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 second READING AMENDING SECTION 48.010 THROUGH 48.360, OF CHAPTER 5.48, OF TITLE 5 OF THE COMMERCE MUNICIPAL CODE, RELATING TO CARD CLUBS Meeting Date: December 13, 2022
RECOMMENDATION:
City Council to consider for adoption and Second Reading by waiving full reading and reading by title only, 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.
BACKGROUND AND ANALYSIS:
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 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 the cardroom expansion to 2,500 licensed tables or units is successfully enacted by the voters of the City of Commerce. Approval for said expansion will be on a March 7, 2023 special election ballot.
As noted above, in addition to increasing the number of licensed tables, staff proposes other amendments for City Council consideration as identified in Table 1 below, which can be adopted by the City Council without submission to the voters. Furthermore, on November 22, 2022, the City Council considered and approved for first reading an Ordinance amending Section 48.010 through 48.360, of Chapter 5.48, of Title 5 of the Commerce Municipal Code, to reflect the proposed amendments related to Card Clubs.
Table 1 below provides a brief overview and explanation along with the reason each adjustment may be worthy of City Council consideration. Please note that the highlighted amendment in the table below will only apply if the voters approve the card room expansion during the special election on March 7, 2023.
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 Administrator 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 on a March 7, 2023 special election.
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.
The City Council conducted a first reading of the Ordinance at the November 22, 2022 City Council meeting. Now City staff is asking the City Council to consider a second reading and adoption of the Ordinance.
FISCAL IMPACT:
There will be no fiscal impact on the City’s 2022/2023 budget as a result of this action.
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.” Recommended by: Edgar P. Cisneros, City Manager
Prepared by: Viviana Esparza, Senior Management Analyst 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) 2 4