The California Legislature and Gaming

The California Constitution, in Section 19 of Article IV, contains specified limitations and grants of power relating to gaming being conducted in the State of California. Article IV deals with the legislative branch of government and Section 19 touches upon everything from lotteries to casino-type gambling. What are the provisions of Section 19?

First, the Legislature has no power to authorize lotteries, and it is required to prohibit the sale of lottery tickets in the State. The Legislature has done so in Penal Code Section 326.

Second, the Legislature may provide for the regulation of horse races and horse race meetings and wagering on the results. The Legislature has done so in the Business and Professions Code, Division 8 (Special Business Regulations), Chapter 4 (Horse Racing) in Sections 19400 – 19668.

Third, the Legislature by statute may authorize cities and counties to provide for bingo games, but only for charitable purposes. The Legislature has done so in Penal Code Section 326.5.

Fourth, despite the first provision of Section 19, there is authorized the establishment of a California State Lottery. The Legislature has done so in the Government Code Title 2 (Government of the State of California), Division 1 (General), Chapter 12.5 (California State Lottery Act of 1984) in Sections 8880 – 8880.7.

Fifth, the Legislature has no power to authorize, and is required to prohibit, casinos of the type currently operating in Nevada and New Jersey. This is done in Government Code Section 98001(c).

Sixth, the Governor is authorized to negotiate and conclude compacts, subject to ratification by the Legislature, for the operation of slot machines and for the conduct of lottery games and banking and percentage card games by federally recognized Indian tribes on Indian lands in California in accordance with federal law. This is done in Government Code Title 16 (State-Tribal Agreements Governing Indian Gaming) in Sections 98000 – 98012.

As a result, slot machines, lottery games, and banking and percentage card games are permitted to be conducted and operated on tribal lands subject to those compacts negotiated by Indian tribes and the Governor.

Seventh, the Legislature may authorize private, nonprofit, eligible organizations, as defined by the Legislature, to conduct raffles as a funding mechanism to provide support for their own or another private, nonprofit, eligible organization’s beneficial and charitable works. The Legislature has done so in Penal Code Section 320.6.

There are additional constitutional provisions. For example, at least 90 percent of the gross receipts from the raffle must go directly to beneficial or charitable purposes in California. Any person who receives compensation in connection with the operation of a raffle must be an employee of the private nonprofit organization that is conducting the raffle.