provides information regarding responsible
gaming.
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111 (d) An online sports betting operator shall implement responsible gaming programs that
include providing commercially reasonable training to employees with respect to identifying and
responding to signs of problem gaming.
19754. Voluntary Restrictions on Betting Activity.
(a) An online sports betting operator shall allow individuals to voluntarily exclude
themselves from placing bets with the operator, and shall use commercially reasonable efforts to
prevent self-excluded individuals from placing bets.
(b)The Division shall establish a process through which individuals may submit requests
to be excluded from sports betting with all online sports betting operators. The Division shall
maintain a list of individuals who have self-excluded from placing bets on sporting events and
shall make the list accessible to all online sports betting operators.
(c)Any bets placed by an individual prior to self-exclusion shall be permitted to settle
and shall not be required to be cancelled.
19755. Online Sports Betting Operator Advertisements.
(a)An online sports betting operator shall:
(1)Use commercially and technologically reasonable means to ensure marketing and
advertisements do not purposefully target individuals who have self-excluded from placing bets
on sporting events.
(2) Employ commercially reasonable methods to ensure that advertisements for online
sports betting:
(A)Do not purposefully target minors,other persons who are ineligible to place bets,or
self-excluded individuals.
(B) Disclose the identity of the online sports betting operator.
(C)Provide information about, or links to,resources relating to problem gaming.
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(D)Are not false,misleading, or deceptive to a reasonable consumer.
(E)Clearly and conspicuously disclose the material terms of any offer of free or
promotional credits. Online advertisements may satisfy this paragraph by containing a hyperlink
that takes the viewer directly to the material terms.
(3)Maintain a copy of all advertisements to consumers in this State for no less than three
years.
(b)An online sports betting operator shall not be required to obtain prior Division review
or approval of any advertisement or promotion.
(c)An operator applicant may engage in pre-launch marketing that clearly discloses the
operator applicant is not currently offering,conducting,and/or operating online sports betting in
this State.
(d)No limit shall be placed on the type or amount of free bets or promotional credits
offered or issued by an online sports betting operator.
19756. Conduct of Online Sports Betting.
(a)Each online sports betting operator shall adopt house rules for game play governing
online sports betting transactions with its customers. The rules shall include,at a minimum,all of
the following:
(1)The method for calculating and paying winning bets.
(2) The effect on bets, if any, of sports event schedule changes.
(3)The method of notifying consumers of odds changes.
(4)The method of contacting the online sports betting operator for purposes of seeking
assistance or lodging complaints.
(5)A description of persons prohibited from placing bets on specific sporting events
based upon their association with a sports governing body, sports league, team, or sports event.
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(6)The methods of funding an online sports betting account.
(7)The circumstances under which an online sports betting operator may void a bet in its
discretion, including obvious errors,and the method for notifying consumers that a bet has been
voided.
(b)Customers may establish online sports betting accounts with an online sports betting
operator in both of the following ways:
(1) Over the Internet,including on mobile devices.
(2) In-person at locations approved by the Division,if offered by the online sports betting
operator.
(c)A customer shall not register more than one account with each online sports betting
platform. Online sports betting operators shall use commercially reasonable means to ensure that
each customer is limited to one account per platform.
(d)An online sports betting operator may permit account holders to deposit funds into,
and withdraw funds from, online sports betting accounts over the Internet, including on mobile
devices. Permissible methods of funding and withdrawal include,but are not limited to,credit
cards,debit cards, gift cards,reloadable prepaid cards,free and promotional credit, automated
clearing house transfers, online and mobile payment systems that support online money transfers,
and wire transfers. The Division may approve additional funding and withdrawal methods
including, but not limited to,cash deposits at approved locations and secure cryptocurrencies.
(e)Each online sports betting operator shall use commercially reasonable geolocation and
geo fencing technology to ensure that it accepts bets only from customers who, at the time of
placing the bet, are physically present in this State but not physically present on Indian lands.
(f)Each online sports betting operator shall determine and display applicable lines,point
spreads,odds,or other information pertaining to online sports betting. The Division shall not
specify the manner in which the lines,point spreads,or odds are determined and shall not require
such information to be publicly disclosed. The Division shall not set or require a minimum or
maximum hold rate.
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(g)(1)An online sports betting operator shall maintain in this State,or any other location
approved by the Division and consistent with federal law,the computer server or servers used to
receive transmissions of requests to place bets and that transmit confirmation of acceptance of
bets on sports events placed by customers physically present in this State but outside of Indian
lands.
(2)All bets authorized under this chapter must be initiated,made,or otherwise placed by
a bettor while physically present within this State but outside of Indian lands.
(3)The intermediate routing of electronic data related to lawful intrastate bets authorized
under this chapter shall not determine the location or locations in which the bet is initiated,
transmitted,received, or otherwise made.
197.57. Risk Management.
(a)An online sports betting operator that is licensed to offer sports betting, whether in-
person or online, in this State and one or more other U.S. states or territories may pool liquidity
from all such states and territories.
(b)An online sports betting operator may employ systems that offset loss or manage or
lay off risk in the offering, conduct,and/or operation of online sports betting.
(c)The systems described in subdivision(b)include,but are not limited to, liquidity
pools and exchanges or similar mechanisms with other U.S. states or territories where the online
sports betting operator is licensed to offer, conduct,and/or operate sports betting, whether in-
person or online.
(d)An online sports betting supplier that is licensed to offer sports betting, whether in-
person or online, in this State and one or more other U.S. states or territories may employ the
systems described in this section on behalf of an online sports betting operator.
(e)An online sports betting operator, or an online sports betting supplier acting on behalf
of an online sports betting operator, shall at all times ensure sufficient funds are available to pay
registered players in any liquidity pool.
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ARTICLE 3. Protection of Sports Integrity.
19758. Maintaining the Integrity of Sporting Events.
An online sports betting operator shall employ commercially reasonable methods to do
all of the following:
(a)Prohibit the online sports betting operator's directors,officers, principal owners, and
employees,and any relative living in the same household as those persons,from placing bets
with that online sports betting operator.
(b)(1)Prohibit the following persons from placing a bet on any sporting event under the
authority of their sports league: athletes, coaches,referees,principal owners of teams, sports
league members,and officials of unions that represent athletes or referees.
(2)In determining which persons are excluded from placing bets on specific sporting
events under this subdivision, an online sports betting operator shall rely solely and exclusively
on lists of such persons that sports leagues may provide to the Division. The Division shall
disseminate any such lists to online sports betting operators.
(c)Prohibit any known individual with access to non-public confidential betting
information held by the online sports betting operator from placing bets with that operator.
(d)(1)Maintain the security of betting data, customer data, and other confidential
information from unauthorized access and dissemination.
(2)Notwithstanding paragraph(1),nothing in this chapter shall preclude the use of
Internet or cloud-based hosting of data and information, or the disclosure of data or information
as required by law or court order.
(e)Conduct background checks on employees who have not previously undergone a
background check during the course of their employment with the online sports betting operator.
Background checks shall search for criminal history, including any charges or convictions
involving corruption or manipulation of sporting events and association with organized crime.
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111 Section 19759. Abnormal Betting and Other Suspicious Activity.
(a)The Department shall have primary responsibility for conducting, or assisting the
Division in conducting, investigations into abnormal betting activity, match fixing, and other
conduct that corrupts a betting outcome of a sporting event or events for purposes of financial
gain.
(b) The Division and online sports betting operators shall use commercially reasonable
efforts to cooperate with investigations conducted by sports governing bodies or law
enforcement agencies. These efforts shall include, but are not limited to, using commercially
reasonable efforts to provide, or arrange the providing of, betting information.
(c)(1)An online sports betting operator shall, as soon as practicable, report to the
Division any information relating to:
(A) Criminal or material disciplinary proceedings commenced against the online sports
betting operator by this State, another U.S. state or territory, or the United States, in connection
with its operations.
(B) Abnormal betting activity or patterns that may indicate a concern with the integrity
of a sporting event or events.
(C) Any other conduct that corrupts a betting outcome of a sporting event or events for
purposes of financial gain, including match fixing.
(D) Suspicious or illegal betting activities if known to the operator, including but not
limited to use of funds derived from illegal activity, bets to conceal or launder funds derived
from illegal activity, using agents to place bets, or using false identification. Nothing herein shall
require the disclosure of suspicious activity reports made pursuant to and deemed to be
confidential under federal law.
(2) An online sports betting operator shall implement commercially reasonable internal
controls designed to identify the activities described in this subdivision.
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(3)The information described in subparagraphs (B)and (C)of paragraph(1) shall be
reported by an online sports betting operator as soon as practicable and simultaneously to the
relevant sports governing body and the Division.
(d) The Division and online sports betting operators shall maintain the confidentiality of
information provided by a sports governing body for purposes of investigating or preventing the
activities described in subparagraphs (B) and (C) of paragraph(1) of subdivision(c), unless the
disclosure is consented to by the sports governing body or is required by state law, the Division,
or court order.
19759.5. Restrictions on Betting Requested by Sports Governing Bodies.
(a)(1) A sports governing body may submit to the Division a written request, in a form
prescribed by the Division, to restrict, limit, or exclude a certain type, form, or category of online
sports betting with respect to a covered sporting event of the sports governing body, if the sports
governing body believes that such type, form, or category of online sports betting with respect to
the covered sporting event of the sports governing body may undermine the integrity or
perceived integrity of such body or covered sporting events of such body.
(b)The Division shall request comment from online sports betting operators on all
requests made pursuant to this section. After giving due consideration to all comments received,
the Division shall, upon a demonstration of good cause from the requestor that such type, form,
or category of sports betting is likely to undermine the integrity or perceived integrity of such
body or sporting events of such body, grant the request.
(c)(1) The Division shall respond to a request concerning a covered sporting event before
the start of the event, or, if it is not feasible to respond before the start of the event, no later than
7 days after the request is made.
(2) If the Division determines that the requestor is more likely than not to prevail in
successfully demonstrating good cause for its request, the Division may provisionally grant the
request of the sports governing body pending the Division's final determination thereon. Unless
the Division provisionally grants the request, online sports betting operators may continue to
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offer sports betting and accept bets on the covered sporting event pending a final determination
by the Division.
Section 19760. Records of Bets.
(a)Online sports betting operators shall maintain records of all bets placed, including
personally identifiable information of the bettor,amount and type of bet,time the bet was placed,
location of the bet,including IP address if applicable,the outcome of the bet, and records of
abnormal betting activity for three years after the sporting event occurs. If a video recording of
the transaction is created, it shall be maintained for at least one year from the date the sporting
event occurred. Online sports betting operators shall make such data available for inspection
upon request of the Division or as required by court order.
(b)Online sports betting operators shall use commercially reasonable efforts to maintain
in real time and at the account level,anonymized information regarding a bettor, amount and
type of bet,the time the bet was placed,the location of the bet, including the IP address if
applicable,the outcome of the bet, and records of abnormal betting activity. The Division may
request such information in the form and manner as required by rule of the Division.Nothing in
this subdivision shall require an online sports betting operator to provide any information that is
prohibited by federal, state or local laws or regulations,including without limitation laws and
regulations relating to privacy and personally identifiable information.
(c)If a sports governing body has notified the Division that access to the information
described in subdivision(a)for bets placed on sporting events of such sports governing body is
necessary to monitor the integrity of such body's sporting events, and represents to the Division
that it specifically uses such data for the purpose of monitoring the integrity of sporting events of
such sports governing body,then online sports betting operators shall share, in a commercially
reasonable frequency, form, and manner,with the sports governing body or its designee(s)the
same information the online sports betting operator is required to maintain under subdivision(b)
with respect to bets on sporting events of such sports governing body. Sports governing bodies
and their designees may only use information received under this section for integrity-monitoring
purposes and may not use information received under this section for any commercial or other
purpose.Nothing in this section shall require an online sports betting operator to provide any
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information that is prohibited by federal, state or local laws or regulations, including without
limitation laws and regulations relating to privacy and personally identifiable information.
19761. Permissible Online Sports Betting Types and Events.
(a)(1)The Division shall maintain in real time a publicly accessible list of sports events,
sports leagues, and bet types that are authorized for online sports betting pursuant to this chapter.
(2) An online sports betting operator may accept bets on sports events, sports leagues,
and bet types appearing on the list.
(3)An online sports betting operator may submit a written request to the Division seeking
additional sporting events, sports leagues, or bet types to be added to the list maintained pursuant
to this section.
(b)The Division shall consider the following factors when making determinations on
requests submitted pursuant to paragraph(3) of subdivision(a):
(1) Whether the outcome of the sporting event or bet type can be verified.
(2) Whether the outcome of the sporting event may be affected by any bet type placed.
(3)Whether the sporting event is conducted in conformity with all applicable laws.
(c)No bets shall be authorized or allowed upon any of the following with respect to
sporting events:
(1)The occurrence of injuries or penalties.
(2)The outcome of player discipline rulings.
(3)The outcome of replay reviews.
(d)(1)The Division shall approve or deny a request made pursuant to paragraph(3) of
subdivision(a)within five business days of receipt of the request.
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(2) The Division shall make good faith efforts to issue a determination in advance of the
next opportunity for bets to be offered or accepted on the sporting event, sports league, or bet
type subject to the request if the online sports betting operator makes the request at least three
business days in advance thereof. If the request is approved, the sporting event, sports league, or
bet type shall be added without delay to the list maintained pursuant to paragraph (1) of
subdivision(a).
(3) If the Division does not communicate its determination to the online sports betting
operator within five business days of receipt of the request,then both of the following shall
apply:
(A)The online sports betting operator shall be permitted to offer betting on the next
occurrence of the sporting event, sports league, or bet type after expiration of the five-business
day deadline.
(B)The Division shall add without delay the sporting event, sports league, or bet type to
the list maintained pursuant to paragraph(1) of subdivision(a).
(e) If a sports event or sports league has been generally authorized by the Division
pursuant to this section, an online sports betting operator may accept bets on all sports events of
the kind generally conducted by that sports league.
ARTICLE 4. Online Sports Betting Operators.
19762. Online Sports Betting Authorized.
(a) Online sports betting is hereby authorized to be offered, conducted, and/or operated
in this State consistent with this chapter and Section 19.5 of Article IV of the California
Constitution.
(b) Online sports betting shall only be offered, conducted, and/or operated in this State
pursuant to an online sports betting operator license issued by the Division to a gaming tribe, an
online sports betting platform provider with an operating agreement with a gaming tribe, or a
qualified gaming entity with a market access agreement with a gaming tribe.
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(c)No person may engage in any activity in connection with online sports betting in this
State unless all necessary licenses or temporary licenses have been obtained pursuant to this
chapter and the rules and regulations of the Division.
(d)An online sports betting operator license issued pursuant to this chapter does not
entitle the license holder to accept any bet from a person who is physically present on Indian
lands when the bet is made or initiated.
19763. Online Sports Betting Operator Licenses.
(a)A license shall be obtained by each online sports betting operator as provided in this
chapter.
(b)(1)An online sports betting operator license may be applied for in the following ways:
(A)By a gaming tribe(a"tribal application"). Under a tribal application, the gaming
tribe is the operator applicant. If the application is approved,the online sports betting operator
license shall be issued to the gaming tribe(a"tribal operator license").
(B)By a qualified gaming entity(a"qualified gaming entity application"). Under a
qualified gaming entity application,the qualified gaming entity shall be the operator applicant. If
the application is approved,the online sports betting operator license shall be issued to the
qualified gaming entity(a"qualified gaming entity operator license").
(C)By an online sports betting platform provider(an"online sports betting platform
provider application"). Under an online sports betting platform provider application,the online
sports betting platform provider shall be the operator applicant. If the application is approved,the
online sports betting operator license shall be issued to the online sports betting platform
provider(an"online sports betting platform provider operator license").
(2)No person may obtain an online sports betting operator license pursuant to this section
except a gaming tribe, a qualified gaming entity, or an online sports betting platform provider.
Page 21 of 63
(3)Beyond the express requirements of this chapter,the Division may specify additional
information required to be submitted as part of a tribal application,qualified gaming entity
application,or an online sports betting platform provider application.
(c)(1)An operator applicant shall submit an application to the Division in the manner
prescribed by the Division together with an application fee of one hundred fifty thousand dollars
($150,000).
(2)(A)The application fee in paragraph(1)shall cover up to two thousand (2,000)hours
of Division professional staff time expended on matters directly related to the application.
(B)The operator applicant shall reimburse the Division for any additional hours required
to process the application at the hourly rate for human resource services used by the Contracted
Human Resources Unit within the Department of General Services Office of Human Resources,
as set forth in the Department of General Services Price Book.
(3)In no event shall the combined total amount paid by an operator applicant pursuant to
this subdivision exceed two hundred fifty thousand dollars ($250,000).
(d)In determining whether to approve an operator applicant's application to become an
online sports betting operator,the Division may request from the operator applicant, and
consider,any or all of the following information:
(1)Whether the operator applicant has adequate capitalization and the financial ability to
responsibly pay its secured and unsecured debts in accordance with its financing agreements and
other contractual obligations.
(2)Whether the operator applicant has a history of material noncompliance with sports
betting licensing requirements of this State,any other U.S. state or territory, or the United States,
where the noncompliance resulted in a material enforcement action by the government agency
with authority over the operator applicant.
(3)Whether the operator applicant or any key person of the operator applicant has been
indicted for, charged with,arrested for, or convicted of,pleaded guilty or nolo contendere to, or
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forfeited bail concerning, any misdemeanor or felony criminal offense under the laws of this
State, any other U.S. state or territory, or the United States, except for traffic violations.
(4) Whether the operator applicant has filed, or had filed against it, a proceeding for
bankruptcy or has ever been involved in any formal process to adjust, defer, suspend, or
otherwise work out the payment of any debt.
(5) Whether the operator applicant has a history of material noncompliance with any
regulatory requirements of this State, any other U.S. state or territory, or the United States, where
the noncompliance resulted in material enforcement actions by the government agency with
authority over the operator applicant.
(e) Upon approval by the Division, and payment of an initial license fee as provided in
subdivision(f), the Division shall issue the online sports betting operator license, which shall
expire five years from the date of issuance.
(f)Upon notice by the Division that it has approved the application for an online sports
betting operator license, and before issuance of the license, the operator applicant shall pay an
initial license fee to the Division as follows:
(1)The initial fee for a tribal operator license or online sports betting platform provider
operator license shall be ten million dollars ($10,000,000).
(2) The initial fee for a qualified gaming entity operator license shall be one hundred
million dollars ($100,000,000).
(g) As part of an operator applicant's application,the Division may identify and require
applications from specified key persons of the operator applicant as provided in Article 7.
(h)(1) An online sports betting operator license authorizes the holder of the license to
operate one online sports betting platform, subject to the branding provisions set forth in
paragraph(2) of subdivision(i).
(2)(A) A person holding an online sports betting operator license may act as an online
sports betting platform provider,provided that such person has:
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(i) Submitted the documentation required by Section 19767 for online sports betting
platform providers.
(ii)Paid an initial license fee pursuant to paragraph(1) of subdivision(f) for each gaming
tribe for which it is an online sports betting platform provider.
(B)An online sports betting platform provider shall not provide any service described
within the definition of"online sports betting platform provider"to any gaming tribe other than
as provided in this subdivision.
(i)(1)(A) Where a gaming tribe is issued a tribal operator license,the gaming tribe shall
operate the online sports betting platform only under the gaming tribe's own name or,if the tribe
became a gaming tribe on or before July 1,2021, a trademark owned by the gaming tribe as of
July 1,2021.
(B)If a tribe becomes a gaming tribe after July 1, 2021,the gaming tribe shall operate
any online sports betting platform only under the gaming tribe's own name.
(2)Where a qualified gaming entity is issued a qualified gaming entity operator license, it
may operate its online sports betting platform under one of the following names, chosen at the
discretion of the qualified gaming entity:
(A)The name,trade name, licensed trademark, or assumed business name of the
qualified gaming entity.
(B)The name,trade name, licensed trademark, or assumed business name of an affiliate
of the qualified gaming entity.
(C)The name of the gaming tribe with which the qualified gaming entity has a market
access agreement.
(D)If the tribe with which the qualified gaming entity has a market access agreement
became a gaming tribe on or before July 1,2021,a trademark owned by the gaming tribe as of
July 1, 2021.
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(D). (E)Any combination of the names described in subparagraph (A) through subparagraph
(3)Where an online sports betting platform provider is issued an online sports betting
platform provider operator license,the online sports betting platform provider shall operate,or
facilitate or support the operation of,the online sports betting platform only under a name
permitted under subparagraph(A)or subparagraph(B) of paragraph(1) of this subdivision for
use by the gaming tribe to which the online sports betting platform provider is providing services
pursuant to an operating agreement.
19764. Temporary Online Sports Betting Operator Licenses.
(a)The Division shall issue a temporary online sports betting operator license to any
operator applicant if all of the following conditions are satisfied:
(1)The operator applicant has submitted an application pursuant to Section 19763.
(2)The operator applicant satisfies the conditions of paragraph(1)or paragraph(2)of
subdivision(ii)of Section 19794.
(3)The operator applicant pays the initial license fee as set forth in subdivision(f)of
Section 19763.
(b)(1) Within 30 days of receiving a request for a temporary license,the Division shall
issue the temporary online sports betting operator license to an operator applicant that satisfies
the requirements of subdivision(a). The temporary license shall expire two years from the date it
is issued or on the date the Division issues a license to the operator applicant pursuant to Section
19763,whichever occurs first.
(2)A temporary license issued pursuant to this section entitles a person to immediately
engage in all activities that may be undertaken by a person holding a license issued pursuant to
Section 19763.
(c)If the Division fails to make a final determination on the application submitted
pursuant to Section 19763 within the initial two-year period of temporary licensure,then the
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temporary license shall be extended in two-year increments or until a final determination is
made,whichever occurs first.
19765. Online Sports Betting Platform Testing.
(a)If the Division imposes a testing requirement for online sports betting platforms,it
shall accept either of the following test results for the online sports betting platform in lieu of a
new test,if issued not more than 180 days before the date the relevant application is submitted
pursuant to this article or Article 6:
(1)A satisfactory result issued by an independent testing laboratory, if the laboratory has
been approved to conduct such testing by the Division or a U.S. state or territory.
(2)A satisfactory result issued by a U.S. state or territory.
(b)This section shall apply to online sports betting operators,including online sports
betting platform providers, and online sports betting suppliers.
19766. Renewal of Online Sports Betting Operator Licenses.
(a)The Division shall establish a process for an online sports betting operator to renew its
license consistent with this section.
(b)When seeking to obtain a license renewal,an online sports betting operator shall
submit to the Division both of the following:
(1)All documentation or information as the Division may require demonstrating that the
online sports betting operator continues to meet the requirements of this chapter and the
regulations of the Division.
(2)A renewal application fee of fifty thousand dollars ($50,000).
(c)If an online sports betting operator submits a renewal application to the Division at
least 60 days prior to the expiration of the operator's current license,then the Division shall
make a determination on the renewal application prior to the expiration of the current license.
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(d)The Division shall renew the online sports betting operator license for an additional
five-year period unless the online sports betting operator's renewal application demonstrates that
it will be unable to satisfy all requirements of this chapter and regulations of the Division. Upon
renewal of the license,the online sports betting operator shall pay a license renewal fee of one
million dollars ($1,000,000) for a tribal operator license or online sports betting platform
provider operator license and ten million dollars ($10,000,000)for a qualified gaming entity
operator license.
19767. Documentation Requirements Relative to Gaming Tribes.
(a) Before conducting sports betting in this state pursuant to licenses issued under this
article,the person holding a qualified gaming entity operator license or an online sports betting
platform provider operator license shall submit copies of an agreement between the license
holder and a gaming tribe as follows:
(b)The holder of a qualified gaming entity operator license shall submit to the Division a
market access agreement, entered into between the qualified gaming entity and a gaming tribe,
relative to the qualified gaming entity's offering of online sports betting in this state. The terms
of the market access agreement shall be determined solely by the parties to the agreement.
(c) The holder of an online sports betting platform provider operator license shall submit
to the Division an operating agreement, entered into between the online sports betting platform
provider and a gaming tribe. The purpose of the operating agreement is to specify the allocation
of rights,responsibilities, and obligations between the online sports betting platform provider
and the gaming tribe to which the platform provider is providing services.
(1)The operating agreement shall be binding on the parties. Once approved by the
Division, material changes to the operating agreement shall not be made without the written
approval of the Division. The Division shall issue its written response to any request for a
material change to an operating agreement within 10 business days of the request.
(2)Matters that shall be specified in the operating agreement include, but are not limited
to, the following:
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(i) The name under which the online sports betting platform will be operated.
(ii) The profit-sharing allocation, if any, between the gaming tribe and the online sports
betting platform provider.
(iii)Any other information required by the Division.
(d)The Division may adopt a model or template operating agreement to be used by
online sports betting platform providers.
19768. Processing Online Sports Betting Operator Applications.
(a) Notwithstanding any contrary provision of law, an application submitted pursuant to
this article or Article 6, and all documents,reports, and data submitted therewith,that contain
proprietary information,trade secrets,financial information,or personal information about any
person are exempt from disclosure under Chapter 3.5 (commencing with Section 6250)of
Division 7 of Title 1 of the Government Code,or any successor law.
(b) When an application under this article requires a criminal background investigation
for an individual, and the individual has submitted to a criminal background check in this State
or any other U.S. state or territory in the previous 12 months,the individual shall not be required
to submit to another criminal background check,or another submission of fingerprints, if the
individual submits the results of the previous criminal background and a declaration under
penalty of perjury attesting that there has been no change in the individual's criminal history in
the previous 12 months.
(c)The fees set forth in this article,Article 6, and Article 7 shall be adjusted decennially
to reflect any increase in inflation as measured by the Consumer Price Index for All Urban
Consumers (CPI-U). The Treasurer's office shall calculate and publish the adjustments required
by this subdivision.
ARTICLE 5. State of California Jurisdiction Over Online Sports Betting.
19769. Jurisdiction Over Online Sports Betting Retained by State of California.
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(a)The Division shall condition the issuance, maintenance, and renewal of every tribal
operator license upon the gaming tribe irrevocably consenting to all of the following:
(1)Payment of the surcharge set forth in Section 19775 of this chapter, and any
subsequent amendments thereto.
(2) Payment of penalties for any violations of this chapter as set forth in Section 19781
and all other fees imposed pursuant to this chapter or regulations adopted thereunder.
(3) Compliance with all state laws governing online sports betting set forth in this
chapter, and all regulations,rules, orders, and interpretations adopted or enforced pursuant to this
chapter.
(4) Submission to the jurisdiction of the courts of this State, and any other appropriate
state or federal court having jurisdiction and venue, for the limited purpose of enforcing this
chapter, including all of the following:
(A) An express limited waiver of sovereign immunity, and any right to assert sovereign
immunity, against this State or the Division.
(B) Consenting to be sued by the State of California or the Division in California state
courts, and any other appropriate state or federal court having jurisdiction and venue, and to be
bound by the judgments thereof, with respect to the limited purposes of paying the surcharge
described in paragraph(1),paying penalties and fees described in paragraph (2), and complying
with the laws, regulations, rules, orders, and interpretations described in paragraph(3).
(C) An express waiver of exhaustion of tribal remedies.
(5) Submission to the jurisdiction of the Division, including but not limited to inspection
and audit of the gaming tribe's online sports betting operations and records to ensure the
protection of minors and consumers,protection of sports integrity, and full and accurate payment
of the surcharge set forth in Section 19775 of this chapter.
(b)The Division shall not issue or renew a tribal operator license unless the gaming tribe
complies with this section.
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111 19770. Limitation on State Jurisdiction Over Gaming Tribes.
(a)Notwithstanding anything to the contrary in this chapter,with respect to gaming
tribes,this chapter regulates only online sports betting by persons physically present anywhere in
this State but outside of Indian lands.
(b)This chapter does not extend State of California jurisdiction to the making or placing
of bets by persons who are physically present on Indian lands at the time a bet is made or
initiated.
(c) This chapter does not create or extend any State of California jurisdiction or
regulatory authority over any other gaming operations of a federally recognized Indian tribe.
ARTICLE 6. Online Sports Betting Suppliers.
19771. Online Sports Betting Supplier Licenses.
(a) Online sports betting suppliers shall obtain a license pursuant to this article.
(b)(1) Supplier applicants shall submit an online sports betting supplier application to the
Division in the manner prescribed by the Division together with an application fee of twenty-five
thousand dollars($25,000).
(2)(A) The application fee in paragraph(1) shall cover up to three hundred thirty-three
(333)hours of Division professional staff time expended on matters directly related to the
application.
(B)The supplier applicant shall reimburse the Division for any additional hours required
to process the application at the hourly rate for human resource services used by the Contracted
Human Resources Unit within the Department of General Services Office of Human Resources,
as set forth in the Department of General Services Price Book.
(3)In no event shall the combined total amount paid by a supplier applicant pursuant to
this subdivision exceed forty thousand dollars ($40,000).
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(c)(1)Upon notice by the Division that it has approved the application for an online
sports betting supplier license, and before issuance of the license, the supplier applicant shall pay
an initial license fee of one hundred thousand dollars ($100,000) to the Division.
(2)An online sports betting supplier license issued pursuant to this section is valid for
five years from the date of issuance.
(d)A licensed online sports betting operator may perform any and all functions of an
online sports betting supplier without obtaining a separate online sports betting supplier license.
19772. Temporary Online Sports Betting Supplier Licenses.
(a)The Division shall issue a temporary online sports betting supplier license to any
supplier applicant that has submitted an application pursuant to Section 19771 and has been
licensed or similarly authorized to provide substantially the same services for online sports
betting in at least two other U.S. states or territories.
(b)(1) Within 30 days of receiving a request for a temporary license, the Division shall
issue the temporary online sports betting supplier license to a qualified supplier applicant. The
temporary license shall expire two years from the date it is issued or on the date the Division
issues a license to the supplier applicant pursuant to Section 19771, whichever occurs first.
(2)A temporary license issued pursuant to this section entitles a person to immediately
engage in all activities that may be undertaken by a person holding a license issued pursuant to
Section 19771.
(c) If the Division fails to make a final determination on the application submitted
pursuant to Section 19771 within the initial two-year period of temporary licensure, then the
temporary license shall be extended in two-year increments or until a final determination is
made,whichever occurs first.
19773. Renewal of Online Sports Betting Supplier Licenses.
(a)The Division shall establish a process for licensed online sports betting suppliers to
renew their licenses consistent with this section.
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(b) When seeking to obtain a license renewal, an online sports betting supplier shall
submit to the Division both of the following:
(1)All documentation or information as the Division may require demonstrating that the
online sports betting supplier continues to meet the requirements of this chapter and the
regulations of the Division.
(2)A renewal application fee of ten thousand dollars ($10,000).
(c) If the online sports betting supplier submits a renewal application to the Division at
least 60 days prior to the expiration of the supplier's current license, then the Division shall make
a determination on the renewal application prior to the expiration of the current license.
(d) The Division shall renew the online sports betting supplier license for an additional
five-year period unless the online sports betting supplier's renewal application demonstrates that
it will be unable to satisfy all requirements of this chapter and regulations of the Division. Upon
renewal of the license, the online sports betting supplier shall pay a license renewal fee of fifty
thousand dollars ($50,000).
ARTICLE 7. Online Sports Betting Key Persons.
19774. Key Person Licenses.
(a)(1) The Division may require a key person of an online sports betting operator,
operator applicant, online sports betting supplier, or supplier applicant to submit an application
and obtain a license pursuant to this article.
(2)When key persons are required to submit applications pursuant to this article, the
Division shall utilize a multijurisdictional licensing form used by other U.S. states and territories
wherever possible. The Director shall obtain advice from the Committee regarding the most
appropriate multijurisdictional licensing form to be used.
(b)(1) The Division shall issue a temporary key person license if the person holds a
comparable license or similar authorization issued by another U.S. state or territory where online
sports betting is legal, including authorizations where a comprehensive suitability review of the
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person was satisfactorily conducted in the course of licensing another entity but no formal
license or similar document was issued to the person.
(2)(A)The Division may accept a comparable license or similar authorization described
in paragraph(1)in full satisfaction of the requirement to obtain a key person license pursuant to
this article. If the Division refuses to accept a comparable license or similar authorization from
another U.S. state or territory, it shall provide written justification for its refusal to the person
seeking licensure.
(B)Where the Division refuses to accept a comparable license or similar authorization,
the person seeking licensure shall have the right to appeal the Division's decision to the Attorney
General.
(c)For persons who do not qualify for a temporary key person license pursuant to
subdivision(b),the Division may issue a temporary key person license upon satisfactory
completion of a criminal background check.
(d)The Division may issue an online sports betting operator license or online sports
betting supplier license, or a temporary version of those licenses,while a key person license
application is still pending and undergoing review.
(e)(1)The Division may impose a key person application fee of up to two thousand four
hundred dollars ($2,400).
(2)(A) The application fee in paragraph(1)shall cover up to one hundred(100)hours of
Division professional staff time expended on matters directly related to the application.
(B)The key person applicant shall reimburse the Division for any additional hours
required to process the application at the hourly rate for human resource services used by the
Contracted Human Resources Unit within the Department of General Services Office of Human
Resources,as set forth in the Department of General Services Price Book.
(3)In no event shall the combined total amount paid by a key person applicant pursuant
to this subdivision exceed ten thousand dollars ($10,000).
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(f) Prior to issuance of a key person license, the key person shall pay a license fee of
seven hundred fifty dollars ($750).
(g) A key person license shall be valid for not less than five (5)years. The Division may
impose a renewal application fee of not more than five hundred dollars ($500), and a renewal
license fee of not more than seven hundred fifty dollars($750).
(h) The Division shall not require licensing of any persons who are not key persons, but
may require criminal background checks of persons who are not key persons where good cause
exists to do so.
ARTICLE 8. Online Sports Betting Surcharges.
19775. Online Sports Betting Operator Surcharge.
(a) There is hereby imposed upon each online sports betting operator a surcharge equal to
ten percent (10%) of the online sports betting operator's adjusted gross online sports betting
receipts derived from the offering, conduct, and/or operation of online sports betting in this State.
The accrual method of accounting shall be used for purposes of calculating the amount of
surcharge owed by an online sports betting operator pursuant to this section.
(b)(1) The surcharge imposed pursuant to this section is due and payable to the Division
in monthly installments on or before the last calendar day of the month following the calendar
month in which the adjusted gross online sports betting receipts were received.
(2)An online sports betting operator shall complete and submit a return for the preceding
month by electronic communication to the Division, on or before the last calendar day of each
month, in the form prescribed by the Division. The return shall provide all of the following:
(A) The sports betting operator's total gross receipts and adjusted gross online sports
betting receipts from offering, conducting, and/or operating online sports betting during the
month.
(B) The surcharge amount for which the online sports betting operator is liable.
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(C) Any additional information necessary in the computation and collection of the
surcharge on adjusted gross online sports betting receipts required by the Division.
(3) The surcharge amount shown to be due shall be remitted by electronic funds transfer
simultaneously with the filing of the return.
(c)(1) An online sports betting operator's adjusted gross online sports betting receipts for
a month is a negative number when the operator's total gross receipts taken in from the bets
placed by patrons is less than the sum of all of the following:
(A)All winnings paid out to patrons who placed bets on the online sports betting
operator's platform.
(B) All voided bets.
(C) All excise taxes paid pursuant to federal law.
(D) The value of all merchandise or property awarded as a prize to bettors.
(2)(A) When an online sports betting operator's adjusted gross online sports betting
receipts for a month is a negative number pursuant to the formula set forth in paragraph(1),the
Division shall allow the operator to carry over the negative amount within twelve months and
deduct such amount from its surcharge liability for that month. The Division may require the
negative amount to be spread across multiple months within the twelve-month period.
(B) The negative amount of adjusted gross receipts may not be carried back to an earlier
month and moneys previously paid to the Division shall not be refunded, except if the online
sports betting operator surrenders its license and the online sports betting operator's last return
reported negative adjusted gross online sports betting receipts.
(d)(1)(A) An online sports betting operator may take a credit against the surcharge
described in subdivision(a)equal to twenty percent (20%) of the initial license fee paid pursuant
to subdivision(f) of Section 19763 in each of the first five calendar years following the issuance
of an initial online sports betting operator license or temporary license.
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(B) If an online sports betting operator renews its license,the sum of any credit not
applied in each of the first five calendar years following the issuance of an initial online sports
betting operator license or temporary license may be carried forward into the sixth and
subsequent calendar years until the credit is exhausted.
(2)(A) An online sports betting operator may take a credit against the surcharge described
in subdivision(a)equal to twenty percent(20%) of the renewal license fee paid pursuant to
subdivision(d) Section 19766,plus any credit carried over pursuant to paragraph(1), in each of
the five calendar years following renewal of an online sports betting operator license.
(B) If an online sports betting operator renews its license more than once, the sum of any
credit not applied in each of the first five calendar years following its previous renewal of an
online sports betting license may be carried forward into the sixth and subsequent calendar years
until it is exhausted.
(3) In no event shall the amount of credit applied pursuant to this subdivision reduce
below zero the amount of surcharge owed for any calendar year.
(4) The credit described in this subdivision can be taken against one or more monthly
installments made pursuant to subdivision(b), so long as the total amount of credit taken does
not exceed the limits set forth in paragraph(1) and paragraph(2).
(e)The following shall be promptly transferred from the Division to the Controller for
deposit into the Fund:
(1)Proceeds of the surcharge imposed pursuant to this section.
(2)The fees and costs required by subdivisions(c) and(f) of Section 19763, subdivisions
(b)and(d) of Section 19766, subdivisions (b)and(c) of Section 19771, and subdivisions (b) and
(d)of Section 19773.
(3)Any amounts paid pursuant to of Section 19774.
(f) If requested by the Division, an online sports betting operator shall agree to engage an
independent firm of certified public accountants approved by the Division to perform an annual
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audit in order to ensure that the surcharge imposed by this section is being accurately calculated
and paid.
19776. Surcharge on Bets Made Through Illegal or Tax-Exempt Online Sports Betting
Platforms.
(a)(1)A tax is hereby imposed upon a bettor for the privilege of placing or making,while
physically present in this State but outside of Indian lands, a bet on or through an illegal or tax-
exempt online sports betting platform. The rate of tax shall be fifteen percent(15%)of the dollar
amount bet on or through the illegal or tax-exempt online sports betting platform.
(2) The People of the State of California hereby declare that the character of the tax
imposed by this section,based upon its incidents and from its natural and legal effect, is an
obligation upon the person placing or making the bet at the location where the individual is
physically present when the bet is made or initiated, and not an obligation upon the owner or
operator of the illegal or tax-exempt online sports betting platform.
(b)The Division may adopt any regulation and take any action necessary or convenient
for the implementation and enforcement of this section. The regulations may include,but are not
limited to,all of the following:
(1)Requiring individuals placing or making a bet on or through an illegal or tax-exempt
online sports betting platform to register with the Division prior to making or placing such a bet.
(2)Requiring owners, operators, or agents of an illegal or tax-exempt online sports
betting platform to disclose the names of persons who make or place a bet on or through the
illegal or tax-exempt online sports betting platform while physically present in this State but
outside of Indian lands.
(3)(A)Taking any and all legal actions against an owner, operator, business partner, or
agent of an illegal or tax-exempt online sports betting platform that refuses to disclose names of
bettors pursuant to paragraph(2), in order to compel the disclosure of the names sought.
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(B) Actions may include blocking access to the Internet website or mobile application of
the illegal or tax-exempt online sports betting platform from any and all locations in California
but outside of Indian lands.
(4) Contracting with the Department of Tax and Fee Administration for assistance with
administration and collection of the tax.
(5)Establishing deadlines for the payment and collection of the tax. The Division may
require the tax to be paid at the time the bet is made or initiated, or on a daily, weekly,monthly,
quarterly, semi-annual, or annual basis, or any combination thereof.
(6)Publishing a list of known illegal or tax-exempt online sports betting platforms.
(c) In addition to any other penalties,there is hereby established a civil penalty of one
thousand dollars($1,000)per day that any tax owed pursuant to this section is past due under
regulations adopted by the Division. Proceeds of any penalties incurred under this subdivision
shall be deposited into the Fund.
(d)Proceeds from the tax imposed by this section shall be deposited into the Fund.
(e)The tax imposed pursuant to this section shall not apply to,or be imposed upon,any
person for making or placing a bet of any kind if the person is physically present upon Indian
lands at the time the bet is made or initiated.
(f)For purposes of this section, an"illegal or tax-exempt online sports betting platform"
is an online sports betting platform that is any of the following:
(1)Owned by a person who is exempt from the surcharge imposed by Section 19775.
(2)Owned or operated by a person who has not submitted to the jurisdiction and
regulatory control of the Division.
(3)Owned or operated by a person who does not possess the licenses required by this
chapter for the offering, conduct,and/or operation of online sports betting in this State but
outside of Indian lands.
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ARTICLE 9. Division of Online Sports Betting Control.
19777. Division of Online Sports Betting Control Established.
(a)Notwithstanding any contrary provision of law, including but not limited to Part 6 of
Division 3 of Title 2 of the Government Code, there is hereby established within the Department
of Justice a Division of Online Sports Betting Control.
(b) The Division shall continue in existence on and after the effective date of this chapter,
and shall remain separate and independent from all other divisions, bureaus, branches, sections,
and units within the Office of the Attorney General and the Department of Justice.
(c) The Attorney General shall appoint a Director of the Division, who shall lead the
Division in the performance of its duties. The Director shall serve at the pleasure of the Attorney
General.
(d) Consistent with applicable civil service laws, the Attorney General shall retain,
appoint, or assign employees to the Division sufficient to carry out its duties as set forth in this
chapter and implementing regulations. The Attorney General shall consult with the Director
regarding the number and qualifications of employees necessary for the Division to carry out its
duties. The Division may contract for services that cannot be provided by employees.
19778. Powers of the Division.
(a)The Division is vested with exclusive power, authority, and jurisdiction to implement
and enforce this chapter and supervise the offering, conduct, and/or operation of online sports
betting in the State of California but outside of Indian lands.
(b)The Division shall do all of the following:
(1)Exercise all of the powers of the Office of the Attorney General and the Department
of Justice in the performance of its duties.
(2)(A) Adopt, amend, and rescind regulations necessary to carry out the purposes and
provisions of this chapter.
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(B)The Division shall consult with,and obtain written input from,the Committee prior
to proposing,adopting, amending,or rescinding any regulation or emergency regulation.
(C)The Division shall examine the regulations adopted in other U.S. states or territories
where online sports betting is lawfully conducted and shall,as far as practicable,adopt a similar
regulatory framework. The Division may enlist the assistance of the Committee in identifying
and examining the relevant regulations adopted in other U.S. states or territories.
(3)Establish and maintain an office for the transaction of its business in Sacramento.
(c)(1)Included within the Division's general power to adopt, amend, and rescind
regulations is the power to adopt regulations relating to(A)the acceptance of bets on a sports
event, or a series of sports events; (B)the types of records which shall be kept; (C)the
protections for patrons placing bets;and(D)the promotion of social responsibility,responsible
gaming, and inclusion of the statement,"If you or someone you know has a gambling problem
and wants help, call 1-800 GAMBLER,"or similar message on an online sports betting platform.
(2)Paragraph(1)is merely a partial description of the regulatory powers of the Division.
Nothing in paragraph(1) shall be interpreted as any limitation whatsoever on the powers of the
Division.
(d) The Division shall not adopt or enforce any rule or regulation that either:
(1)Requires an online sports betting operator to maintain any hold,whether expressed as
a percentage of bets, specific amounts, or otherwise.
(2) Requires that an online sports betting operator must report or display the handle or
amount bet on individual sports events or bet types.
(e)The Division shall only deny, limit, condition, or restrict a license, permit,
registration, or approval for good cause, subject to due process.
(f) In addition to its other powers,the Division may take any of the following actions:
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(1) Subpoena witnesses, compel their attendance and testimony, administer oaths and
affirmations,take evidence and require by subpoena the production of any books,papers,
records,or other items material to the performance of the Division's duties or exercise of its
powers, including,but not limited to, its power to audit a person's compliance with this chapter.
(2)Institute and defend civil actions in any court to restrain or halt a violation of this
chapter.
(3)Initiate disciplinary action for violations of this chapter.
(4)Inspect equipment, supplies, and systems of any online sports betting operator or
online sports betting supplier.
(5) Require any person to apply for a license, permit, registration, or approval as
specified in this chapter or in any regulation adopted pursuant to this chapter. The Division may
limit, condition, or restrict any license,permit,registration, or approval.
19779. Delegation of Power to the Director.
(a)All power necessary to carry out the administrative and executive functions of the
Division is hereby delegated to the Director. These powers include, but are not limited to, all of
the following:
(1)The issuance and renewal of licenses.
(2)The conduct of investigations, inspections, and audits.
(3)The civil prosecution and settlement of violations of this chapter.
(4)The approval of forms of betting, types of sports events, and sports leagues.
(5)The granting of requests and waivers,answering inquiries,issuing interpretations, and
otherwise taking all actions that are reasonably requested by applicants and licensees in
furtherance of, and consistent with,the efficient administration and enforcement of this chapter.
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(b)An applicant or licensee that receives an adverse determination, denial, or rejection
from the Director may appeal the adverse determination, denial, or rejection to the Attorney
General. The Attorney General shall independently review appeals brought pursuant to this
subdivision de novo.
19780. Confidentiality.
(a) The Division shall maintain a file of all applications for licenses under this chapter.
The Division shall maintain a record of all actions taken with respect to those applications.
(b)Except as necessary for the administration of this chapter, no person having obtained
access to confidential records or information in the performance of duties pursuant to this
chapter, shall knowingly disclose or furnish the records or information, or any part thereof, to
any person who is not authorized by law to receive it. A violation of this subdivision is an
infraction and may subject the violator to civil liability, including damages, and disciplinary
action.
(c)Notwithstanding subdivision(k) of Section 1798.24 of the Civil Code, a court shall
not compel disclosure of personal information in the possession of the Division to any person in
any civil proceeding wherein the Division or Attorney General is not a party, except for good
cause and upon a showing that the information cannot otherwise be obtained. This section shall
not authorize the disclosure of personal information that is otherwise exempt from disclosure.
(d) Disclosures that are required to be made to the Division as necessary for the
administration of this Chapter shall not waive attorney-client privilege held by the person or
affiliate of a person required to make such a disclosure.
19781. Fines and Penalties for Violations of Chapter.
(a)The Division may impose fines,place licensees on probation, and revoke licenses in
response to violations of this chapter, subject to due process. The Division may impose fines
upon any person holding, or required to hold, a license, permit, registration, or approval under
this chapter or the regulations adopted pursuant to this chapter.
Page 42 of 63
(b)The Division has the sole and exclusive power to enforce this chapter and impose
fines and other penalties for violations of this chapter.
(c)Maximum fines for violations of this chapter shall be as follows:
(1) For an online sports betting operator or online sports betting supplier:
(A) $15,000 where the violation involves a person under 21 years of age.
(B) $10,000 for all other violations.
(2)For a key person:
(A)$7,500 where the violation involves a person under 21 years of age.
(B)$5,000 for all other violations.
(3)For all other persons:
(A)$5,000 where the violation involves a person under 21 years of age.
(B)$2,500 for all other violations.
(d)Notwithstanding subdivision(c),the maximum fine for multiple violations of this
chapter arising out of the same transaction,occurrence,or set of circumstances shall be as
follows:
(1) $100,000 for an online sports betting operator or online sports betting supplier.
(2) $50,000 for a key person.
(3) $25,000 for all other persons.
(e)(1)Nothing in this chapter shall be subject to, or construed to create, a private right of
action.
(2)Article 18 (commencing with Section 19990) of Chapter 5 of Division 8 shall not
apply to any conduct made lawful by this chapter or regulations adopted thereunder.
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19782. Emergency Regulations.
(a)The Division shall adopt emergency regulations sufficient to permit online sports
betting to be offered, conducted, and/or operated in this State but outside of Indian lands.
Emergency regulations shall be adopted in accordance with the schedule set forth in Section
19791.
(b)Any emergency regulation adopted pursuant to this chapter shall be adopted in
accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2
of the Government Code, and, for purposes of that chapter, including Section 11349.6 of the
Government Code, the adoption of the regulation is an emergency and shall be considered by the
Office of Administrative Law as necessary for the immediate preservation of the public peace,
health and safety, and general welfare. Notwithstanding any other contrary provision of law, an
emergency regulation adopted by the Division shall remain in effect until a permanent
replacement regulation has been adopted.
19783. Reporting Violations to the Division.
Any person or entity holding a license, permit, or approval under this chapter shall report
known violations of this chapter or other applicable law, or regulations adopted pursuant to this
chapter, to the Division. Violations shall be reported with commercially reasonable promptness,
which shall include adequate time to conduct an internal investigation concerning any potential
violation.
19784. Division Start-Up Loan.
(a)Notwithstanding any other contrary provision of law, a loan in the amount of up to
thirty million dollars ($30,000,000) is hereby made from the General Fund to the Attorney
General for the purposes of establishing the Division, hiring a Director and other Division
employees, securing office space for the Division, adopting regulations, reviewing and
processing applications, and administering this chapter.
(b) The loan shall be repaid within five years. The Legislature shall appropriate moneys
in the Fund to repay the loan.
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(c)The Controller and all other responsible state officials shall take all actions necessary
to effectuate the loan required by this section.
ARTICLE 10. Online Sports Betting Independent Advisory Committee.
19785. Online Sports Betting Independent Advisory Committee Established.
(a)An Online Sports Betting Independent Advisory Committee is hereby established
within the Division.
(b)No individual holding federal, state,tribal,or local elected or appointed office and no
officer or official of any political party is eligible for appointment to the Committee.
(c)Nine members of the Committee constitute a quorum for purposes of voting and
conducting business of the Committee.
(d)The Committee shall elect a chairperson from among its membership. The
chairperson shall serve in that capacity for two years and is eligible for reelection. The
chairperson shall preside at all meetings and shall have all the powers and privileges of other
Committee members.
(e)The Committee shall meet not less than quarterly, and may hold additional regular
and special meetings at the call of the Committee or the chairperson.
(f)At least two employees of the Division shall be assigned full-time to staffing and
supporting the Committee.
19786. Committee Membership.
(a)The Committee shall be composed of seventeen members appointed as follows:
(1) The Governor shall appoint four members as follows: one representative with
expertise in law enforcement or public health,one representative of the general public, one
representative of gaming tribes, and one representative of qualified gaming entities.
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(2) The Assembly Speaker shall appoint three members as follows: one representative of
the general public, one representative of gaming tribes, and one representative of qualified
gaming entities.
(3) The Senate President Pro Tempore shall appoint three members as follows: one
representative of the general public, one representative of gaming tribes, and one representative
of qualified gaming entities.
(4) The Lieutenant Governor shall appoint two members as follows: one representative
with expertise in responsible gaming, and one representative of gaming tribes or qualified
gaming entities.
(5) The Controller shall appoint two members as follows: one representative with
expertise in accounting, and one representative of gaming tribes.
(6)The Treasurer shall appoint two members as follows: one representative with
expertise in public finance, and one representative of qualified gaming entities.
111
(7)The Secretary of State shall appoint one member with expertise in technology or
privacy.
(b)No organization, including but not limited to a gaming tribe, qualified gaming entity,
law enforcement organization, or public health organization, shall have more than one individual
from their organization appointed to the Committee at any given time.
(c)The Attorney General, or the Attorney General's representative, shall serve as a non-
voting ex officio member of the Committee.
(d) Each member of the Committee shall either be a citizen and resident of the United
States or satisfy the requirements of subdivision(b) of Section 1020 of the Government Code.
19787. Committee Member Terms.
(a) Each appointing authority described in Section 19786 shall make their initial
appointments to the Committee in accordance with the schedule set forth in Section 19791.
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(b) The term of initial appointees to the Committee shall begin on the forty-fifth day after
the effective date of this chapter. The terms of initial appointees to the Committee shall be as
follows:
(1)The Governor's and Lieutenant Governor's initial appointees shall serve for a term of
four years.
(2)The Assembly Speaker's and Senate President Pro Tempore's initial appointees shall
serve for a term of three years.
(3)The Controller's,Treasurer's, and Secretary of State's initial appointees shall serve
for a term of two years.
(c)After the initial terms,the term of each appointed or reappointed Committee member
shall be four years. Each member of the Committee shall serve until a successor is appointed.
(d)A member of the Committee may be removed by the appointing authority for
malfeasance in office or neglect of duty. No member shall be removed unless the reasons for
removal are presented in writing to the member.
(e)(1)Within 10 days of the changed circumstance, a member of the Committee
appointed to represent a specific expertise,organization,or type of entity shall notify in writing
their appointing authority if they no longer possess or represent that specific expertise,
organization,or type of entity, or are otherwise unable to continue serving as a member of the
Committee.
(2)Upon receipt of the written notice by the appointing authority,the member's position
on the Committee shall be deemed vacant. Within 30 days of receipt of the written notice,the
appointing authority shall appoint a successor to serve the remainder of the former member's
term. Upon expiration of the unexpired term,the successor may be appointed to a full term.
19788. Duties of the Committee.
(a)The Committee shall advise and make recommendations to the Division and Director
with respect to implementing this chapter. The Committee shall advise and make
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recommendations upon any aspect of implementing this chapter, including but not limited to, the
following:
(1)Technologies and other measures that can be employed to prevent persons under 21
years of age from placing bets.
(2)Best online sports betting practices utilized in other U.S. states and territories.
(3) Options consistent with this chapter that will responsibly maximize the amount of
revenues paid into the Fund.
(4) Administrative and technical support guidance to the Division with respect to online
sports betting.
(5)Recommendations on new regulations that should be adopted, and existing
regulations that should be amended, updated, or rescinded.
(b) The Committee is authorized,but not limited, to do any of the following:
(1)Undertake investigations or studies.
(2)Issue written reports.
(3)Post any report or recommendation on the Division's Internet website under the
Committee's own link thereon.
19789. Compensation.
(a)Each Committee member, except ex officio members, shall be entitled to one hundred
fifty dollars ($150)per diem. Per diem shall be paid to Committee members for each day spent
in actual attendance at,or in traveling to and from,meetings of the Committee, or on special
assignment for the Committee as approved by the Committee chairperson and the Director.
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calendar(b)Noyear. member of the Committee shall receive per diem for more than 40 days in a
(c) Committee members shall receive the necessary traveling expenses and meal
allowances, as approved by the Director.
(d) The per diem and reimbursement authorized in this section shall be wholly defrayed
from moneys in the Fund.
ARTICLE 11. Amendment, Effective Date, and Commencement of Online Sports Betting.
19790. Amendment.
(a)The People of the State of California hereby declare as follows:
(1) Under subdivision (c) of Section 10 of Article II of the California Constitution, and as
described in People v Kelly(2010) 47 Ca1.4th 1008, the Legislature lacks power to make any
amendments to an initiative statute without subsequent voter approval, unless specifically
authorized by the People to make amendments without voter approval.
(2)Under subdivision(c) of Section 10 of Article II of the California Constitution, and as
described in Amwest Surely Insurance Company v. Wilson(1995) 11 Cal.4th 1243, where the
People do authorize the Legislature to amend an initiative statute, the People have power to
attach conditions to the authorization.
(b)(1) Except as provided in paragraph(2), after the effective date of this chapter, the
Legislature may amend this chapter by a statute passed in each house of the Legislature by
rollcall vote entered into the journal, five-sixths of the membership concurring, provided that the
statute is consistent with, and furthers the purpose of, this chapter. No bill seeking to amend this
chapter after the effective date of this chapter may be passed or ultimately become a statute
unless the bill has been printed and distributed to members, and published on the Internet, in its
final form, for at least 15 business days prior to its passage in either house of the Legislature.
(2)Notwithstanding paragraph(1),the Legislature may amend the percentage allocation
of moneys between the California Solutions to Homelessness and Mental Health Support
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Account and the Tribal Economic Development Account set forth in subdivision(d), and
paragraph(2)of subdivision(e),of Section 19750 by a statute passed in each house of the
Legislature by rollcall vote entered into the journal,two-thirds of the membership concurring.
(c)No statute enacted after October 1,2021,but prior to the effective date of this chapter,
that would constitute an amendment of this chapter, shall be operative after the effective date of
this chapter unless the statute was passed in accordance with the requirements of subdivision(b).
(d)The purposes of this chapter are described in Section 2 of the California Solutions to
Homelessness and Mental Health Support Act.
19791. Effective Date and Commencement of Online Sports Betting.
(a)This chapter shall take effect on the next January 1 following its approval by the
People of the State of California.
(b)Not later than 30 days after the effective date of this chapter, all initial appointments
to the Committee shall be made.
(c)Within 120 days after the effective date of this chapter,the Division shall publish
proposed emergency regulations sufficient for implementing this chapter,including but not
necessarily limited to, application forms for licenses and submissions authorized by Articles 4, 5,
6, and 7. The Division shall invite and consider comments on the proposed emergency
regulations from the public and the Committee.
(d) Within 150 days after the effective date of this chapter,the Division shall adopt final
emergency regulations implementing this chapter, including application forms as described in
subdivision(c).
(e)Within 160 days after the effective date of this chapter,the Division shall begin
accepting license applications from operator applicants, supplier applicants,key persons,and for
temporary licenses. The Division shall make a determination on an application within 60 days of
receipt thereof.
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(f)(1) Within 240 days after the effective date of this chapter, the Division shall permit
online sports betting operators to commence offering, conducting, and/or operating online sports
betting in this State as provided in this chapter.
(2) All operator applicants that have submitted an application pursuant to Section 19763
within 30 days of the adoption of final emergency regulations pursuant to subdivision (d) shall
be given an equal opportunity to first commence offering, conducting, and/or operating online
sports betting in this State on the same day.
(3) All operator applicants that have submitted an application pursuant to both Section
19763 and Section 19764 within 30 days of the adoption of final emergency regulations pursuant
II
to subdivision(d) shall be given an equal opportunity to first commence offering, conducting,
and/or operating online sports betting in this State on the same day. Operator applicants
described in this paragraph may be permitted to first commence offering, conducting, and/or
operating online sports betting in this State before operator applicants described in paragraph(2).
ARTICLE 12. Trade Secrets and Personal and Proprietary Information.
19792. Trade Secrets and Proprietary Information.
(a)Any submissions to the Division pursuant to this chapter, and all documents, reports,
and data submitted therewith, that contain proprietary information,trade secrets, financial
information, or personal information about any person or entity are not public records subject to
disclosure for purposes of Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code or any other state law.
(b) Submissions described in subdivision(a) shall be treated by the Division as
confidential records and shall not be publicly disclosed or disseminated unless required by an
order of a court of competent jurisdiction.
19793. Personal Information and Compliance with State Law.
(a)The collection, use, retention and sharing of personal information pursuant to this
chapter and regulations adopted thereunder shall be governed by this chapter and not any other
state law.
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(b)For the purposes of California law,including but not limited to Title 1.81.5
(commencing with Section 1798.100)of Part 4 of Division 3 of the Civil Code, the People
hereby find and declare that the collection,use,retention, and sharing of personal information
authorized or required by this chapter is necessary in order to comply with California state law as
set forth in this chapter.
ARTICLE 13. Definitions.
19794. Definitions.
For purposes of this chapter,as used in both the singular and plural form,the following
definitions shall apply:
(a)"Adjusted gross online sports betting receipts"means the dollar amount remaining
after subtracting the dollar amounts described in paragraph(2)from the dollar amounts described
in paragraph(1):
(1)Total gross receipts.
(2)The total dollar amount of all the following paid out or lost by the online sports
betting operator:
(A)All moneys paid out as winnings to all bettors.
(B)The value of all merchandise or property awarded as a prize to bettors.
(C)All federal excise taxes.
(D)All voided bets.
(b) "Amateur sports event" or"amateur sporting event"means any sports or athletic
event that is not a professional sports event, collegiate sports event, or youth sports event.
(c)"Collegiate sports event"or"collegiate sporting event"means an athletic event or
events in which at least one participant is a team from a public or private institution of higher
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learning or an individual competing on behalf of a public or private institution of higher learning,
regardless of where such institution is located.
(d)"Committee"means the Online Sports Betting Independent Advisory Committee
established in Article 10.
(e)"Competitive event"or"novelty event"means any other event of any kind authorized
by the Division for betting under this chapter, including but not limited to awards shows, non-
athletic competitions and events,popular culture, and current events. "Competitive event"or
"novelty event"does not include federal, state, local, or foreign elections.
(f)"Covered sporting event"or"covered sports event"means a professional,collegiate,
or amateur sports event of a sports governing body on which one or more online sports betting
operators offer or accept bets.
(g)"Department"means the California Department of Justice.
(h)"Division"means the Division of Online Sports Betting Control established in Article
9.
(i)"Director"means the director of the Division of Online Sports Betting Control.
(j)"Electronic sports event"or"electronic sporting event"means leagues, competitive
circuits,tournaments,or similar competitions where individuals or teams play video games,
typically for spectators,either in-person or online,for the purpose of prizes, money, or
entertainment.
(k)"Fund"means the California Online Sports Betting Trust Fund established by Section
19750.
(1)(1)"Gaming tribe"means a federally recognized Indian tribe that legally operates slot
machines or conducts banking and percentage card games, roulette,or games played with dice in
conformity with either of the following:
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(A) A valid compact negotiated with the Governor and ratified by the Legislature as
provided in Section 19 of Article IV of the California Constitution.
(B) Class III gaming procedures issued by the Secretary of the United States Department
of the Interior pursuant to the remedial provisions of Section 2710(d)(7) of Title 25 of the United
States Code, or any successor federal statute.
(2)"Gaming tribe" includes any instrumentality,political subdivision, or other legal
entity through which a gaming tribe operates slot machines or conducts banking and percentage
card games, sports betting, roulette, or games played with dice in this State.
(m) "Handle" means the dollar amount equal to the total of all bets on a sporting event.
(n)"Hold"means the dollar amount equal to the total of all bets, except for bets made
with free bets or promotional gaming credits, that an online sports betting licensee collects from
patrons, less the total amount of all sums paid out as winnings to all patrons.
(o) "Indian lands"means the"Indian lands"of a federally recognized Indian tribe, as
defined in Section 2703(4) of Title 25 of the United States Code, or any successor federal statute.
(p) "Key person"means a managerial employee of an operator applicant, supplier
applicant, online sports betting operator, or online sports betting supplier who performs the
function of principal executive officer, principal operations officer, or principal accounting
officer, and any principal owner of such licensee or applicant, except for an institutional investor
that holds for investment purposes less than 25 percent of the equity of applicant, operator, or
supplier.
(q) "Market access agreement"means an agreement between a qualified gaming entity
and a gaming tribe concerning the qualified gaming entity's offering and conduct of online sports
betting to persons physically present in this State but outside of Indian lands, the terms of which
shall be determined solely by the parties to the agreement.
(r) "Motor sports event"means a sports event in which participants compete using a
machine-powered vehicle or apparatus.
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(s)(l) "Online sports betting"means accepting a bet or bets through an online sports
betting platform on any of the following:
(A) Sporting events.
(B)Portions or combinations of sporting events.
(C)The individual statistics or performance of athletes or participants in a sporting event
or combination of sporting events.
(2) Online sports betting can take the form of placing or accepting bets by way of any
system or method of betting, including but not limited to single-game bets, teaser bets,parlays,
over-under, moneyline, pools, exchange betting, in-game betting, in-play bets, proposition bets,
and straight bets.
(3) "Online sports betting"does not include parimutuel betting on horse racing as set
forth in Article 9 (commencing with Section 19590) of Chapter 4 of Division 8.
(t)(1)"Online sports betting operator"means the person or persons described in
paragraph(2)that are licensed pursuant to this chapter to offer, conduct, and/or operate online
sports betting in this State but outside of Indian lands.
(2)(A) Where a gaming tribe obtains a tribal operator license pursuant to Article 4 of this
chapter, the gaming tribe is the online sports betting operator.
(B) Where a qualified gaming entity obtains a qualified gaming entity operator license
pursuant to Article 4 of this chapter, the qualified gaming entity is the online sports betting
operator.
(C) Where an online sports betting platform provider obtains an online sports betting
platform provider operator license pursuant to Article 4 of this chapter, the online sports betting
platform provider is the online sports betting operator.
(u)"Online sports betting operator license"means a license issued by the Division to an
online sports betting operator pursuant to this chapter to offer, conduct, and/or operate online
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sports betting in this State but outside of Indian lands. An"online sports betting operator
license" includes a tribal operator license, a qualified gaming entity operator license, and an
online sports betting platform provider operator license.
(aa) "Online sports betting platform" or"platform" means an online-enabled application,
Internet website, or other electronic or digital technology used to offer, conduct, and/or operate
online sports betting.
(ab) "Online sports betting platform provider"means a person that contracts with a
gaming tribe to provide an online sports betting platform or other services to the gaming tribe
that are specific to online sports betting and that are necessary for offering, conducting, and/or
operating online sports betting by the gaming tribe, including odds and line information, settling
bets,or maintaining sports betting customer accounts.
(ac) "Online sports betting platform provider application"means an application
described in subparagraph (C) of paragraph(1) of subdivision(b) of Section 19763.
(ad)"Online sports betting platform provider license" means an online sports betting
operator license described in subparagraph(C)of paragraph(1) of subdivision(b) of Section
19763.
(bb)"Online sports betting supplier" means a person that provides or offers services to an
online sports betting operator.
(cc) "Operating agreement"means a written contract in a form approved by the Division
in which a gaming tribe and an online sports betting platform provider agree to all of the
following:
(1)The online sports betting platform provider will offer, conduct, and/or operate online
sports betting in lieu of the gaming tribe.
(2) The online sports betting platform provider shall apply for an online sports betting
operator license, and shall be the only party to the agreement that obtains any license under this
chapter.
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(3) The gaming tribe shall have no active role in the offering, conduct, and/or operation
of online sports betting.
(4) Whether the online sports betting platform provider will share a portion of profits
from the offering,conduct, and/or operation of online sports betting with the gaming tribe.
(5)The online sports betting platform provider shall be responsible for payment of all
license fees,license renewal fees,taxes,penalties,fines, and surcharges applicable to the
offering,conduct, and/or operation of online sports betting with persons physically present in
this State but outside of Indian lands.
(dd)"Operator applicant"means all of the following:
(1) Where a gaming tribe submits a tribal operator application pursuant to Article 4 of
this chapter,the gaming tribe is operator applicant.
(2)Where a qualified gaming entity submits a qualified gaming entity application
pursuant to Article 4 of this chapter,the qualified gaming entity is the operator applicant.
(3)Where an online sports betting platform provider submits an online sports betting
platform provider application pursuant to Article 4 of this chapter,the online sports betting
platform provider is the operator applicant.
(ee) "Patron,""bettor," "consumer,"or"customer"means an individual in this State
eligible to place,make,or initiate bets on sports events pursuant to this chapter who has placed,
made, or initiated, or in the future places,makes,or initiates, such bets.
(ff) "Person"means individuals,natural persons, gaming tribes,tribal entities,corporate
entities,and any other legal entity of any kind. When used as a noun, "individual"means a
human being.
(gg)"Principal owner"means a person or entity that holds more than a 10 percent
ownership interest.
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(hh)"Professional sports event"or"professional sporting event"means an athletic event
in which at least two or more competitors participate and one or more competitors receives
compensation for participating in the event. Any event that qualifies as a collegiate sport shall
not be considered a professional sport regardless of whether competitors are compensated.
(ii)"Qualified gaming entity"means a person that satisfies at least one of the following
conditions:
(1)The person and its affiliates collectively are licensed or similarly authorized to offer,
conduct and/or operate online sports betting in at least ten U.S. states or territories; or
(2)The person and its affiliates collectively(A) are licensed or similarly authorized to
offer, conduct, and/or operate online sports betting in at least five U.S. states or territories;and
(B)operate and/or manage at least twelve casinos physically located anywhere within a U.S.
state or territory that offer games that would be "Class III gaming"under Section 2703 of Title
28 of the United States Code if the casino were operated by an Indian tribe.
(jj)"Qualified gaming entity application"means an application described in
subparagraph(B)of paragraph(1)of subdivision (b)of Section 19763.
(kk)"Qualified gaming entity operator license"means an online sports betting operator
license described in subparagraph(B)of paragraph(1)of subdivision(b) of Section 19763.
(11)"Tribal application"means an application described in subparagraph(A)of paragraph
(1)of subdivision(b)of Section 19763.
(mm)"Tribal operator license"means an online sports betting operator license described
in subparagraph(A)of paragraph(1)of subdivision(b)of Section 19763.
(ma)(1) "Sports event"or"sporting event"means all of the following:
(A)A professional sports event.
(B) An athletic event.
(C)A collegiate sports event.
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(D)An amateur sports event.
(E)An electronic sports event.
(F) A motor sports event.
(G) A competitive event or novelty event.
(2) "Sports event" or"sporting event"does not include horse races that are subject to
Article 9(commencing with Section 19590)of Chapter 4 of Division 8.
(mb)"Sports governing body"means an organization that is headquartered in the United
States and prescribes final rules and enforces codes of conduct with respect to a covered sports
event and participants therein.
(nn) "Sports league"means an organization that hosts or coordinates a recurring series of
sports events between teams or individuals that are members of,or affiliated with,the
organization.
(oo) "Supplier applicant"means a person that applies for an online sports betting supplier
license pursuant to Article 6.
(pp) "Total gross receipts"means the total dollar amount of all online sports bets, except
for sports bets made with free bets or promotional gaming credits,that the online sports betting
operator collects from bettors.
(qq)"U.S. state or territory"means the District of Columbia, any United States territory,
or any state represented in the United State Senate besides the State of California.
(rr)(1)"Bet"or"wager"means the staking or risking by a person of something of value
upon an agreement or understanding that the person or another person will receive something of
value in the event of a certain outcome. The terms do not include:
(A)Any activity governed by the securities laws of the United States or this state.
(B)Any contract of indemnity or guarantee.
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(C)Any contract for insurance.
(D)Participation in any game or contest in which the participants do not stake or risk
anything of value other than personal efforts of the participants in playing the game or contest or
obtaining access to the Internet,or points or credits that the sponsor of the game or contest
provides to participants free of charge and that can be used or redeemed only for participation in
games or contests offered by the sponsor.
(E)A fantasy sports contest in which winning outcomes reflect the relative knowledge
and skill of the players and are predominantly determined by the accumulated statistical
performance of athletes or individuals.
(2)References to a bet or wager being"made,""placed,"or"initiated,or any
combination or conjugation of those terms, are used interchangeably within this chapter.
(ss)(1)"Youth sports event"or"youth sporting event"means an athletic event or events
in which either of the following conditions exists:
(A)The majority of participants are under the age of 18 years.
(B)At least one participant is a team from a public or private elementary,middle,or
secondary school,regardless of where such school is located.
(2)Notwithstanding paragraph(1), if an athletic event is an Olympic event or meets the
definition of"collegiate sports event"or"professional sports event,"then the event shall not be
considered to be a youth sports event regardless of the age of the participants.
(3)Designation as a"youth sports event"shall be limited to the single game or match in
which either of the conditions set forth in subparagraph(A)or subparagraph(B) of paragraph(1)
exist,and shall not be construed to prohibit betting on other games in a tournament or multigame
event in which a youth sports team participates.
Section 5. Section 15.5 is added to Article XIII B of the California Constitution, to read:
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SEC. 15.5. "Appropriations subject to limitation" of each entity of government shall not
include appropriations of revenues from the California Online Sports Betting Trust Fund created
by the California Solutions to Homelessness and Mental Health Support Act, or any other
revenues deposited into any other fund or account pursuant to that Act. No adjustment in the
appropriations limit of any entity of government shall be required pursuant to Section 3 as a
result of revenues being deposited in or appropriated from the California Online Sports Betting
Trust Fund created by California Solutions to Homelessness and Mental Health Support Act or
any other fund or account pursuant to that Act.
Section 6. Section 23.5 is added to Article XVI of the California Constitution, to read:
SEC. 23.5. The taxes imposed by the California Solutions to Homelessness and Mental
Health Support Act and the revenue derived therefrom, including investment interest, shall not
be considered General Fund revenues for purposes of Section 8 and its implementing statutes,
and shall not be considered"General Fund revenues," "state revenues,"or"General Fund
proceeds of taxes" for purposes of subdivisions (a)and(b) of Section 8 and its implementing
statutes.
Section 7. Severability.
The provisions of this Act are severable. If any portion, section, subdivision, paragraph,
clause, sentence, phrase, word, or application of this Act is for any reason held to be invalid by a
decision of any court of competent jurisdiction, that decision shall not affect the validity of the
remaining portions of this Act. The People of the State of California hereby declare that they
would have adopted this Act and each and every portion, section, subdivision, paragraph, clause,
sentence,phrase, word, and application not declared invalid or unconstitutional without regard to
whether any part of this Act or application thereof would be subsequently declared invalid.
Section 8. Conflicting and Non-Conflicting Initiative Measures.
(a) Conflicting Initiative Measures. In the event that this initiative measure and another
initiative measure or measures authorizing sports betting to be offered over the Internet and on
mobile devices to persons aged 21 years or older physically present in this State but outside of
Indian lands shall appear on the same statewide election ballot,the other initiative measure or
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measures shall be deemed to be in conflict with this measure. In the event that this initiative
measure receives a greater number of affirmative votes, the provisions of this measure shall
prevail in their entirety, and the provisions of the other initiative measure or measures shall be
null and void.
(b)Non-conflicting Initiative Measures.
(1)Notwithstanding subdivision(a),this initiative measure shall not be deemed to be in
conflict with the California Sports Wagering Regulation and Unlawful Gambling Enforcement
Act, which was initially designated as Initiative No. 19-0029 Amendment#1 by the Attorney
General and# 1886 by the Secretary of State.
(2) The voters hereby declare that this Act and the initiative measure described in
paragraph(1) are complementary and supplementary to each other; and are not competing all-or-
nothing alternatives. The voters hereby freely and unequivocally express their intent that if this
Act and the initiative measure described in paragraph(1) are both approved at the same election,
that both this Act and the other initiative measure should both be given full force and effect.
(3) The voters hereby further declare:
(A) The California Sports Wagering Regulation and Unlawful Gambling Enforcement
Act and this Act are complementary and supplementary to each other.
(B)This Act and the California Sports Wagering Regulation and Unlawful Gambling
Enforcement Act are not competing all-or-nothing alternatives.
(C)It is the intent of the People that, should this Act and the California Sports Wagering
Regulation and Unlawful Gambling Enforcement Act both be approved by the voters at the same
election, both measures should be given full force and effect in order ensure that the benefits of
safe, legal online and in-person sports betting can both be realized for the State of California.
(c) If this initiative measure is approved by the voters but superseded in whole or in part
by any other conflicting initiative measure approved by the voters at the same election, and such
conflicting measure is later held invalid, this measure shall be self-executing and given full force
and effect.
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Section 9. Liberal Construction.
This Act shall be liberally construed to give effect to its intent and purposes, which are
expressed in Section 2 of this Act.
Section 10. Legal Defense.
The purpose of this section is to ensure that the people's precious right of initiative
cannot be improperly annulled by state politicians who refuse to defend the will of the voters.
Therefore, if this Act is approved by the voters of the State of California and thereafter subjected
to a legal challenge which attempts to limit the scope or application of this Act in any way,or
alleges this Act violates any state or federal law in whole or in part,and both the Governor and
Attorney General refuse to defend this Act to the fullest extent possible on behalf of the State of
California,then the following actions shall be taken:
(a)Notwithstanding anything to the contrary contained in Chapter 6 of Part 2 of Division
3 of Title 2 of the Government Code or any other law,the Attorney General shall appoint
independent counsel to faithfully and vigorously defend this Act to the fullest extent possible on
behalf of the State of California.
(b)Before appointing or thereafter substituting independent counsel,the Attorney
General shall exercise due diligence in determining the qualifications of independent counsel and
shall obtain written affirmation from independent counsel that independent counsel will
faithfully and vigorously defend this Act to the fullest extent possible. The written affirmation
shall be made publicly available upon request.
(c)In order to support the defense of this Act in instances where the Governor and
Attorney General fail to do so despite the will of the voters,a continuous appropriation is hereby
made from the General Fund to the Controller,without regard to fiscal years, in an amount
necessary to cover the costs of retaining independent counsel to faithfully and vigorously defend
this Act on behalf of the State of California to the fullest extent possible.
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