CITY OF COMMERCEAGENDA REPORTCITY OF COMMERCEAGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
Item No. Item No.
Item No.
Item No.
TO: Honorable City Council
FROM: City Manager
SUBJECT: CARD CLUBS - CONSIDERATION OF AN ORDINANCE FOR FIRST READING AMENDING SECTION 48.010 THROUGH 48.360, OF CHAPTER 5.48, OF TITLE 5 OF THE COMMERCE MUNICIPAL CODE, RELATING TO CARD CLUBS; and CONSIDERATION OF CITY COUNCIL APPROVAL OF A RESOLUTION CALLING FOR A SPECIAL ELECTION PLACING A BALLOT MEASURE ON THE MARCH 7, 2023 SPECIAL MUNICIPAL ELECTION FOR THE SUBMISSION TO THE QUALIFIED VOTERS OF THE CITY OF COMMERCE, ORDINANCE NO. ___ AMENDING CHAPTER 5.48, OF TITLE 5, OF THE COMMERCE MUNICIPAL CODE, REGARDING CARD CLUBS, SETTING DEADLINES FOR FILING WRITTEN ARGUMENTS FOR AND AGAINST THE INITIATIVE MEASURE, AND REBUTTALS THEREOF; DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS; AND RELATED MATTERS TO SAID MUNICIPAL ELECTION; Meeting Date: November 22, 2022
RECOMMENDATION:
City Council to consider and approve the following:
(1a) INTRODUCE for first reading, read by title only, and waive further reading, the attached Ordinance entitled “AN ORDINANCE OF THE CITY OF COMMERCE, CALIFORNIA, AMENDING SECTION 48.010 THROUGH 48.360, OF CHAPTER 5.48, “CARD CLUBS,” TITLE 5, “BUSINESS REGULATIONS AND LICENSING,” OF THE COMMERCE MUNICIPAL CODE OF THE COMMERCE MUNICIPAL CODE, RELATING TO CARD CLUBS” as further described in Table 1; and (1b) INTRODUCE for first reading, read by title only, and waive further reading, the attached Ordinance entitled “AN ORDINANCE OF THE CITY OF COMMERCE, CALIFORNIA, AMENDING CHAPTER 5.48, “CARD CLUBS,” TITLE 5, “BUSINESS REGULATIONS AND LICENSING,” OF THE COMMERCE MUNICIPAL CODE OF THE COMMERCE MUNICIPAL CODE, RELATING CARD CLUBS”; and (2) Adopt the attached resolution entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMMERCE, CALIFORNIA, CALLING AND GIVING NOTICE OF THE HOLDING OF A SPECIAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, MARCH 7, 2023, FOR THE SUBMISSION TO THE QUALIFIED VOTERS OF THE CITY OF COMMERCE AN ORDINANCE AMENDING CHAPTER 5.48, “CARD CLUBS,” TITLE 5, “BUSINESS REGULATIONS AND LICENSING,” OF THE COMMERCE MUNICIPAL CODE, SETTING DEADLINES FOR FILING WRITTEN ARGUMENTS FOR AND AGAINST THE REFERENDUM MEASURES, AND REBUTTALS THEREOF; DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS; AND RELATED MATTERS TO SAID SPECIAL MUNICIPAL ELECTION; and (3) A dopt the attached resolution entitled “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMMERCE, CALIFORNIA, REQUESTING THAT THE BOARD OF SUPERVISORS FOR THE COUNTY OF LOS ANGELES RENDER SPECIFIED SERVICES RELATING TO SAID ELECTION”; and (4) Authorizing the City Attorney’s Office to make any necessary revisions to the attached Resolutions and Ordinance to be consistent with City Council’s Motions and Directives, including the recommended amendments outlined herein and in the attached which do not require voter approval as explained herein; OR (5) Alternatively, City Council may provide staff with alternate or additional directives.
BACKGROUND:
The ownership and operation of casino entertainment facilities are subject to extensive regulation under the laws, rules and regulations of each of the jurisdictions in which they respectively operate. Chapter 5.48 (Card Clubs) of the Commerce Municipal Code was established in 1982 setting regulations designed to ensure that gaming is conducted honestly and competitively. Since its establishment in 1983, the Commerce Casino has operated in good standing in the City of Commerce under the provisions of the City’s Municipal Code, the State’s Bureau of Gambling Control and Business and Professions Code.
As is the case with most established regulations, certain elements have been identified within Chapter 5.48 that could be modified to ensure continued growth and success of the City’s card club establishment, primarily a modification that would result in an expansion of gambling operations. The present is an opportune time to consider these adjustments as the state moratorium on gaming expansion will sunset on December 31, 2022.
Recommendation 1a:
Pursuant to Section 19961 of the California Business and Professions Code, an ordinance may be amended without approval of the electors one time on or after the effective date of Chapter 5: The Gambling Control Act, to expand gambling by a change that results in an increase of less than 25 percent. The Commerce Casino has a current cap of 374 tables, as established by the voters. The main two elements being requested for City Council approval at this juncture are to amend the ordinance to allow the Commerce Casino their one-time opportunity to seek an increase of 25% in their approved number of tables from the Bureau of Gambling Control as provided by the State of California. This amendment would take place 30 days from the second reading of this ordinance amendment should it be approved for a first reading this evening. Should the proposed amendment take effect, it would increase the table limit to 467 tables and provide for the other modifications noted in Table 1. Further, the ordinance would amend the population limit for the table maximum to apply for every 25,000 people living in the City of Commerce instead of the current limit which is applicable for every 10,000 people. This provision related to the adjusted population would only be applicable if Recommendation 1b is approved by the City Council and successfully enacted by the voters of the City of Commerce.
Recommendation 1b:
Further, City staff is recommending the first reading of an ordinance to be submitted to the voters for approval on March 7, 2023 that would authorize the Commerce Casino to seek approval from the Bureau of Gambling Control for up to 2,500 tables.
The current City policy as established by the ordinance approved by the voters, allows for a maximum of 374 licensed tables or units to operate in any card establishment. One of the proposed amendments considered as part of this recommendation, would allow the number of licensed tables or units to be increased to 2,500. An amendment such as this would be valid only if submitted to the voters for approval as it would be defined as “expansion of gambling”, pursuant to Section 19961 of the California Business and Professions Code.
Furthermore, Section 19961 of the California Business and Professions Code provides in pertinent part …Any amendment to any ordinance that would result in an expansion of gambling in the city, county, or city and county, shall not be valid unless the amendment is submitted for approval to the voters of the city, county, or city and county, and is approved by a majority of the electors voting thereon.” Section 19961 further explains: For the purposes of this article, “expansion of gambling” means, when compared to that authorized on January 1, 1996, or under an ordinance adopted pursuant to subdivision (a) of Section 19960, whichever is the lesser number, a change that results in any of the following:
An increase of 25 percent or more in the number of gambling tables in the city, county, or city and county.
An increase of 25 percent or more in the number of licensed card rooms in the city, county, or city and county.
An increase of 25 percent or more in the number of gambling tables that may be operated in a gambling establishment in the city, county, or city and county.
The authorization of any additional form of gambling, other than card games, that may be legally played in this state, to be played at a gambling establishment in the city, county, or city and county.
An increase of 25 percent or more in the hours of operation of a gambling establishment in the city, county, or city and county.
As noted above, in addition to increasing the number of licensed tables, staff proposes other amendments for City Council consideration as identified in the following table, which can be adopted by the City Council without submission to the voters. The tables below provide a brief overview and explanation along with the reason each adjustment may be worthy of City Council consideration.
Table 1: Proposed Amendments to Chapter 5.48 (Card Clubs) (Recommendation 1a) Section and Existing Language
Proposed Language
Reason for Change
Throughout 5.48 – “City Administrator”
“City Manager”
Consistency within Municipal Code for changes made to title from City Administator to City Manager
5.48.185 (b) – Alternatives to table rental charges.
Current policy states that the alternative method shall apply only to games where the licensee supplies a dealer at the table.
Proposed language would include “and/or game” to not only impose this limit at the tables.
This would apply in the event that one game is played by players that occupy more than one table.
5.48.190 – Limitation on number of licenses.
The number of card game licenses shall not exceed a total of one such license for each full 10,000 persons residing in the city, as shown by the last available census.
Proposed language allows for one card game license for each full 25,000 persons residing in the city.
The City’s population has grown as has staff’s understanding of the industry and the capacity that the City has to host an endeavor of this type and magnitude in the City. The application of this provision is contingent on voter approval of the amendment noted in Recommendation 3b/Table 2 below.
5.48.220 (15) – Rules and regulations.
Rule No. 15 states that a licensee may use associated equipment to facilitate wagers on all tables. No more than one hundred persons may wager on a single table.
Proposed language would include “and/or game” to not only limit at the tables.
This would apply in the event that one game is played by players that occupy more than one table.
5.48.320 – Games not permitted.
Would add a qualifier to denote that this provision does not apply to a licensed card club.
In order to minimize any potential ambiguity related to application of this section against a licensed card club.
5.48.335 – Credit Limitations.
Current policy states that licensee may extend credit solely in the form of holding personal checks issued by licensee’s customers for a period of time not to exceed 15 calendar days.
Revised language would allow check holding for a period of time not to exceed 90 days, unless authorized by the City Manager.
Proposing to eliminate this section as it does not appear to be something that the City can or should govern and does not have the bandwidth to oversee.
5.48.350 (3) – Unlawful acts.
Current policy states that it is unlawful to permit more than ten persons to be seated or to play at any table at one time; except in the games where players banking is allowed.
Proposed language would include “or as permitted” to not limit seating at tables to 10 persons.
Consistency with Section 4.48.220 (15), allowing no more than 100 persons to wager on a single table and/or game.
5.48.350 (4) – Unlawful acts.
Current policy states that it is unlawful to derive revenues from games being played in the card room otherwise than from collection of a specified periodic fee from its patrons for the use of the card room facilities for incremental periods of time.
Proposed language would include “or as permitted” to not limit seating at tables to 10 persons.
This is an outdated definition of a table and there is capacity for players beyond this current limit which does not have a sound rationale for its limiting nature.
In accordance with Section 19961 of the California Business and Professions Code, the City Council is asked to consider and approve the amendments indicated in Table 2 below so that staff may initiate the Special Municipal Election for the specific amendment that must be submitted to the voters for approval. All other provisions in Chapter 5.48 not modified by the City Council at this juncture or by the voters at the aforementioned Special Municipal Election would remain in effect.
Table 2 - Proposed Amendments to Chapter 5.48 (Card Clubs) (Recommendation 1b)
5.48.060 (17) (18) – License – Application – Contents. Current policy allows no more than 374 licensed tables or units to operate in any card club establishment within the City.
Proposed language would allow the number of licensed tables or units to be increased to 2,500.
In order to maximize City revenues and provide for a more competitive cardroom in a growing industry now that the statewide moratorium on cardroom expansion has been rescinded.
ANALYSIS:
California Elections Code Section 9217 states in pertinent part, “No ordinance that is either proposed by initiative petition and adopted by the vote of the legislative body of the city without submission to the voters, or adopted by the voters, shall be repealed or amended except by a vote of the people, unless provision is otherwise made in the original ordinance.” FISCAL IMPACT:
The cost of the election has been determined by the Los Angeles County Registrar/Recorder Office to be approximately $330,000. This appropriation must be authorized by the City Council for the City Clerk’s budget.
RELATIONSHIP TO STRATEGIC GOALS:
This relates to 2016 Strategic Goal, “Community Quality of Life” and Guiding Principle 5 - “Continue to identify and develop City Codes that support a clean, well-maintained and sustainable community.” Prepared and Recommended by: Edgar P. Cisneros, City Manager Approved as to form by: Noel Tapia, City Attorney
Respectfully submitted by: Edgar P. Cisneros, City Manager Attachments:
Exhibit A – Ordinance Amending Section 5.48, Sections 48.010 through 48.350 of the Commerce Municipal Code (Recommendation 1a) Exhibit B – Ordinance Amending Section 5.48 of the Commerce Municipal Code (Recommendation 1b) Exhibit C - Resolution Calling for a Special Election for the Submission to the voters of the City of Commerce Ordinance No. ___Amending Commerce Municipal Code, Chapter 5.48 (Card Clubs) Exhibit D – Resolution of the City Council of the City of Commerce requesting that the Board of Supervisors of the County of Los Angeles Render Specified Services Relating to Said Election 2 2