TO: Honorable City Council
FROM: City Manager
SUBJECT: INTRODUCTION AND FIRST READING OF AN ORDINANCE AMENDING COMMERCE MUNICIPAL CODE (“CMC”) TITLE 5, CHAPTER 5.48 RELATING TO CARD CLUB POINTHOLDERS MINIMUM INTEREST MEETING DATE: August 26, 2025
RECOMMENDATION:
That the City Council introduce and conduct a first reading of an ordinance by title only, and waive full reading, amending Title 5, Chapter 5.48 relating to card club pointholders minimum interest.
BACKGROUND:
The ownership and operation of Commerce Casino (“Casino”) are subject to regulations in accordance with the California State’s Bureau of Gambling Control and Business and Professions Code and the laws, rules, and regulations of each jurisdiction in which they operate. Chapter 5.48 (Card Clubs) of the CMC was adopted in 1982, establishing City regulations to ensure that gaming is conducted with integrity and professionalism. Since opening its doors in 1983, the Casino has remained in good standing and has continued to operate in accordance with these State and City provisions.
The City of Commerce recently received a request from the Casino regarding a text amendment to the CMC concerning the Casino's pointholder minimum interest requirement. The last amendment to the existing card club regulations was on December 13, 2022 through the adoption of Ordinance No. 804, which updated the language to clarify ambiguity, provide flexibility to card club operations, and eliminate regulations that should not be governed by the City.
ANALYSIS:
Over time, it is clear that certain provisions within Chapter 5.48 could be refined to better support the continued growth and success of the City's card club industry. One such area is the pointholder minimum interest requirement, where modifying the standard could facilitate future expansion and enhance the Casino's operational flexibility. Pursuant to CMC Section 5.48.010 (10) pointholder is defined as follows:
"Pointholder" means any person, having any interest whatsoever, in the ownership in a card club, whether legal, equitable, or of whatsoever kind or character.
This proposed amendment represents an opportunity for the City Council to revisit established rules and ensure the regulatory requirements align with the Casino and community's current and future needs.
The requested amendment would amend the pointholder minimum interest from one-quarter to one-eighth minimum interest to provide flexibility in the ownership of the Casino and delete CMC Section 5.48.292, which is a repetitive code section regarding pointholder minimum interest.
Below is the proposed amendment to the pointholder minimum interest requirement in CMC Section 5.48.290:
“5.48.290 Pointholders—Minimum interest.
A subdivision of any interest in a card club license to less than one-quarter one-eighth point is prohibited. Any such subdivision will not be recognized by the city and shall be grounds for disciplinary action pursuant to the provisions of this chapter. “ * The language in red signifies modified language; the language with a strike-through is deleted language and the language with an underline is added language.
ENVIRONMENTAL ASSESSMENT
The Community Development Department determined that the proposed text amendment is exempt from review under the California Environmental Quality Act (CEQA) according to Section 15061(b)(3). This is because the text amendment is not considered a project, and it can be determined with certainty that the amendment will not have a significant environmental impact since a text amendment is not a physical project and does not directly alter the environment. Therefore, it is not subject to CEQA review.
FISCAL IMPACT
This activity may be carried out without additional impact on the current operating budget.
RELATIONSHIP TO STRATEGIC GOALS:
This item relates to the 2016 Strategic Action Plan’s goal of: Economic growth - Guiding Principles 1 to “Create and strengthen our identity, as a community that promotes opportunity and success for business that meets the strategic focus for economic growth, will have a positive impact on the quality of life and the City’s financial sustainability.” Prepared by: Jessica Serrano, Director of Community Development Reviewed by: Alvaro Castellon, Director of Finance
Approved as to form by: Noel Tapia, City Attorney
Respectfully submitted: Ernie Hernandez, City Manager
ATTACHMENT:
Ordinance No. XXXX
CITY OF COMMERCE
AGENDA REPORT
Item No.